Seven ways supply chains are evolving to meet net zero goals
As businesses accelerate efforts to meet net zero targets, supply chains are emerging as key battlegrounds for decarbonisation. From supplier engagement and regenerative practices to smart logistics and sustainable packaging, supply chains are being reengineered to support climate goals. This article outlines seven major shifts driving that transformation.
1. Collaborating on Scope 3 emission reductions
Scope 3 emissions, which are indirect emissions across the value chain, make up the largest share of many companies’ carbon footprints. To address them, businesses are working more closely with suppliers, co-developing emissions targets and supporting transitions to lower carbon production methods. Procurement teams are integrating sustainability into sourcing decisions and offering incentives to partners that meet climate benchmarks. These efforts promote shared accountability and align emissions reduction across the full supply network.
2. Investing in insetting within the supply chain
Rather than purchasing offsets, companies are increasingly opting for insetting by implementing climate-positive projects directly within their supply chains. These initiatives include regenerative agriculture, agroforestry, and biodiversity restoration on supplier lands. Insetting not only helps reduce emissions at the source but also delivers co-benefits like improved soil health and water security. For companies with agricultural or raw material dependencies, this strategy offers a practical and verifiable path to emissions reductions.
3. Electrifying logistics and manufacturing operations
Electrification is transforming logistics and production by replacing fossil fuels with cleaner power sources. Manufacturers are shifting from gas to electric heating systems and reconfiguring operations to run on renewable energy. In logistics, electric vehicles and rail-based freight are being scaled to reduce emissions. These changes also provide energy flexibility, allowing companies to align operations with renewable energy availability and reduce dependence on fossil fuel-based grids.
4. Implementing circular economy and closed-loop systems
Many companies are redesigning supply chains around circular economy principles. Products are being built for reuse, remanufacture, or recycling, while materials are sourced with their end-of-life value in mind. Closed-loop systems, where recovered materials are fed back into production, reduce reliance on virgin resources and cut associated emissions. For example, electronics firms are certifying recycled plastics and metals for use in new products. Circular strategies are helping firms reduce waste while cutting embedded carbon.
5. Expanding carbon insetting in logistics networks
Logistics providers are offering new carbon insetting services that deliver measurable emissions savings for their customers. By integrating cleaner transport modes, electrified infrastructure, and smarter route optimization, these providers help clients meet climate goals through direct action. Some operations have significantly increased the carbon savings per shipment by shifting to electric container handling and using renewable energy. As businesses demand more detailed emissions data, insetting is becoming a valued differentiator.
6. Empowering SMEs with tools and data platforms
Small and medium-sized enterprises play a crucial role in global supply chains but often lack resources to track or reduce emissions. New toolkits and digital platforms are helping bridge that gap. These resources simplify carbon accounting and offer tailored guidance for emission reduction planning. Some organizations also provide access to green finance or technical support, enabling smaller suppliers to align with corporate climate targets and stay competitive in decarbonising markets.
7. Optimizing sustainable packaging and transport efficiency
Sustainable packaging is reducing emissions by cutting material use, switching to renewable inputs, and improving product-to-package ratios. This enhances logistics efficiency by allowing more units per shipment and reducing fuel consumption. Companies are adopting lightweight designs and recyclable materials to cut carbon footprints from end to end. Efficient packaging also reduces waste, improves storage, and can lower overall shipping costs, making it a key focus area for greener supply chains.
The road to resilient and responsible supply chains
Supply chains are no longer secondary to sustainability. They are central to it. As the race to net zero intensifies, companies are making supply chain strategies smarter, cleaner, and more integrated. These seven changes reflect a broader shift from fragmented compliance to embedded climate leadership. The businesses that succeed will be those that future-proof their supply chains through innovation, transparency, and accountability.