July 3, 2023, is the “warmest global average temperature” day since records began in 1979. One month after breaking the high temperature record, the “Earth Ecological Overload Day” came on August 2, which means that by this day, human activities have used up the total amount of renewable natural resources on the Earth this year, entering the ecological deficit state. The emission of carbon dioxide and other greenhouse gases is the main cause of global warming, and it is urgent for industry to reduce carbon.

Zhang Kaipeng

Senior Vice President, Schneider Electric

Head of global Supply Chain China

The carbon footprint of enterprises not only exists in themselves, but also in the upstream and downstream supply chains. The Centre for Global Environmental Information Research (CDP) estimates that, on average, supply chains emit more than five times as much carbon as companies do directly. In the case of Schneider Electric, carbon emissions from its own factories account for only 10% of the total supply chain, while 90% of carbon emissions come from upstream and downstream. Therefore, to accelerate industrial carbon reduction, supply chain coordination is the key.

Through in-depth interviews with supply chain managers of a number of industry leaders, this paper objectively and comprehensively presents the current situation, challenges and transformation direction of supply chain management in Chinese enterprises.

It is difficult for upstream and downstream enterprises to transform

It is the biggest challenge to reduce carbon in the supply chain

From the expansion of a single enterprise to the overall carbon reduction of the supply chain, the biggest challenge is that there are a large number of upstream and downstream enterprises, and they are generally facing various difficulties from the concept to the landing of low-carbon transformation.

Awareness of carbon reduction still needs to be raised

Most of the upstream suppliers of the supply chain are small and medium-sized enterprises, and their awareness and willingness to act on green and low-carbon are generally low. According to the Schneider Electric Institute for Business Value survey, 43% of companies surveyed are concerned that the return on investment in carbon reduction will not be as expected.

Lack of practical experience

For the first time, many enterprises face the topic of carbon reduction, do not know where to start, unable to develop a scientific, clear, executable carbon reduction roadmap, only 19% of the surveyed enterprises have identified a clear carbon reduction plan.

Lack of technical level

There is not enough technology to support carbon reduction, and nearly 60% of the surveyed enterprises said that there is an urgent need to improve process carbon reduction and new energy technologies.

Lack of internal and external resources

Investment in carbon reduction funds and talent is limited, and 65% of respondents said that business pressures do have an impact on their companies’ carbon reduction efforts