Op-Ed: Here’s how companies can strong-arm their suppliers into cutting carbon emissions
A good business practice is a key to reducing emissions.
But, as many would agree, there is a trade-off between the goals of a business and the goal of cutting emissions. You just can’t have your cake and eat it too.
This becomes a bit of a dilemma, however, when firms’ own carbon emissions are a problem, and other firms’ emissions are low. If a company’s emissions are less than its supply chain’s emissions, then it often can’t influence the companies in the supply chain that have high emissions. Instead, it can only influence those companies whose emissions are less than those of the supplier.
Consequently, the solution is to find and work with the companies with the lowest emissions.
In the words of Professor Colin Crouch, it’s a two–way street:
“It is the supply chain [which] drives the company’s emissions – and the company needs to take its emissions seriously and ensure it can impact the supply chain with its own actions.”
As Professor Crouch notes, “The company may have to accept lower emissions or be compensated for those emissions. It may have to compensate for suppliers’ emissions and, when it does, you should ask for it directly and if you agree, provide a financial benefit or an incentive for companies to reduce their emissions, thereby incentivising their suppliers.”
In essence, the goal is to make sure the company is as green as possible while it grows its business.
The good news is that it is possible: the key is to find companies whose emissions are far lower than its own, which is not easy.
The problem is that in many cases, a company’s suppliers are only a few decibels higher or
