July 28, 2008 - Though many opportunities to cut climate emissions in the supply chain either cost little or pay for themselves over time, most companies still don't factor emissions reduction into purchasing decisions, according to new research published in McKinsey Quartlerly.

The survey of more than 2,000 global executives finds that while nearly half of respondents say that climate change is a "somewhat" or "very important" issue to consider in supply chain management, less than a quarter actually take climate change into consideration when making purchasing decisions.

"They may be missing an opportunity," the study's authors note. "Our analysis suggests that for consumer goods makers, high-tech players, and other manufacturers, between 40% and 60% of a company’s carbon footprint resides upstream in its supply chain—from raw materials, transport, and packaging to the energy consumed in manufacturing processes. For retailers, the figure can be 80%."

This despite the fact that many low-carbon supply chain solutions pay for themselves over time through greater efficiencies in fuel or materials use, according to the report.

Some forward-thinking companies, however, are learning to work with suppliers to reduce their carbon footprint upstream, sharing best practices in energy efficiency, manufacturing, and R&D. (Nike is a good example of this approach.)

Another recent study, however, paints a different picture: Many companies are simply passing the up-front costs of greener logistics to their suppliers.