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News Article

Key Actions to Counter the Environmental Impact of Globalization

By Rodrigo Brugada | Wed, 04/21/2021 - 14:29

The world has evolved to the point where consumers can make purchases from two continents apart and have their products delivered to their doorstep in a matter of days. This interconnectedness does not come without its toll, however, and we must critically evaluate how to best move forward, taking into account the environmental impact of globalized supply chains.


McKinsey estimates that more than 80 percent of greenhouse-gas emissions and more than 90 percent of companies’ environmental impact comes from their supply chains. The Economist states that “a typical company triggers emissions levels of up to twenty times higher from its suppliers (and customers) than from within its own organization.” To reach global emissions targets by 2050, consumer packaged goods companies need to cut their greenhouse gas emissions by more than 90 percent, according to Blume.


With last year’s increase in delivery services, as reported by Forbes, and no end to globalized processes in sight, it is paramount to make every bit of these processes as sustainable as possible. But, what available options are there? 


There is a need for acquiring better data to analyze a company’s environmental footprint. This is being tackled by initiatives like MIT’s sustainable logistics initiative or project Fineprint. These initiatives not only allow for more accurate measurements of carbon and other ecological footprints, but they also provide a detailed understanding of raw materials extraction and material flow. Companies also need to advise suppliers so they can contribute to the former’s sustainability goals. This goes hand-in-hand with collaborating with governments, international agencies, NGOs and, more broadly, with civil society to transform practices and ensure transparency. One example of this approach is the Better Cotton Initiative.


In terms of deliveries, companies must set optimum routes and plan supply efficiently following demand. These problems may be solved with new technologies, such as artificial intelligence. Finally, there is a lot to be done with last-mile delivery. There is a trend towards the adoption of electric vehicles and better packaging. Such is the case of Picap, as reported by Entrepreneur.


It should also be noted that governments and policymakers also need to contribute towards this change and that radical shifts in the economy, such as the adoption of circular economies, may be necessary to reach global emission reduction targets. And, while most of the burden lies on the shoulders of corporations and government, consumers also have the responsibility of remaining well-informed, denouncing greenwashing and demanding transparency and accountability, keeping in line with the UN’s Sustainable Development Goals.

The data used in this article was sourced from:  
McKinsey, The Economist, Blume, Forbes, MIT, Fineprint, Better Cotton, Dataiku, Entrepreneur, Netherlands Enterprise Agency, Business News Daily, Unit
Rodrigo Brugada Rodrigo Brugada Journalist & Industry Analyst