Green, clean and lean: turning sustainability into competitive advantage

 

Resource-efficient supply chains deliver both business and environmental benefits, explains Darran Messem, Managing Director of Certification at The Carbon Trust, an independent not-for-profit organisation working to accelerate the move to a sustainable, low carbon economy.

Darran Messem is Managing Director, Carbon Trust Certification and Director, International at The Carbon Trust, an independent organisation that works internationally with businesses, governments and the public sector to accelerate green growth through environmental accounting, energy and resource efficiency, and technology innovation.

Darren MassemGreen Credentials Infographic

“Businesses can make immense gains by tackling energy efficiency and resource efficiency in their supply chains,” says Darran Messem. “We’re not focusing on reducing greenhouse gas emissions solely for the environment. We’re focusing on the clear win between environmental management and cost efficiency.”

As part of its mission, The Carbon Trust helps organisations to understand their carbon, water and waste footprints, identifying potential efficiencies, and supporting the development and implementation of a business case for action. The Carbon Trust also awards certification to businesses that successfully measure and reduce their environmental impact.

Greater opportunities for efficiency

“A lot of the focus for greenhouse gas emissions has been on a company’s own operations, which we’ve certified since the launch of The Carbon Trust Standard in 2008,” explains Darran. “Attention now needs to turn to the broader supply chain.”

In light of this, The Carbon Trust has announced the development of a new certification for organisations taking effective action to minimise carbon emissions across their supply chains. A pilot phase is already underway.

“This programme will help to demonstrate the huge opportunity to capture the financial benefits of working with your supply chain to reduce emissions, and energy and resource consumption,” says Darran.

Realising the benefits

But do many businesses still see action on climate change as a threat rather than an opportunity? For Darran, this perception is a concern. “A lot of organisations see the green agenda as potentially increasing costs, because it’s an additional activity. But efficiency is a business imperative, as well as an environmental one.

“Realising the value demands action. To assess and improve supply chain energy efficiency, a business must:

  • understand how much energy is consumed in the production of its products and services, and where
  • establish ownership and governance of energy and resource use.”

Meeting the challenges

According to Darran, exploring these issues can bring its own challenges. “The questions that businesses need to ask are about getting into the nuts and bolts of a supplier’s operations. This isn’t the typical conversation a business would have as part of its procurement process or supply chain management.”

Potential barriers include:

  • sensitivity around costs
  • issues around data collection
  • understanding the often complex interlinks between energy consumption and other resources, such as water.

The Carbon Trust’s experience in working with businesses to overcome these challenges can be invaluable in terms of identifying the commercial benefits and communicating them effectively to key stakeholders.

Brokering trust

The Carbon Trust plays a key role in brokering often sensitive information between an organisation and its suppliers, to help both parties realise efficiencies. “Suppliers may not wish a customer organisation to have a full picture of the savings that it can achieve, because the customer might then negotiate that back in terms of price discounting,” Darran explains. “We can sit between two parties and handle the information confidentially.”

The pilot phase of the new certification is operating with companies of different size and sector. This will enable The Carbon Trust to fine tune its methodology and set realistic compliance benchmarks.

“We recognise that tackling greenhouse gas emissions can be challenging,” says Darran. “If the bar is set too high, we risk disenfranchising people. Realistic goals are a must.”

Significant business gains

Prominent examples of success, from companies such as Marks & Spencer and Whitbread, can also help stakeholders to appreciate the true value of efficiency. Darran notes: “In my opinion, these two organisations have led the way in terms of setting clear objectives, developing strategies to achieve those objectives and working with suppliers to ensure they contribute to their goals. That brings huge improvements to supply chain efficiency.”

The benefits are not limited to large corporations, and needn’t demand the attention of a dedicated team, Darran insists: “Understanding resource consumption creates opportunities for any company of any size to drive efficiency across their supply chain. There are always environmental, operational and cost gains to be made.”

Top tips to improve energy efficiency across the supply chain

  1. Get your house in order. Understand your total energy consumption, water consumption and waste production, and how they interlink.
  2. Engage your supply chain. Communicate the potential benefits of focusing on these key metrics.
  3. Promote responsibility. Encourage your supply chain to take a proactive approach to managing resources as part of a collaborative effort.
  4. Work to a common framework. Make sure you are tracking the appropriate metrics, and are focussed on a shared goal.

Useful links

Share this article

There are a number of ways you can share this article.

Sustainability

Our guide will help you discover the benefits of sustainability; create an action plan and policy tailored to your business and find out where to go for guidance and support.

Find out more
icon-spyglass

Tyson’s Ships Riggers

Family-run Tyson’s Ships Riggers receives a five-figure loan to invest in new machinery to support its growth plans.

Find out more

Everyday banking

Everyday banking whether you are starting-up or currently trading

Business Account for Start-ups 

Move your business account to us 

Business ToolBox

Try financial and digital tools for your business for 30 days with no obligation, including business planning and accountancy software.

Find out more
Back to top

Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service.

Lloyds Bank plc Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 0207 626 1500.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278.

We subscribe to The Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.uk

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all Business customers will be covered.

Lloyds Banking Group includes companies using brands including Lloyds Bank, Halifax and Bank of Scotland and their associated companies. More information on Lloyds Banking Group can be found at www.lloydsbankinggroup.com