Electronics manufacturers are asking for more sustainability data from suppliers as the meaning of Corporate Social Responsibility extends further up and down the supply chain. These conversations are opportunities to manage greenhouse gas (GHG) emissions from a potentially significant source: freight transportation.
From materials-sourcing to manufacturing, distribution, take-back, and recycling, transportation-related GHG emissions data can serve as incentives to change behavior, improve record-keeping practices, and move goods more efficiently, according to Nancy Gillis, chief executive officer of the Green Electronics Council (GEC), a non-profit organization that promotes sustainably produced IT products.
“The result of more efficient transportation is lower costs,” Gillis added. “It’s also a way to show that sustainability is a priority in your selection and management of suppliers.”
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Electronics manufacturers and their transportation providers are using a range of strategies and data-driven tools to improve the way they manage emissions across the supply chain. Here are three steps you can take.
1. Verified data reporting
The CDP (formerly the Carbon Disclosure Project) recently refined its supply chain questionnaire to include trucking, shipping, rail, and other types of transportation services. This focus reflects an emerging consensus around the growth in freight moves and the need to address transport-related emissions.
In the United States, Canada, and Mexico, nearly 4,000 companies participate in the SmartWay Transport Partnership, a voluntary program developed by the U.S. Environmental Protection Agency to create standards for measuring and publicly disclosing transportation-related emissions and performance.
SmartWay data is verified by the EPA and is available at no cost to shipper partners. It integrates easily into enterprise-wide systems for business management, environmental reporting, compliance, and shareholder response.
Carriers in the SmartWay program are scored and ranked according to their emissions per mile and per ton-mile. Knowing that they’re being benchmarked among their peers, SmartWay carriers are driven to cut costs and develop environmentally efficient ways to move goods. They can make use of a team of experts at SmartWay who can provide technical expertise, data analysis, and training for shippers and transportation providers.
Cisco, HP, Intel, and Microsoft are among the electronics suppliers that strongly encourage carriers to participate and report their environmental performance through SmartWay.
Because different countries and regions have different freight-sustainability standards, the Global Logistics Emissions Council (GLEC) was created to harmonize these programs so international companies can calculate their GHG footprint across a global supply chain. GLEC uses SmartWay as a template, which makes it easier to factor SmartWay data into an overall assessment of global emissions for the CDP and other sustainability reports.
2. Supplier agreements
Freight contracts can encourage suppliers to be transparent with emissions data, including requesting that top suppliers publish their own corporate responsibility reports and commit to GHG emissions tracking and reporting. The Responsible Business Alliance (RBA), formerly the Electronic Industry Citizenship Coalition (EICC), offers a code of conduct that mandates GHG emissions reporting; electronics manufacturers can include the RBC code of conduct in their supplier agreements.
Dell expects its suppliers to publish a Global Reporting Initiative (GRI)-based sustainability report online and update the report annually, and also to report annually to the CDP Supply Chain climate and water programs. Likewise, Intel asks its top-tier suppliers to participate in the CDP Supply Chain survey and submit baseline data on their carbon footprint. In 2017, Intel received a 96 percent response rate.
Both Dell and Intel participate in SmartWay and annually disclose their total carbon emissions. By requiring their transportation providers to do so as well, they can more accurately account for freight emissions in their supply chain.
3. Efficient packaging and mode-shifting
The push to create smaller, thinner, lighter-weight computers and other electronics products is creating opportunities to re-think packaging and refine processes for pallet building, trailer utilization, and increased recycling.
In 2016, HP introduced packaging for its notebooks that uses less material and optimizes shipping densities, resulting in 8,600 tons of CO2 emissions avoided (from freight) compared to previous years. The company also developed a new lightweight foam shipping pallet for ocean and rail shipments of new desktops, which avoided an additional 360 tons of CO2 emissions from freight. In 2017, Microsoft reduced package weight by an average of 17 percent year over year through a combination of right-sizing and new lightweight materials, helping that company reduce its environmental footprint from freight.
Modal shifts can have a significant impact on GHG emissions. The Association of American Railroads reports that an intermodal train in North America can haul the equivalent of 280 truckloads of freight, with each ton traveling an average of 479 miles on one gallon of fuel.
Cisco has a mode-shifting initiative within its overall GHG reduction plan that focuses on shipping by ocean instead of air whenever practical. In 2017 the company reported that this effort alone avoided 113,540 cumulative metric ton of CO2 emissions from freight.
For electronics manufacturers, the supply chain is the largest source of carbon and other GHG emissions. Within the supply chain, transportation is a rapidly growing source of emissions, and in the United States recently surpassed electricity generation as the largest source of GHG emissions.
Fortunately, transportation is also an opportunity for electronics manufacturers to develop a more sustainable, responsible, and collaborative approach to the movement of goods. To learn more about EPA SmartWay, visit www.epa.gov/smartway.