EDF: Green Supply Chains a Priority for Major Companies

Big brand-name companies may not agree on very much when it comes to how to run their businesses, but it appears they do agree on the importance of “green” supply chain freight operations.

Greening the supply chain is a common thread and a “key priority” for companies, including Kellogg’s, Walmart, Anheuser-Busch, Apple, Adidas, General Mills, H&M, Lowes, CVS and Hershey, Jason Mathers wrote this month on the Environmental Defense Fund business blog.

“While each company has its own unique sustainability challenges and priorities, every one of them has a global supply chain that requires an extensive logistics network to move goods from manufacturing facilities to end customers,” he wrote.

After reading through the corporate responsibility reports of those major brands — thanks for doing that Jason! — he outlined three trends that stand out when it comes to green freight operations:

- Tracking logistics emissions is a standard practice. Seven out of the 10 recently released reports included data on fuel use or greenhouse gas emissions associated with freight transportation. “Several companies were tracking only emissions from outbound freight transportation, presumably because of a lack of visibility into inbound moves,” he wrote. Adidas, one of the three that did not include information on emissions or fuel use from freight movement, has included a breakdown of moves by transport modes and emissions from distribution centers and other facilities.

- Setting performance goals is a well-accepted practice. Four of the 10 companies have “performance-based goals” to improve the environmental impacts associated with freight transportation. For example:

• Walmart is seeking to double its fleet efficiency compared to 2005, and is nearly 90 percent there to meeting this goal.


• General Mills has a goal to reduce fuel use for its outbound moves by 35 percent compared to its 2005 consumption. The company has made considerable progress, reducing fuel use by 22 percent compared to 2005.


• Anheuser-Busch set a goal in 2014 to reduce greenhouse gases from its global logistics operations by 15 percent per hectoliter sold. Its goal also has a broad scope, including inbound and outbound transportation as well as warehousing.

- Seeking to shape external factors is a leadership practice. Mathers noted that much of the impact of moving freight is beyond the operational control of the 10 companies. “They have limited influence on the availability of low-impact fuels, the efficiency of freight equipment or the capacity of intermodal systems. In addition to focusing on the factors freight shippers can control, leading companies are trying to shape the overall system to provide more low-impact choices.”

Walmart has embraced this dynamic, he continued, by identifying “several key success factors for driving greater efficiency across the industry.” At the top of the list were policy outcomes, including next-generation fuel efficiency and greenhouse gas standards for freight trucks. Walmart noted in its latest sustainability report that policies like the “phase 2 GHG rule can present key opportunities to improve efficiency across the industry in a coordinated, responsible and safe way.”

EDF has urged the Environmental Protection Agency and the Department of Transportation to set new fuel efficiency and greenhouse gas standards for heavy trucks that will cut fuel consumption by 40 percent in 2025 compared to 2010.

The EDF says there are many ways to reduce freight-related greenhouse gas (GHG) emissions. But what strategies make the most sense? EDF’s comprehensive 67-page Green Freight Handbook helps companies answer that question, because it’s based on the “initiatives that will achieve the greatest environmental benefit in the least amount of time.” Another answer is the Green Freight Diagnostic Tool, which focuses on “five key principles” for greener freight:

1. Get the most out of every move


2. Choose the most carbon-efficient mode


3. Collaborate


4. Redesign your logistics network


5. Demand cleaner equipment and practices

While it may seem that greening long, complex supply chains is a daunting and nearly impossible task, the EDF’s work on freight provides useful, common-sense tools and steps that help guide companies serious about green supply chains.

Image extracted from the EDF’s Green Freight Handbook