Green logistics

Last updated

Green logistics describes all attempts to measure and minimize the ecological impact of logistics activities. [1] This includes all activities of the forward and reverse flows of products, information and services between the point of origin and the point of consumption. It is the aim to create a sustainable company value using a balance of economic and environmental efficiency. Green logistics has its origin in the mid-1980s and was a concept to characterize logistics systems and approaches that use advanced technology and equipment to minimize environmental damage during operations. [2]

Contents

Demand for action

Three main sections of green logistics Green Logistics.png
Three main sections of green logistics

Organizations have to face changes in the coming years.

In addition to increasing diversity and dynamics, environmental issues become more important. Social, political and economic demands for sustainable development force organizations to reduce the effect on the environment of their supply chains and to develop sustainable transport and supply chain strategies. [3]

There are strong interactions between logistics, environment and natural resources. In addition, the approach of logistics is interdisciplinary, holistic and cross-company. [4] Realising environmental objectives can be done in synergy with other strategic and financial goals. This is the basis of the great potential of this new logistics problem and challenge. [5]

Ecological concern

The "ecological concern" in logistics determines how far the logistics or the supply chain of a company is faced with the issue of environmental protection and resource conservation. Basically, a supply chain is affected by various influencing factors in this context. The main influencing factors are the stakeholders of the organization and the rising costs of energy and commodity. [6]

Some of the key stakeholders in this context are:

There is also the pressure of lenders, investors, insurers and investors. Indications of this are new forms of investment in the capital market, such as the Dow Jones Sustainability Index, that tracks the stock performance of the world's leading companies in terms of economic, environmental and social criteria. [7]

The dimension of ecological concern of a company is the product of these complex and varying factors.

Approaches

Logistics has a whole range of measures to protect the environment and resources. Some are new, others long-known. These actions can be assigned to different levels – maturity, range, scope, capital expenditure and resource requirements.

Corresponding to the holistic approach of green logistics, logistics has five starting points to implement measures for environmental protection and resource conservation:

  1. customer, market and product
  2. structures and planning
  3. processes, control and measurement
  4. technologies and resources
  5. employees, suppliers and service providers

Examples: [8]

The first four levels form a hierarchy and influence each other sequentially. Decisions on one level define the scope for further decisions on the following levels. Decisions at higher levels reduce the freedom for the following levels. Example: The determination of the packing mass of a product on the Level one defines the volume and weight of a product and therefore the maximum number of items per carrier (e.g., container). Thus, the decision made on level one influences the maximum capacity of a container. The effects on the environment, – measured as carbon-dioxide (CO2) emissions per transported product – therefore, are strongly influenced by the decisions made on level one. Decisions made on levels two and three, such as route optimization, also affect carbon-dioxide emissions. [9]

Challenges

While many countries and companies hope to reduce the damage to the environment by evaluating their operations around logistics, companies struggle to trace and track all parts of their supply chain to note where logistics could become more green. [10]

Many companies see tension between increased sales and increased emissions, and maximizing profit does not coincide with environmentally-friendly practices. [10]

In addition, the cost of green logistics can be high. For example, ammonia is 3-7 times more expensive than traditional marine fuels. [11]

Solutions

Because retailers have many suppliers, it is difficult to calculate all carbon emissions. However, retailers will reward suppliers who work hard to reduce carbon emissions. Therefore, suppliers will work hard for these labels. [10]

Many companies are developing plans to use green ammonia to replace the fuel used by today's cargo ships. [11]

See also

Related Research Articles

<span class="mw-page-title-main">Supply chain management</span> Management of the flow of goods and services

In commerce, supply chain management (SCM) deals with a system of procurement, operations management, logistics and marketing channels, through which raw materials can be developed into finished products and delivered to their end customers. A more narrow definition of supply chain management is the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronising supply with demand and measuring performance globally". This can include the movement and storage of raw materials, work-in-process inventory, finished goods, and end to end order fulfilment from the point of origin to the point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain.

<span class="mw-page-title-main">Supply chain</span> System involved in supplying a product or service to a consumer

A supply chain is a complex logistics system that consists of facilities that convert raw materials into finished products and distribute them to end consumers or end customers. Meanwhile, supply chain management deals with the flow of goods in distribution channels within the supply chain in the most efficient manner.

