July 3, 2023 is the “highest global average temperature” recorded since 1979. And just one month after breaking the record for high temperatures, “Earth Ecological Overload Day” came on August 2nd, indicating that human activities had already used up the total renewable natural resources of the Earth this year and entered an ecological deficit state. The emissions of greenhouse gases such as carbon dioxide are the main cause of global warming, and industrial carbon reduction is urgent.
Zhang Kaipeng
Senior Vice President of Schneider Electric
Head of Global Supply Chain China
The Carbon footprint of an enterprise not only exists in itself, but also in the upstream and downstream supply chain. According to the Global Center for Environmental Information Research (CDP), on average, the carbon emissions from the supply chain are more than five times that of direct emissions from enterprises. Taking Schneider Electric as an example, the carbon emissions of its own factory account for only 10% of the whole supply chain, while 90% of the carbon emissions come from upstream and downstream. Therefore, accelerating industrial carbon reduction and supply chain collaboration are key.
Through in-depth interviews with supply chain managers from multiple industry leaders, the current situation, challenges, and transformation directions of supply chain management in Chinese enterprises were objectively and comprehensively presented.
Difficulty in Transforming Upstream and Downstream Enterprises
The biggest challenge in reducing carbon emissions in the supply chain
The biggest challenge in expanding from a single enterprise to overall carbon reduction in the supply chain lies in the large number of upstream and downstream enterprises, and they are generally facing various difficulties in low-carbon transformation from concept to implementation.
Carbon reduction awareness still needs to be improved
Most suppliers in the upstream of the supply chain are small and medium-sized enterprises, and their awareness and willingness to take action towards green and low-carbon are generally low. According to the survey of Schneider Electric Business Value Research Institute, 43% of the surveyed enterprises are worried that the return on investment in carbon reduction is not as expected.
Lack of practical experience
Many enterprises are facing the issue of carbon reduction for the first time and do not know where to start, unable to develop a scientific, clear, and executable carbon reduction roadmap. Only 19% of the surveyed enterprises have determined a clear carbon reduction plan.
Insufficient technical level
There is not enough technical support for carbon reduction implementation, and nearly 60% of surveyed companies express an urgent need to improve process carbon reduction and new energy technologies.
Lack of internal and external resources
Carbon reduction funds and talent investment are limited, with 65% of respondents stating that business pressure has indeed had an impact on companies’ carbon reduction efforts.
Pioneer empowerment
Activate supply chain “synergies”
The pain points of low-carbon transformation in enterprises are often difficult to solve on their own, and there is an urgent need for the empowerment of “pioneers”. Pioneers are not only leaders in supply chain construction, but also industry benchmarks for sustainable development. Empowers, on the other hand, need to have the willingness to take on the heavy responsibility of driving upstream and downstream carbon reduction. Only in this way can we empower upstream and downstream enterprises with mature carbon reduction concepts and advanced carbon reduction technologies, rich expert resources, and comprehensive implementation experience, and activate the “synergistic effect” of supply chain carbon reduction.
The Shi family is such a “capable and willing” pioneer and empowerer. We are not only experts in supply chain management and sustainable development, but also actively driving upstream and downstream enterprises to jointly reduce carbon and work together to promote the process of industrial carbon reduction.
With its leading actions in supply chain construction, Shijia has been on Gartner’s “Top 25 Global Supply Chains” list for 8 consecutive years, and rose to the top of the global list in 2023.
Among the 29 factories and logistics centers of Shi Jia in China, 18 are intelligent factories and logistics centers.
In terms of sustainable development, Shijia has 65 “zero carbon factories” globally, 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 Shijia China has been reduced by 13%.
Schneider Electric Beijing Yizhuang Factory
Shi Jia also proposed a long-term commitment to climate change:
By 2025, achieve carbon neutrality at the operational level;
By 2030, achieve “zero carbon readiness” at the operational level;
By 2040, achieve carbon neutrality in the end-to-end value chain;
By 2050, achieve net zero carbon emissions in the end-to-end value chain.
At present, Shijia has created an end-to-end green supply chain that covers green design, green procurement, green production, green delivery, and green operation and maintenance. The “Zero Carbon Plan” launched in July 2021 for global suppliers is an important practice in promoting end-to-end carbon reduction goals.
The “Zero Carbon Plan” of Schneider Electric suppliers aims to help the world’s top 1000 suppliers reduce carbon by 50% by 2025 by providing technical guidance, consulting services and other means, including 230 core suppliers in China. Over the past two years, Shijia has helped global suppliers reduce carbon emissions by an average of 20%. It is worth mentioning that Chinese suppliers have achieved particularly significant carbon reduction results, with an average carbon reduction of 21%.
Four major assistance
Fully reap “green value”
Collaborating and empowering 230 suppliers to reduce carbon emissions is an extremely complex system engineering project. In the “Zero Carbon Plan”, Shijia provides suppliers with four systematic and comprehensive carbon reduction assistance from the top-level framework development to specific implementation details.
theoretical support
Shi Jia actively shares his own experience and invites experts in industry policies, green power, and other fields to provide forward-looking guidance; Encourage suppliers with green procurement to increase their willingness to reduce carbon emissions. Many suppliers have therefore established a positive awareness of carbon reduction, and even “draw inferences from one example”, actively exploring more potential for carbon reduction.
technical support
Shi Jia provides suppliers with technical training and carbon reduction solutions such as Carbon footprint analysis and carbon trajectory definition, as well as leading digital solutions to help them build carbon reduction capacity, increase efficiency and reduce emissions, and achieve green transformation.
Resource support
Shi Jia shares third-party resources and experience with suppliers, such as opportunities for green power, green certificate procurement, CDP carbon emission declaration, consultation and certification, and has opened more than 10 online courses to regularly provide training for suppliers.
On site support
The expert team from Shijia conducted in-depth research and analysis on the potential for carbon reduction in supplier factories, and invited them to visit their own factories and conduct on-site discussions to answer suppliers’ questions and explore new models of cooperative carbon reduction together.
With the assistance of the four major systems, Tianjin Jinrong Tianyu Precision Machinery Co., Ltd. (hereinafter referred to as “Jinrong Tianyu”) has fully reaped “green value” and become one of the carbon reduction benchmarks in the Shijia supply chain.
Since participating in the “Zero Carbon Plan” in 2021, Jinrong Tianyu has established its own top-level sustainable development plan and long-term goals, aiming to achieve a 50% carbon reduction compared to the benchmark year (2019) by 2025.
Jinrong Tianyu integrates multiple energy-saving and carbon reduction technologies based on the Shijia EcoStruxure architecture, with only the installation of its own photovoltaic technology, which is expected to reduce carbon by 1100 tons per year.
By the end of 2022, Jinrong Tianyu’s carbon emission reduction per billion yuan of sales has decreased by 22.2%.
While achieving results in its own carbon reduction efforts, Jinrong Tianyu has also begun to unleash sustainable influence externally. In 2022, Shijia released the “Carbon Reduction Master” plan, and with excellent carbon reduction performance, Jinrong Tianyu became one of the first partners to join the “Carbon Reduction Master”, working together with Shijia to build a broader sustainable ecosystem.
The second season of “Carbon Reduction Master” releases the “Carbon Reduction Master Course” with the support of dozens of business experts, taking you to understand the low-carbon development of enterprises from 0 to 1!
Faced with the urgent global demand for carbon reduction, Shi Jia believes that enterprises need to further empower upstream and downstream partners and the entire ecosystem on the basis of accelerating their own carbon reduction, and continue to build sustainable influence, in order to truly promote the acceleration of the entire society towards sustainability.