Where’s the money and environmental impact in a supply chain?
Where would a company that wishes to improve its economic and environmental performance position itself in the supply chain? An intriguing analysis by Professor Roland Clift (University of Surrey, UK) at the inaugural conference of the Life Cycle of New Zealand (LCANZ) provides some answers.
CATALYST® consultant, Kimberly Robertson says one of the key messages of Professor Clift's presentation at the conference, held in May, was that primary resources are generally undervalued. Most of the environmental impact associated with products is due to resource extraction but very little of the economic value is gained at this stage.
This analysis of industry sectors and the relationship between environmental impact and added economic value along the supply chain is shown in the figure below.
Kimberly says most of the economic value is made later in the supply chain and at the retail stage.
"This type of relationship is particularly relevant in New Zealand where primary industries make a significant contribution to our economy.
"For instance increased mining, which is currently being discussed in New Zealand, is likely to have a large environmental impact disproportionate to the economic benefit; unless much of the downstream supply chain is captured by New Zealand companies," Kimberly says.
If you would like a copy of the full paper by Professor Clift please contact us here.
ACCUMULATION OF ECONOMIC VALUE AND ENVIRONMENTAL IMPACT ALONG THE SUPPLY CHAIN - MANUFACTURED PRODUCTS
1: Resource extraction
2: Processing & Refining
3: Manufacturing
4: Retail and distribution
Diagram Courtesy of: Clift, R., & Wright, L., (2000) Relationships between Environmental Impacts and Added Value along the Supply Chain. Technological Forecasting and Social Change, 65, pp.281-295