Building Supply Chain Resilience With Carbon Offsets

Building Supply Chain Resilience With Carbon Offsets

Most organizations must demonstrate the value of any environmental programs they undertake, beyond simple compliance or target-hitting, in order to secure continued investment.

How can progressive carbon offsetting demonstrate added value by improving supply chain resilience?

What Is Supply Chain Resilience?

A resilient supply chain is one that can quickly respond to and recover from adverse effects.

Both large and small organizations today rely on complex, global supply chains. When events cause the supply chain to fail, the flow of vital products, components or information can be disrupted, jeopardizing the business’s ability to perform effectively and efficiently.

The causes include both natural and man-made events such as extreme weather, equipment failures, fires, labor disputes, resource shortages, political instability, and terrorist attacks. Therefore, there is no sure way to eliminate all risks.

Identifying and managing the challenges and opportunities presented by external events and internal errors can help improve resilience. It will also limit the cost and revenue impacts of supply chain disruptions. 

Why Do Businesses Need To Build Supply Chain Resilience?  

Not only can supply chain disruptions affect operations, they often result in financial damage beyond the immediate operational impacts.

Delivery delays, poor product or service quality, stock shortages and an inability to fulfil orders can reduce customer confidence and affect brand loyalty over many months or years.

But supply chain resilience is not only about preventing financial loss. It’s also about gaining competitive advantage by implementing a supply chain resilience strategy.

According to analysis by the World Economic Forum and PwC, companies that focus on supply chain resilience react to adverse events faster than the competition, take market share and outperform, resulting in an average 7% higher stock performance.

How Can Progressive Carbon Offsetting Create Business Impact, Especially Supplier Resilience?

Business consultants advocate “the use of exercises to stress-test assumptions and plans, and the development of business continuity or trade resumption plans, protocols and lines of authority to address major concerns”. 

While these may be valid strategies, for businesses that make environmental programmes and practice an essential part of their identity, there are other approaches to increasing supplier resilience.

Global ice cream brand Ben & Jerry’s relies on a group of key suppliers, including small individual farms, for its milk supply. Such suppliers are so vital that their failure could have a catastrophic effect on Ben & Jerry’s operations. By knowing each trading partner intimately, the company can better understand them to detect potential problems—and help to address them.

Ben & Jerry’s worked with NativeEnergy to design a carbon offset project–the Green Dream Farm Methane Reduction Project–to help small farms in Vermont improve on-farm sustainability. The resulting project removes the equivalent of almost 13,000 tonnes of carbon dioxide from farm emissions. Moreover, it provides additional social and community benefits, and improves economic stability for small farms.

By investing in progressive carbon offsets, Ben & Jerry’s can meet its emissions reduction goals while also increasing its own supply chain resilience.

The small dairy suppliers are more competitive and financially sustainable, ensuring the continued supply of milk to Ben & Jerry’s and reinforcing the company’s reputation as a global sustainability leader.

Building Resilient Suppliers And Communities

Contact NativeEnergy to find out how you can help your supply chain become more resilient by investing in Help Build™ carbon offset projects.