Join the "Green Team"

As our cover story points out, supply chain managers are in the best position to lead corporate environmental and sustainability initiatives. Because they are used to working both inside and outside the walls of the company, they have both the operational knowledge and the cross-functional relationships to make any such program succeed.

So far, though, few companies have seen a need to launch broad corporate sustainability programs; most have been limited in both scope and action. A recent survey by the consulting firm Accenture (summarized in our Forward Thinking section) found that three-quarters of the surveyed companies were engaged in such basic activities as recycling and installing energy-efficient lighting.

It seems likely that all companies will soon be required to carbon-map their supply chains to find ways to reduce greenhouse-gas emissions.

But companies will soon have to move beyond those basics and restructure their supply chains—and that means supply chain professionals should prepare to join the "Green Team." Legislation and regulations in the offing, particularly in the United States, will force companies to remove greenhouse gases from their manufacturing and distribution operations. For instance, the U.S. Environmental Protection Agency has indicated that it intends to put forward rules for limiting carbon dioxide emissions. In addition, the U.S. Congress, prodded by the Obama administration, will soon take up debate on a cap-and-trade program as a way to limit greenhouse gases. Such a system sets an overall limit on emissions but lets companies buy and sell their own allowances. Cap-and-trade programs are nothing new in Europe. The European in place since 2005, because the Union has had this type of program Kyoto Protocol treaty required most developed nations to adopt a cap-and-trade system to limit greenhouse gases. (The United States did not sign that treaty.)

In addition to current initiatives, environmentalists are likely to step up their efforts worldwide to reduce carbon dioxide following recent reports in the journal Nature. The authors of two scientific studies published in the April 30, 2009, issue contend that about three-quarters of the world's fossil fuels must be left unused if we are to avoid dangerous climate changes. An increase in Earth's average temperature could melt Greenland's ice sheets, raising sea levels and worsening droughts, the scientists predict. The results of these studies will place more pressure on the United Nations climate talks when negotiators meet in Copenhagen this December to devise additional regulations.

Although I'm personally skeptical of these dire forecasts, I'm certain that lawmakers worldwide will be pressured to impose regulations that restrict carbon. That's why it seems likely that all companies will be required to carbon-map their supply chains to find ways to reduce greenhouse-gas emissions. When that happens, supply chain professionals should be ready and willing to lead the charge.