Irish manufacturers must increasingly be able to measure and reduce their carbon footprint if they are to succeed on export markets, according to the latest BearingPoint Green Supply Chain Monitor 2010-11. The report finds that about two thirds of European companies surveyed consider green supply chain as a strategic priority now or in the short term.
“The environmental impact of goods is becoming an increasing important decision when it comes to purchasing,” explains Claudia Carr, supply chain lead for BearingPoint Ireland. “Over two thirds of companies surveyed indicated that they have implemented, or are implementing, a sustainable purchasing policy. Understanding and managing your carbon footprint is going to become key and Irish companies need to be prepared for this shift.”
Over half of respondents indicated that they did not renew contracts with suppliers who did not respect their green charter, and one third reported a shift from global sourcing towards near or local shore sourcing. “The environmental impact of transportation and manufacturing from some low cost economies is leading to a review of purchasing policies by many organisations. There is a growing opportunity for Irish companies, with good green credentials, to compete for this business,” she adds.
John Whelan, chief executive of the Irish Exporters Association, welcomes the report. “There is no question that Irish businesses which produce transparently environmentally positive products, delivered by carbon neutral logistics services will succeed on international markets,” he says. “At the IEA we fully endorse the reports findings and urge exporters to make the investment in proper carbon labelling based on an accurate supply chain foot print as well as a production process footprint, to gain a competitive edge in our main developed economy markets.”
Fred McDarby, manager, Environment Department, Enterprise Ireland, stresses the opportunity for Irish companies. “We are encouraging our companies to prepare for the impact of Green Procurement (both public and private) on their markets at home and overseas and have put in place a range of supports to help them make savings and enhance the green credentials of their products and services.”
The report highlights the importance of design with at least 80% of the environmental impact of a product being developed during the design process. This not only relates to the way in which the product is produced, but also how it is used and ultimately disposed of. Sectors traditionally active in R&D and innovation have become the leaders in eco-design.
Another finding of the 4th BearingPoint Supply Chain Monitor is that green supply chain initiatives are increasingly being driven by brand image and economics rather than regulation.
“Environmental regulations were the main driver when we last conducted the monitor two years ago. It is significant that boards are now actively promoting green supply chain to enhance their brand reputation and reduce costs,” comments James Govan of BearingPoint.
Indeed, the global economic downturn had accelerated rather than hampered green supply chain initiatives. The study finds that two thirds (66%) of the companies surveyed said that economic conditions had brought forward green initiatives rather than put a brake on them. Many Irish companies, like their European counterparts, have identified cost savings by implementing environmentally friendly initiatives.