* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
As societies we are ‘carbon blind’ to our supply chains, despite them accounting for more than 80% of annual greenhouse gas emissions
Dr. Cyrus Hadavi is CEO of digital supply chain planning company Adexa.
Consumers want to be greener- but they are often lacking the key information to act.
For example, many people are cutting down on meat for climate reasons.
As a result, they might reject a locally reared burger in favour of a salad that is grown in India, transported to China to be packaged in plastic that is produced in Taiwan, and then freighted to the US. The result: a salad with a far higher footprint than the meat option.
As societies we are ‘carbon blind’ to our supply chains, despite them accounting for more than 80% of annual greenhouse gas emissions. It means that well-intentioned lifestyle choices are no more than a shot in the dark.
Take dieting as a parallel: If someone wants to lose weight, they need to ensure that they burn more energy than they consume. They do this by counting calories on food and drink packets.
The exact same principle applies to carbon emissions. If products were efficiently labelled with their carbon footprint, then individuals who want to cut down their carbon emissions could adequately do so.
Every product should come with a carbon score, based on its supply chain. That way, carbon counting can be as scientific and simple as calorie counting.
Our supply chains support a total of approximately $20 trillion in trade annually. It should come as no surprise that they must form a key part of our green strategies. That includes not only the production stage but the delivery stage.
Businesses have a clear incentive to tackle climate issues impacting on their products, with management consulting firm McKinsey estimating that Unilever alone loses about €300 million per year as a result of climate change related issues such as water scarcity and declining agricultural productivity.
Whilst the first industrial revolution introduced the technologies that have added to climate change, it is the fourth industrial revolution that can help us to fight against it.
Technologies like machine learning, Big Data and the Internet of Things – which works internet-enabled sensors to objects so that they can collect data and communicate – will be key in improving transparency over the true carbon costs of products.
They can ensure that this information is available, making the carbon emissions of every step of our supply chains transparent, so that both businesses and consumers can make greener, more sustainable decisions.
General Electric’s Digital Power Plant, for example, can dramatically reduce the carbon emissions of power plants purely through measurement.
By equipping a plant with 10,000 sensor inputs in a factory, General Electric claims it would help to remove 0.58 gigatonnes of greenhouse gas emissions per year, which equates to replacing 20 billion incandescent light bulbs with LED equivalents.
If these same data collection methods were used to record our carbon emissions across entire supply chains, from loading houses, to freight containers, to manufacturers, we could replicate the same success on a grand scale.
That data is also key to offering transparency and ensuring that consumers’ efforts to support a shift to a greener economy are not self-defeating.
After all, as the influential management consultant Peter Drucker said, “If you can’t measure it, you can’t improve”. That applies to our supply chains as much as our restaurant menus.