China's supply chain management still faces four major challenges, with "chain owners" urgently aiming to reduce carbon emissions | Green | Supply Chain

Against the backdrop of the "dual carbon" goal and a unified national market, China's supply chain has put forward higher requirements for green and low-carbon while ensuring resilience. A report points out that with the increasing uncertainty of the global environment and the emergence of new situations, technologies, and demands, Chinese enterprises are facing four major challenges in supply chain management. How to ensure that the supply chain achieves its carbon reduction goals as early as possible, "chain owners" should play a greater role.

Recently, Schneider Electric and the Institute of Global Co development at Tsinghua University jointly released a supply chain report titled "Towards a Customer Centered First Class Supply Chain", which pointed out a significant increase in external operational risks for enterprises. Sudden events exacerbate supply chain fluctuations, industrial upgrading has an impact on traditional supply chains, and changes in customer demand can also lead to supply-demand imbalances in the supply chain. Secondly, the efficiency of internal management urgently needs to be improved. The increasing construction costs brought about by enhancing the resilience of the supply chain and the expansion of enterprise scale have made supply chain operations more complex and difficult. Once again, the difficulty of ecosystem collaboration has increased, and the transparency and synergy of the ecosystem are still insufficient. Finally, green transformation is urgent, and the pressure of policies and markets to reduce carbon emissions continues to increase.

The report also stated that over 15000 companies have been required by downstream customers to disclose their carbon emissions through CDP, and 53% of consumers hope to have more and more low-carbon products and consumer goods to choose from.

Zhang Kaipeng, Senior Vice President of Schneider Electric and Head of Global Supply Chain China, told reporters that enterprises and China's own green and low-carbon development should be closely linked, and sustainability should not stop at the company's strategy, but should be expanded into a supply chain strategy. Schneider has launched a supplier "zero carbon plan", hoping that by 2025, the world's major 1000 supplier partners can halve carbon emissions at the operational level, involving 210 Chinese suppliers. It is hoped that these enterprises can play a demonstration role.

A few years ago, the company incorporated environmental protection, green and sustainability into its supplier assessment system. In addition to quality and delivery, low-carbon requirements will also become increasingly high. "The joint efforts of policy pressure, market demand, one's own responsibility, and partner support can promote enterprises to better practice green concepts." Zhang Kaipeng said.

It is understood that Schneider Electric has 65 "zero carbon factories" worldwide, 17 "zero carbon factories" in China, 15 "green factories" recognized by the Ministry of Industry and Information Technology, and 12 "carbon neutral" factories. By deploying diverse digital operation systems, the overall energy consumption of the supply chain in China has been reduced by 13%. In addition, carbon emissions exist not only within the enterprise itself, but also in the upstream and downstream supply chains. Therefore, in addition to achieving carbon neutrality on its own, Schneider Electric also promises to achieve carbon neutrality in the end-to-end value chain by 2040 and net zero carbon emissions in the end-to-end value chain by 2050.

In the fast-moving consumer goods industry, the supply chain is also quietly turning green. As a member of the label printing business supply chain of L'Oreal China, Yali Group only achieved a D-level sustainability rating. After two years of green transformation, Yali Group's Suzhou factory has taken energy-saving measures such as adding insulation walls, replacing LED lights, installing centralized water cooling systems, and laying solar photovoltaic panels, reducing electricity consumption by 50% while saving more than 30%, leading the way in achieving carbon neutrality in the factory area. At present, the company's rating has reached B level and we strive to reach A level by 2026.

As a "chain leader" enterprise, Lenovo is also collaborating with suppliers to reduce carbon emissions. Every year, Lenovo has set environmental management goals for suppliers in multiple dimensions such as green energy use, greenhouse gas emissions in transportation, and product scrapping management. It has also launched the "Green Development Scorecard", which manages more than 30 indicators including behavior guidelines, CDP performance evaluation, water resource reduction goals, conflict mineral management, greenhouse gas emissions reduction, and sustainable development reports.

Marriott International Group plans to reduce its landfill waste and kitchen waste by 45% and 50% respectively by the end of 2025, while reducing water usage by 15%, carbon emissions by 30%, and achieving at least 30% of electricity from renewable energy sources. Marriott International Group's Chief Operating Officer for Greater China, Ma Lei, also stated that sustainable development in the hotel industry is not contradictory to socio-economic growth. "Sustainable development and socio-economic development are mutually supportive and progressing together. When enterprises and consumers reach a consensus on sustainable development, it can promote economic and social transformation and high-quality development."

Regarding this, Bai Zhong'en, Dean of the School of Economics and Management at Tsinghua University, said, "Green supply chain is an important topic in the field of dual carbon and supply chain. The government has proposed the dual carbon goal and strengthened supervision of high energy consuming enterprises. With the improvement of environmental awareness, consumers and downstream customers in the supply chain have increased their preference for low-carbon footprint products, and carbon emissions have become an important factor in ESG ratings. Enterprises need to explore how to achieve sustainable development goals in supply chain management with innovative thinking and forward-looking vision."