New research shows that chemical companies already have people who can help them to reduce their emissions faster. But can the businesses get this crucial team up to speed?

The chemical industry is taking steps to reduce its greenhouse gas (GHG) emissions. But new research by Maersk and FT Longitude shows they could go further by working more closely – and assertively – with suppliers. The survey of 500 chemical businesses worldwide shows that most of the chemical industry’s GHG emissions come from its indirect activities: on average, 63% of these businesses’ total greenhouse gas emissions fall into this category, which is known as scope 3. This includes emissions generated indirectly in logistics, transportation, and warehousing. By including scope 3 the chemical industry can increase the overall supply chain decarbonisation, going beyond the operational/direct savings from action on scope 1 and 2 emissions. And to do that it will need to work much more closely with suppliers such as logistics services providers.

Chemical industry GHG emissions: is procurement doing enough?

As the function that deals directly with those third-party providers, procurement is best placed to take on this challenge. But the procurement teams of many companies within the chemical industry are not set up for it.

A supplier’s environmental performance is not a significant factor in most procurement functions’ purchasing decisions – even if we put cost, speed, and regulatory compliance to one side. Just 37% of the companies in the research list the environmental impact of a product or service as one of their top three additional criteria. Even fewer – 33% – consider the environmental impact of logistics and transportation.

This suggests that suppliers’ green credentials are being ignored, which will do nothing to encourage progress. If shifting to greener products, services and logistics arrangements does not improve suppliers’ chances of winning a contract, they are unlikely to do it.

But that could be a mistake:

  • 65% of the companies in the chemical industry survey have turned away a potential provider because they were worried about upsetting sustainability-conscious customers
  • 58% have done this because of concerns that investors might look unfavourably at their company
  • 57% have at least once rejected a potential provider because of concerns about emissions trading system-related costs
  • 51% have done this because of emissions-related tariffs

The research also shows that when it comes to logistics in particular, procurement functions are occasionally getting tough on environmental issues: 31% have rejected an LSP that did not supply reliable emissions data, and 29% say they have done this more than once.

Tellingly, the companies within the chemical industry that are most likely to think about green criteria during the procurement process are the ones that are further ahead on implementation of their emissions reduction plans: 47% regularly consider logistics-related environmental concerns during their procurement processes, for instance, compared with just 33% across all the businesses we surveyed. 

Putting procurement decisions to work

To make a difference, procurement needs to be able to influence strategic decisions about the company’s climate strategy. Only 20% of businesses within the chemical industry say their procurement function is among the most impactful members of their sustainability committee (compared with 40% for legal and compliance and 34% for finance and accounting). Businesses need to find a way to bring procurement into the sustainability discussion.

And they should empower and incentivise procurement teams to take environmental considerations more seriously during their day-to-day purchasing. According to Ann Vereecke, a professor of operations and supply chain management at Vlerick Business School, this comes down to having the right incentives. “If you're the procurement person and you know that 10% of your bonus is related to sustainability and 30% is dependent on cost, the more ecological option may suffer,” she says. “You’ll make the trade-off.”

Procurement decisions: start with logistics and move on from there

Rebalancing those incentives will put the procurement team in a strong position to press suppliers on their environmental credentials. Logistics services providers will be a good place to start: the chemicals companies in the research attributed on average nearly a quarter of their scope 3 emissions to upstream logistics, transportation and storage activities.

So, tackling this source of emissions should be a priority for procurement. And by learning from their experience of working with logistics suppliers in this way, chemicals businesses will find it more straightforward to push others hard too.

For more information on this topic:

About FT Longitude

FT Longitude is a specialist thought leadership agency, owned by the Financial Times, working with a wide range of the world’s most prestigious B2B brands across Europe, the US and Asia-Pacific. FT Longitude’s 80+ clients are concentrated in the professional services, financial services, and technology sectors, but also stretch into energy, infrastructure, manufacturing and other industries. Headquartered in London, the company was founded in 2011 and was selected as one of Chief Marketer 200, Top Marketing Agencies of 2020, an Inc. 5000 Europe in 2018, an FT 1000 company in 2017, and a 2016 Leap 100 high growth UK company by City A.M. and Mishcon de Reya. It is led by founders Rob Mitchell (CEO), James Watson (COO) and Gareth Lofthouse (Chief Revenue Officer). For more information: visit longitude.ft.com.

整合示圖

取得產業內部人士的見解

進入我們真正整合物流的世界。按幾下滑鼠,即可取得有關見解的說明和知識。

您是否想隨時獲取未來產業趨勢的必修課?

透過在此表單註冊,您可直接在您的郵箱中接收我們的見解,踏入真正整合物流的世界。只要按幾下,您就可從我們為您量身訂製的文章中獲取靈感,並獲得相關業務見解。您可以隨時取消訂閱。

您完成了,歡迎訂閱!

您已成功訂閱我們的《物流觀點》(Logistics Insights)。我們會儘快向您發送確認電子郵件,並期待您隨時了解未來產業趨勢。

出現錯誤

抱歉!發生錯誤,我們無法取得您的資訊。請重試並重新提交您的資訊。若問題仍然存在, 請聯絡我們。

您是否想隨時獲取未來產業趨勢的必修課?

透過在此表單註冊,您可直接在您的郵箱中接收我們的見解,踏入真正整合物流的世界。只要按幾下,您就可從我們為您量身訂製的文章中獲取靈感,並獲得相關業務見解。您可以隨時取消訂閱。

請勾選上方的方塊,然後按「提交」。

填寫此表單即表示您同意並允許馬士基依據其隱私權通知所述使用您的個人資料。

隨時掌握最新資訊
註冊接收訊息和見解
透過直接收到馬士基電子報的寶貴供應鏈趨勢見解,保有領先地位

提交此表單表示本人同意經由電子郵件接收來自 A. P. 穆勒-馬士基及其附屬公司的物流最新消息和行銷新訊。我瞭解我可以透過點擊取消訂閱連結,隨時選擇退出接收此類馬士基通知。如需瞭解我們如何處理您的個人資料,請參閱我們的隱私權政策

感謝您註冊
您現在已註冊訂閱電子報。您很快就會收到一封電子郵件,說明如何設定您的電子報偏好。
已訂閱
您可以隨時取消訂閱。