We all have come across enough headlines that focus on the state of supply chain decarbonization. After all, it does hold the future of the planet. With industries looking to expand and retain their current market share, it is imperative to have that success by doing good for the environment and the inhabitants of this planet. With value chain decarbonization curating the roadmap for zero GHG emission, it is a priority for SCM to manage its one hundred percent efficacy. This is achieved by ensuring the finances required to run the carbon-negating framework are certain.
With decarbonization projects requiring substantial investment and a scalable timeline, leadership is needed to lock the cash flow that will keep the process running till the objectives are met. The return on investment, though higher eventually, does require patience and, of course, proper planning.
To tackle such uncertainty, supply chain management has broken down the eventual ways to source funding for the decarbonization process. In this write-up, we’ll cover the ingenuity the value chain stakeholders have found out to make sure that the carbon-neutral roadmap never stutters. Be it realigning internal operations, managing external stakeholders, or a combination of both, this precedence is indeed worth to be captured. So, let’s dive right in.
- Inventory ManagementEvery process involves capital. More so for the supply chain as it depends entirely on the customer's demand. For management to make the most finance invested without any loss, it needs to ensure that it deploys an analytics-laden platform that gives the production insight to avoid overstocking and stockout. Being mindful of accurate demand enables exact metrics of raw material procurement and production with related factors of the workforce employed. The logistics leg of the value chain also does well if it focuses on the quality of its products. This reduces the chances of product return rate, which saves additional reverse supply chain costs and avoids carbon-related scope emissions.
- Supplier Relations With raw material procurement driving the first production stage, a leadership team reaches out to local vendors to finalize bulk purchasing at a much more effective rate. With localized suppliers being part of the network, it is also beneficial on sustainable counts as it results in a minimal carbon footprint and opens up more green avenues for both parties involved.
- Improving Transportation Efficiency Delivering final products, if planned well, can save a considerable amount of funds. An intelligent transport management system can focus on route optimization, smart load consolidation, intelligent delivery sequence, and reduced fuel consumption that contributes to saving costs upfront. Logistics management can also find breakthroughs by deploying electric vehicle fleets that not only echo sustainable actions but funnel the retained capital to other avenues of supply chain decarbonization.
- Energy Efficiency CreditsBusinesses that have actively invested in carbon-neutral projects can showcase their energy efficiency credits (EECs) and renewable energy certificates (RECs) to attract investment from fellow collaborators and businesses to carry on their excellent work. A considerable effort also attracts rebates for businesses from authorities, helping them save money and project it to their sustainable projects.
- Collaboration with Like-Minded BusinessWe often come across news where companies align their common interests for the world's betterment and their ESG goals. In such scenarios, conglomerates usually align their Research and Development teams to work towards a collaborative project or fast-track means that will help the ecosystem.
- Working with Financial InstitutionsFinancial institutions like investment and commercial banks can help companies to raise money for their decarbonization projects. By reaching out to potential investors who back similar projects, finance intermediaries open avenues for businesses to ensure their smooth functioning.
- CrowdfundingIf the people at large believe in your commitments and subsequent product offerings made through sustainable methods, then crowdfunding does help the companies, by and large, to attract additional funds. Kickstarter, a crowdfunding platform in the US, helps small-scale project ideas see the light of day by enabling platforms for crowdfunding. Though not suitable for seeking funding for large operations, it can be beneficial for small-level industries.
There you go. These were some distinct ways management looks to accrue funds for its sustainable projects. While these methods require extra effort, they sure keep the faith going toward building a carbon-neutral world for the generations to come.