Reaching the Supply Chain Sustainability Tipping Point


Since the 1990’s I’ve been writing about sustainability, cap & trade and carbon footprints mainly in the realm of logistics and supply chain as that’s where I live.

Supply chains are incredibly important in this context as roughly 75% of most company’s carbon footprint emanates from their supply chain.

My mantra throughout this time has been ‘when not if’ these measures will be enacted and today I have to say we’re rapidly approaching the tipping point for supply chain sustainability.

Tipping Points for the Malcolm Gladwell uninitiated are defined as….

The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire. Just as a single sick person can start an epidemic of the flu, so too can a small but precisely targeted push cause a fashion trend, the popularity of a new product, or a drop in the crime rate.

Let’s talk about some of the signs of this impending shift to more sustainable commerce that are now becoming evident in Canada.

Canadian consumers continue to become more interested and active in demanding the companies they do business with make an effort not to harm the earth and environment. Social media and networks of all types are giving them the ability to be heard on many issues and decades of apathy may soon be overcome.

Recent survey in 2014 indicated that overall 86% of Canadians are buying green and Canadians are willing to pay more for green products. The ‘green’ profile of products and services is scrutinized now more than ever by Canadians, 43 per cent of whom indicated they are more willing to pay more for products and services that are ethically and responsibly manufactured or delivered

And as people go so do politicians follow and have spoken before about the Western Climate Initiative, which includes BC, Quebec , Manitoba and Ontario. And as of January 1, 2013 cap & trade under this program became law in the Province of Quebec.

British Columbia introduced a Carbon Tax which was implemented on July 1, 2008, B.C.’s tax covers most types of fuel use and carbon emissions. According to Stewart Elgie, Professor at the University of Ottawa in a 2014 article.

It started out low (C$10 per tonne of carbon dioxide), then rose by C$5 each year, reaching C$30 per tonne at present (about 7 cents per litre of gas). “Revenue neutral” by law, the policy requires equivalent cuts to other taxes. In practice, the province has cut $760 million more in income and other taxes than needed to offset carbon tax revenue.

Perhaps most significantly on April 13th the Province of Ontario announced it’s intention to introduce Cap & Trade in Ontario likely by the end of 2015 working in conjunction with the Quebec cap & trade program.

So if you just consider just the individual provincial initiatives and ongoing lack of action on this file at the Federal level one might think, so what’s the big deal here?

Well from a business perspective, when you put these four provinces together they represent 76 percent of Canada’s GDP so it seems clear the major markets we operate in are now primed for significant change.

As I write this on Earth Day 2015 I’m pleased to say that here in Canada, from a bottom up provincial perspective, we’re closer than ever before to the tipping point of making sustainable change as described above, but unfortunately still face inertia at the Federal level.

Most concerning though, at the same time we’re also sitting on the brink of another tipping point for making the needed changes to stop the soon irreversible and accelerating cycle of climate change. Soon the climate change drivers that mankind has been setting in motion over the last hundred years of growth and inactivity on carbon will result in an interconnected and irreversible process that we will be unable to stop.

See the below image from the University of East Anglia highlighting the connected elements in this case of Biome Loss due to Deforestation and Reef impacts, Polar, Permafrost and Glacial Melting, and ongoing Circulation Change in ocean currents.

Companies have the power to make changes in their business and can specifically target their supply chains which produce 75% of their Carbon Footprints. Many of these changes are actually expense and cost positive whether driven from Logistics Network Strategies incorporating carbon as a variable in the analysis or simply through implementing innovative pallet programs to generate carbon credits for the billions of pallet moves made in the supply chains of the world every year.

Companies also purchase trillions annually in services and can wield the power to create change with just today McDonalds announcing a pledge to eliminate deforestation from its entire global supply chain.

As our supply chains are very complex systems that many lay business persons don’t understand, it’s the role of responsible supply chain professionals to explain, demonstrate and educate their C-Level teams on these opportunities and get the support needed to make sustainable change in their supply chains.

We sit today on the verge of two potential sustainability tipping points and the actions of all of us will ultimately determine which one we choose.

Jeff Ashcroft

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