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Climate change can only be tackled if governments and companies rethink the way the planet’s most polluting supply chains are managed and run. A study co-authored by NEOMA researcher Professor Martin C. Schleper takes a closer look at how business can incorporate sustainable, carbon-negative innovations.

All the products we use in our day-to-day lives travel short or long distances to get to us. Their complex supply chains have an economic, social and environmental impact that is no trifling matter. To be more precise, over half of all greenhouse gases worldwide are emitted by just eight industrial supply chains, including food, construction and fashion.

Experts agree that we will never meet the carbon neutrality targets designed to address climate change without the active involvement of the heaviest polluters. This is the background to the research by NEOMA’s Martin Schleper and his colleagues, which explores the diverse approaches taken by companies and the real effects they have on the climate.

Transformation… but within limits

In the first instance, the study examines adaptation and mitigation, two common methods businesses employ to modify the way they manage their supply chains. Adaptation is a reactive strategy based on risk management, whereby industrial activities are adjusted to the consequences of climate change. This might involve relocating supplier sites if they are situated in critical areas. Mitigation is a more proactive approach: its goal is to cut down or wipe out emissions. How? By leveraging renewable energy to power manufacturing, switching to low-carbon production processes or using recyclable materials.

And yet, the ultimate aim of each of these strategies is to ensure that companies remain profitable. Although these initiatives are vital, the consensus among experts is that they do not go far enough. In fact, they might even be detrimental to a company’s reputation over time. The reality is that society and consumers could demand that business make more of an effort. The study points out that if today’s polluting chains are to play a major role in tackling the climate, they don’t just need to be adapted: they need to be transformed.

NET plus ultra technology

The aim of the Paris Agreement is to hold the increase in the global average temperature to below 2°C compared to pre-industrial levels. Climate scientists argue that more radical measures are called for to meet this goal – which is where negative emission technology comes into play. NET captures CO2 from the atmosphere and stores it on a long-term basis in geological reservoirs on land, in the ocean or in products. A mix of different methods is currently under consideration, from the most natural – such as reforestation – to the most technical.

The authors of the article zeroed in on biochar, which sequesters carbon for thousands of years. It is produced at elevated temperatures through the chemical decomposition of organic material, forming a type of charcoal. This can then be used in agricultural fertilisers to improve soil quality.

Another mechanism, which is at an earlier stage of development, involves capturing carbon dioxide from the air. A liquid solvent or solid sorbent is used to extract CO2 from the atmosphere; this is then recovered before being injected deep underground for sequestration. Although these solutions have the potential to succeed, experts note that huge uncertainty surrounds the governance, cost, effectiveness and social acceptability of NET as a whole.

Rethinking supply chains

Given the newness of the technology, some innovations will in all likelihood struggle to gain traction as a result of ill-defined markets, a lack of infrastructure and a dearth of partnerships. To take one example: CO2 capture is the victim of not-in-my-backyard (NIMBY) syndrome, which is also putting the brakes on the roll-out of renewable energies. This is an acceptability issue: certain people want to take advantage of technology but are opposed to the infrastructure because of its potential detrimental consequences. So, what can be done to transform supply chains effectively for the good of our planet?

The study’s key takeaway is this: there will be no transition without political intervention. If there aren’t any regulations to incentivise or compel companies to take up the technology, it is unlikely that big business will invest heavily in 100% green partnerships. New regulations in the form of carbon taxes or quota systems may also spur the stakeholders into action. The study further highlights a paradigm shift where the environment is now becoming a priority. To put it another way: we need to develop industrial activities not for their economic profitability but for their environmental benefits. It’s an approach to the future that is radically opposed to today’s management methods.

Find out more

MATOS, S. V., M. C. SCHLEPER, J. K. HALL, C. M. BAUM, S. LOW, B. K. SOVACOOL, “Beyond the new normal for sustainability: transformative operations and supply chain management for negative emissions”, International Journal of Operations and Production Management, August 2024, Vol. 44, No. 13, pp. 263-295. https://www.emerald.com/insight/content/doi/10.1108/IJOPM-06-2024-0487/full/html