Supply chain decarbonization consists of identifying and reducing greenhouse gas emissions at all stages of the operation, from suppliers and transportation to warehousing and distribution. For many companies, this process is a challenge, as a large part of emissions come from activities carried out by third parties. Therefore, reducing the carbon footprint requires an integrated view of the value chain. In addition to contributing to environmental goals, decarbonization generates operational efficiency, cost reduction, and greater resilience. In this article, you will see where emissions are, how to reduce them, and how to structure a strategy in practice. Where are the supply chain emissions? Emissions are distributed across different stages of the chain: Therefore, the first step to reducing these emissions is to understand where the main points of impact are. How to reduce emissions in transport? Transport is one of the most relevant elements in supply chain carbon management. In addition, logistics carbon intensity makes it possible to assess emissions from the movement of cargo and compare transport alternatives. Among the possible strategies, four fronts stand out. Reduce distances traveled The proper location of the distribution centers brings the operation closer to the main consumption centers. As a result, the company reduces the kilometers traveled. Evaluate modal shift Depending on the operation and the available infrastructure, integrating different modes can reduce the impact of long-distance transport. Increase vehicle occupancy Proper consolidation of loads avoids trips with partially empty vehicles. Consequently, the operation gains efficiency. Reduce unloaded return paths Route planning helps reduce empty backhauls. In this way, the company avoids fuel consumption and emissions without generating value. What is the role of suppliers in decarbonizing the supply chain? A decarbonization strategy should not be limited to operations directly controlled by the company. Tracking the supplier base increases visibility into the chain's emissions. In addition, it allows you to identify partners who already have inventories and reduction targets. Similarly, companies can incorporate sustainability criteria into supplier selection and management. They can also support partners in developing their own emissions inventories. How do real estate assets contribute to reducing emissions? Real estate strategy also influences the environmental performance of the supply chain. The location of distribution centers, for example, affects transportation distances, the use of different modes, and distribution efficiency. In addition to the location, the characteristics of the property influence energy consumption and operational efficiency. Therefore, the evaluation of assets must consider infrastructure, equipment, orientation, weather conditions, and energy efficiency solutions. Certifications such as LEED, EDGE, and Fitwel also contribute to the efficiency of buildings. How to structure a decarbonization strategy? An efficient strategy can be built in four steps. 1. Measure: Establish carbon metrics and identify key emission points. 2. Prioritize: Focus efforts on the operations, suppliers, and activities with the highest impact. 3. Transform: evaluate alternatives for transportation, location, infrastructure, and processes capable of reducing emissions. 4. Track: monitor the indicators and use the results to adjust the strategy. Decarbonization and efficiency go hand in hand Reducing emissions is often directly linked to operational efficiency. A better-sized logistics network reduces distances, optimizes vehicle occupancy, and improves delivery times. Likewise, more efficient assets reduce energy consumption and operating costs. In short, supply chain decarbonization is more than an environmental agenda: it's part of the business strategy. Cushman & Wakefield integrates real estate strategy, sustainability and supply chain. It supports companies in asset valuation, location, efficiency and emission reduction opportunities. Talk to our experts and learn about our solutions for a more efficient and sustainable supply chain.
