Executives concerned about climate change will have to look to purchasing and supply chain management, Chris Brickman and Drew Ungerman of McKinsey & Co. advise. Their analysis shows for consumer goods makers, high-tech players and other manufacturers, between 40 and 60 per cent of a company's carbon footprint resides upstream in its supply chain - from raw materials, transport, and packaging to the energy consumed in manufacturing processes. For retailers, the figure can be 80 per cent.
So any significant carbon-abatement activities will require collaboration with supply chain partners, transferring best practices to key suppliers. "Surprisingly perhaps, we find that many of the opportunities to reduce emissions carry no net lifecycle costs - the upfront investment more than pays for itself through lower energy or material usage," they note in The McKinsey Quarterly.Report Typo/Error