Four actions SMEs can take right now to decarbonize their supply chains
Created on Dec 06, 2022
Updated on Dec 06, 2022

Recent climate-related events have left the logistics industry at a major inflection point. Most nations are not on track to meet the 1.5°C increase limit outlined in the Paris Agreement, and the logistics industry – which accounts for roughly 21% of global emissions – is far behind on helping to achieve this goal.

Thankfully, we are seeing examples of meaningful progress, such as the Green Shipping Challenge for COP27 announced at this year’s conference in Egypt. Led by the United States and Norway, the challenge calls on governments, ports, and businesses worldwide to develop new commitments to environmentally friendly shipping. The challenge has led to over 40 proposals in areas such as carrier innovation, low- or zero-emission fuels, and policies to promote the increase of next-generation vessels.

These actions will certainly lead to change on the macro scale, but might also leave small-to-medium sized businesses (SMEs) wondering how the changes will impact them on a smaller scale. This article will seek to address the areas in which SMEs have the agency to make meaningful changes without putting their business operations at risk.

The challenges facing SMES to lower carbon emissions

In terms of decarbonization among SMEs, the issue is not linked to reluctant attitudes but mainly a lack of resources. A new survey from the SME Climate Hub shows that while most businesses want to work towards reducing their emissions, the top reasons for delaying climate action are a lack of skills and knowledge (63%), funding (48%) and time (40%). And despite the fact that 70% of those SMEs need external funding to take the above actions, only one in three have been offered a financial incentive to do so.

However, by availing themselves of information provided by relevant organizations and reaching out for help, there are a wide number of ways in which SMEs can put themselves on the path to a zero emissions future.

What SMEs can do right now to decarbonize their supply chains

1) Define your carbon baseline By taking the time to understand what they can accomplish within their resources, SMEs can build a plan to put them on the path to sustainability. A big part of this process is understanding their emissions baseline in the context of other businesses in the same region and sector. This can be accomplished by using free tools like the Industry CO2 Insights tool developed by Normative.

If you make physical products, it’s also important to assess those products’ entire lifecycles from production to end-of-life practices like recycling to see where you have the opportunity to reduce carbon output.

2) Use a carbon calculator to manage resources more efficiently A carbon calculator is another free tool that SMEs can use to begin tracking and reducing emissions. Normative also offers a free carbon calculator, and Amazon recently launched a similar free solution.

You can also reduce energy consumption by optimizing legacy processes such as the way you pay your vendors. You can reach out to the BlueX sales team for more information on updating your payment models to be more efficient.

3) Collaborate on zero carbon with supply chain partners As emphasized above, SMEs can’t effectively decarbonize their business by relying wholly on in-house resources and knowhow. SMEs should reach out to companies throughout their own supply chain to see how they could collaborate on and even incentivize decarbonizing. It’s possible that larger companies higher up within your supply chain may be willing to provide support if it helps them to meet more urgent climate commitments.

SMEs should also consider flagging their need for green services to carriers, who then have a better case for making investments to upgrade their fleets.

4) Provide sustainability training to your employees No decarbonization program can be effective without buy-in from your entire team. Once you’ve gathered the above data and resources and are ready to begin implementing, onboarding your staff to the new policies and processes will be your top priority.

The benefits of decarbonization for SMEs

While decarbonization is not an easy process, it can yield significant benefits for SMEs in both the long and the short term:

  • Increased access to capital: Reducing your vulnerabilities to climate-related risk can make your business more attractive to both investors and lenders.
  • Grow your brand: Your commitment to lowering emissions adds new value to your brand and gives you access to more ESG-minded customers.
  • Build a more resilient business: With low carbon or zero carbon processes in place, you are far more prepared to cope with future climate disruptions.

Reach out to the BlueX team about different ways to optimize your supply chain and take another step forward on the path to being a lower carbon business.