Achieving a Carbon-Neutral Supply Chain: The Path Forward
A recent study by McKinsey reveals that a significant portion of a company’s carbon footprint, ranging from 40% to 80%, lies within its supply chain. To address this, companies are increasingly focusing on creating a carbon-neutral supply chain, which involves reducing emissions associated with their activities and offsetting any remaining emissions to achieve net carbon neutrality.
However, transforming the supply chain into a carbon-neutral entity poses challenges. Supply chains have traditionally been opaque, with limited visibility into suppliers’ emissions data. Most suppliers do not track or report carbon emissions, and buyers lack control over their suppliers’ emissions or access to relevant data.
To illustrate the impact of supply chains, Volkswagen’s commitment to achieving zero emissions by 2050 could influence around 40,000 direct suppliers. Volkswagen plans to make sustainability a key criterion for supplier selection, on par with quality and price considerations.