A sustainable business, or a green business, is an enterprise which has a minimal negative impact or potentially a positive effect on the global or local environment, community, society, or economy—a business that attempts to meet the triple bottom line. They cluster under different groupings and the whole is sometimes referred to as "green capitalism". Often, sustainable businesses have progressive environmental and human rights policies. In general, a business is described as green if it matches the following four criteria:

  1. It incorporates principles of sustainability into each of its business decisions.
  2. It supplies environmentally friendly products or services that replace demand for nongreen products and/or services.
  3. It is greener than traditional competition.
  4. It has made an enduring commitment to environmental principles in its business operations.
<span class="mw-page-title-main">Carbon footprint</span> Concept to quantify greenhouse gas emissions from activities or products

A carbon footprint (or greenhouse gas footprint) is a calculated value or index that makes it possible to compare the total amount of greenhouse gases that an activity, product, company or country adds to the atmosphere. Carbon footprints are usually reported in tonnes of emissions (CO2-equivalent) per unit of comparison. Such units can be for example tonnes CO2-eq per year, per kilogram of protein for consumption, per kilometer travelled, per piece of clothing and so forth. A product's carbon footprint includes the emissions for the entire life cycle. These run from the production along the supply chain to its final consumption and disposal.

Environmental accounting is a subset of accounting proper, its target being to incorporate both economic and environmental information. It can be conducted at the corporate level or at the level of a national economy through the System of Integrated Environmental and Economic Accounting, a satellite system to the National Accounts of Countries.

Eco commerce is a business, investment, and technology-development model that employs market-based solutions to balancing the world's energy needs and environmental integrity. Through the use of green trading and green finance, eco-commerce promotes the further development of "clean technologies" such as wind power, solar power, biomass, and hydropower.

<span class="mw-page-title-main">Carbon accounting</span> Processes used to measure emissions of carbon dioxide equivalents

Carbon accounting is a framework of methods to measure and track how much greenhouse gas (GHG) an organization emits. It can also be used to track projects or actions to reduce emissions in sectors such as forestry or renewable energy. Corporations, cities and other groups use these techniques to help limit climate change. Organizations will often set an emissions baseline, create targets for reducing emissions, and track progress towards them. The accounting methods enable them to do this in a more consistent and transparent manner.

Green marketing is the marketing of products that are presumed to be environmentally safe. It incorporates a broad range of activities, including product modification, changes to the production process, sustainable packaging, as well as modifying advertising. Yet defining green marketing is not a simple task. Other similar terms used are environmental marketing and ecological marketing.

<span class="mw-page-title-main">Sustainable packaging</span> Packaging which results in improved sustainability

Sustainable packaging is packaging materials and methods that result in improved sustainability. This involves increased use of life cycle inventory (LCI) and life cycle assessment (LCA) to help guide the use of packaging which reduces the environmental impact and ecological footprint. It includes a look at the whole of the supply chain: from basic function, to marketing, and then through to end of life (LCA) and rebirth. Additionally, an eco-cost to value ratio can be useful The goals are to improve the long term viability and quality of life for humans and the longevity of natural ecosystems. Sustainable packaging must meet the functional and economic needs of the present without compromising the ability of future generations to meet their own needs. Sustainability is not necessarily an end state but is a continuing process of improvement.

Sustainable consumption is the use of products and services in ways that minimizes impacts on the environment.

Ecoflation is a future scenario in "Rattling Supply Chains", a research report by the World Resources Institute and A.T. Kearney, released in November 2008. It is characterized by natural resources becoming scarcer and sustainability issues become more pressing, leading to an increase in the price of commodities. The effects of the increase in the price of commodities are felt by corporations suffering environmental costs being added to their usual cost of doing business.

Supply-chain sustainability is the management of environmental, social and economic impacts and the encouragement of good governance practices, throughout the lifecycles of goods and services. There is a growing need for integrating sustainable choices into supply-chain management. An increasing concern for sustainability is transforming how companies approach business. Whether motivated by their customers, corporate values or business opportunity, traditional priorities such as quality, efficiency and cost regularly compete for attention with concerns such as working conditions and environmental impact. A sustainable supply chain seizes value chain opportunities and offers significant competitive advantages for early adopters and process innovators.

Sustainable distribution refers to any means of transportation / hauling of goods between vendor and purchaser with lowest possible impact on the ecological and social environment, and includes the whole distribution process from storage, order processing and picking, packaging, improved vehicle loadings, delivery to the customer or purchaser and taking back packaging.

