Low-Carbon Supply Chain

A low-carbon supply chain is one that strategically manages and reduces the greenhouse gas (GHG) emissions generated at every stage—from raw materials to customer delivery and recycling—with the aim of minimising the total climate impact of the product or service.

Key Components

• Data transparency: detailed and shared Scope 3 inventories.
• Supplier decarbonisation: training programmes, SBTi-aligned targets and audits.
• Sustainable logistics: route optimisation, alternative fuels and multimodal transport.
• Circular design: fewer virgin materials and higher recyclability.
• Green finance: sustainability-linked bonds and contracts with emission-based pricing.

Implementation Strategies

• Supplier Engagement: integrating carbon criteria into RFPs and contracts.
• Digital tools: blockchain traceability, IoT and big data platforms.
• Renewable energy procurement: virtual PPAs for factories and logistics hubs.
• Nearshoring models: reducing distances and geopolitical risks.

Standards and Frameworks

• ISO 14064-1 and the GHG Protocol Scope 3 Standard.
• CDP Supply Chain: leading disclosure platform.
• ISO 20400: sustainable procurement.

Benefits

• Regulatory resilience (CBAM, carbon taxes).
• Cost reduction through energy and material efficiency.
• Reputation and market access: B2B buyers increasingly require low-carbon footprints.

Challenges

• Complex and fragmented global supplier networks.
• Lack of technical capacity among SMEs.
• Upfront investment needed to modify processes and equipment.

Transforming the supply chain into a low-carbon model is essential for achieving net-zero targets, mitigating risks and remaining competitive in a rapidly evolving climate landscape.