Overcoming Barriers to Supply Chain Decarbonisation: Tips and Best Practices

As the world confronts the urgent threat of climate change, businesses are under increasing pressure to reduce their greenhouse gas emissions and build more sustainable, circular supply chains. And for good reason: according to CDP, supply chain emissions are on average 11.4 times higher than operational emissions, accounting for the vast majority of most companies' environmental footprint.

But while setting ambitious net-zero targets and commitments is an important first step, actually achieving those goals is another matter entirely. The reality is that decarbonizing a complex, global supply chain is a daunting challenge that requires significant time, resources, and collaboration to overcome.

As a sustainability professional who has worked with dozens of companies on their supply chain decarbonisation journeys, I've seen firsthand the barriers and obstacles that can stand in the way of progress. But I've also seen that with the right strategies, tools, and mindset, it is possible to overcome those barriers and drive meaningful, lasting change.

So what are some of the most common barriers to supply chain decarbonisation - and how can companies overcome them? Here are a few key challenges and tips for success:

Barrier 1: Lack of data and visibility

One of the biggest obstacles to supply chain decarbonisation is simply a lack of data and visibility into the environmental impacts of suppliers and products. Many companies struggle to collect, track, and analyze the vast amounts of data needed to measure and manage their Scope 3 emissions, let alone engage suppliers in emissions reduction efforts.

Tips for overcoming this barrier:

Invest in supply chain mapping and transparency tools to gain better visibility into your end-to-end supply chain and identify high-emission hotspots
Engage suppliers in data collection and reporting through sustainability surveys, audits, and collaborative platforms
Leverage emerging technologies like blockchain, IoT, and AI to automate data collection and analysis and gain real-time insights into supply chain performance
Partner with third-party data providers and industry initiatives to access shared data resources and best practices

Barrier 2: Limited resources and capacity

Another common challenge is simply a lack of resources and capacity to prioritize and implement supply chain sustainability initiatives. Many companies, especially smaller ones, may struggle to allocate the time, budget, and personnel needed to engage suppliers, develop new processes and technologies, and drive continuous improvement.

Tips for overcoming this barrier:

Make the business case for supply chain decarbonisation by quantifying the financial, operational, and reputational benefits of sustainability investments
Prioritize high-impact, low-effort initiatives that can deliver quick wins and build momentum for change
Leverage external resources and partnerships, such as sustainability consultants, industry associations, and NGOs, to access expertise and support
Embed sustainability into core business processes and decision-making, rather than treating it as a separate, siloed function

Barrier 3: Misaligned incentives and short-term thinking

A third barrier to supply chain decarbonisation is misaligned incentives and short-term thinking. In many cases, the costs and benefits of sustainability investments may not be evenly distributed across the supply chain, leading to resistance or lack of buy-in from certain stakeholders. Additionally, the pressure to deliver short-term financial results can make it difficult to justify longer-term sustainability investments.

Tips for overcoming this barrier:

Align sustainability goals and metrics with overall business strategy and performance indicators to create a shared vision and accountability for success
Engage suppliers and other stakeholders in collaborative goal-setting and problem-solving to identify mutually beneficial solutions and incentives
Communicate the long-term value and competitive advantages of supply chain sustainability, such as increased resilience, innovation, and customer loyalty
Advocate for policy and market reforms that create a level playing field and reward sustainable business practices, such as carbon pricing, procurement standards, and ESG disclosure requirements

Barrier 4: Complexity and uncertainty

Finally, the sheer complexity and uncertainty of global supply chains can make it difficult to navigate the path to decarbonisation. With multiple tiers of suppliers, complex product lifecycles, and constantly evolving technologies and regulations, it can be challenging to identify the most effective interventions and prioritize limited resources.

Tips for overcoming this barrier:

Adopt a risk-based approach to supply chain sustainability, focusing on the highest-impact and highest-risk areas first
Embrace a continuous improvement mindset, starting with pilot projects and scaling up successful initiatives over time
Foster a culture of innovation and experimentation, encouraging suppliers and employees to propose and test new ideas and solutions
Collaborate with industry peers, academia, and other stakeholders to share knowledge, pool resources, and advocate for systemic change
Of course, these are just a few examples of the many barriers and strategies for overcoming them in the journey to supply chain decarbonisation. Every company's challenges and opportunities will be unique, depending on factors like industry, geography, size, and maturity.

But regardless of where you are in your sustainability journey, one thing is clear: the time for incremental change is over. With the clock ticking on the climate crisis and the stakes higher than ever, businesses need to take bold, decisive action to transform their supply chains for a net-zero future.

And while the barriers to change may seem daunting, the good news is that there is a growing ecosystem of tools, resources, and best practices available to help companies accelerate their progress. From carbon accounting and supplier engagement platforms to green logistics and circular economy solutions, the technology and know-how exists to drive real, measurable impact.

But ultimately, the key to success in supply chain decarbonisation is not just about tools and tactics - it's about leadership, collaboration, and a willingness to challenge the status quo. It's about setting bold, science-based targets and holding ourselves and our partners accountable for delivering on them. It's about engaging our employees, customers, and communities in the journey, and inspiring them with a vision of a more sustainable, resilient, and prosperous world.

As a sustainability leader, you have a critical role to play in driving this transformation. By embracing the challenges and opportunities of supply chain decarbonisation, and leading with courage, compassion, and conviction, you can help create a future where business is a force for good - for people, planet, and profit.

So let's roll up our sleeves and get to work. The road ahead may be long and winding, but the destination is worth it. Together, we can build the net-zero supply chains of tomorrow - and create a brighter, more sustainable future for all.

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Newtral AI Platform- Enterprise ESG Platform for Corporates and Supply Chain 

We help organizations automate their ESG metric measurements, tracking and reporting across company as well as their supply chain. Our platform solves for all corporate sustainability reporting and carbon accounting needs.

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