Choice editing refers to the active process of controlling or limiting the choices available to consumers so as to drive to an end goal, specifically by banning things or imposing punitive taxation. The term has gained currency in discussions about sustainability.

Sustainability marketing myopia is a term used in sustainability marketing referring to a distortion stemming from the overlooking of socio-environmental attributes of a sustainable product or service at the expenses of customer benefits and values. Sustainability marketing is oriented towards the whole community, its social goals and the protection of the environment. The idea of sustainability marketing myopia is rooted into conventional marketing myopia theory, as well as green marketing myopia.

Environmental certification is a form of environmental regulation and development where a company can voluntarily choose to comply with predefined processes or objectives set forth by the certification service. Most certification services have a logo which can be applied to products certified under their standards. This is seen as a form of corporate social responsibility allowing companies to address their obligation to minimise the harmful impacts to the environment by voluntarily following a set of externally set and measured objectives.

An environmental profit and loss account is a company's monetary valuation and analysis of its environmental impacts including its business operations and its supply chain from cradle-to-gate. An E P&L internalizes externalities and monetizes the cost of business to nature by accounting for the ecosystem services a business depends on to operate in addition to the cost of direct and indirect negative impacts on the environment. The primary purpose of an E P&L is to allow managers and stakeholders to see the magnitude of these impacts and where in the supply chain they occur.

<span class="mw-page-title-main">Resource efficiency</span>

Resource efficiency is the maximising of the supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively, with minimum wasted (natural) resource expenses. It means using the Earth's limited resources in a sustainable manner while minimising environmental impact.

In commerce, global supply-chain management is defined as the distribution of goods and services throughout a trans-national companies' global network to maximize profit and minimize waste. Essentially, global supply chain-management is the same as supply-chain management, but it focuses on companies and organizations that are trans-national.

Green supply chain management (GSCM) is the consideration of environmental issues within supply chain management.

References

  1. ↑ Geroliminis, Nikolaos; Daganzo, Carlos F. (2005). "A Review of Green Logistics Schemes Used in Cities Around the World". UC Berkeley: Center for Future Urban Transport: A Volvo Center of Excellence.
  2. ↑ Thiell, M., Zuluaga, J., Montanez, J., van Hoof, B.: Green Logistics – Global Practices and their Implementation in Emerging Markets, p. 2, Colombia 2011.
  3. ↑ "Green Logistics". greenlogisticsconsultants.com. Retrieved 27 November 2012.
  4. ↑ Hoessle, Ulrike: Sustainable Logistics. Best Lessons from the Global Compact (=WWS Series 2). Seattle 2013. ISBN   978-0-9898270-1-0, http://www.wwsworldwide.com.
  5. ↑ Archived 6 February 2013 at the Wayback Machine . Retrieved 27 November 2012.
  6. ↑ "Domain im Kundenauftrag registriert". umweltschutz-bw.de. Retrieved 27 November 2012.
  7. ↑ djindexes.com https://web.archive.org/web/20121126213905/http://www.djindexes.com/sustainability/. Archived from the original on 26 November 2012. Retrieved 27 November 2012.{{cite web}}: Missing or empty |title= (help)[ title missing ]
  8. ↑ Johannes Kals: Betriebliches Energiemanagement – Eine Einführung, pp. 95–98, Kohlhammer Verlag, Stuttgart 2010, ISBN   978-3-17-021133-9.
  9. ↑ Straube, F., Cetinkaya, B: Umwelt und Logistik, pp. 62–81 in Straube, F.; Pfohl, H.-Chr.: Trends und Strategien in der Logistik – Globale Netzwerke im Wandel, Deutscher Verkehrs-Verlag, Bremen 2008, ISBN   978-3-87154-388-3.
  10. 1 2 3 Corkery, Michael; Creswell, Julie (2 November 2021). "Corporate Climate Pledges Often Ignore a Key Component: Supply Chains". The New York Times. ISSN   0362-4331 . Retrieved 14 December 2021.
  11. 1 2 Doniger, Alicia (19 October 2021). "Amazon's new net-zero carbon pledge is focused on the oceans, as shipping giants pursue alternative fuels". CNBC. Retrieved 14 December 2021.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.