July 25, 2008 - The majority of companies seeking to green their supply chains are more than happy to pass the costs upstream, according to a new report.

New research by Transport Intelligence and Kewill, a software and logistics company, finds that three-quarters of U.K. companies include environmental compliance clauses in their supplier contracts. Yet most (54%) fail to make provisions for any extra costs logistics companies may incur in improving their environmental performance.

Despite companies' reluctance to help foot the bill for greener transport, 70% see environmental compliance as "important" or "very important." The reason? Most expect to enjoy cost savings from implementing energy efficiencies upstream.

"The business case for implementing environmental initiatives cannot be doubted due to the cost savings they bring, especially when they offset the rising cost of oil," says John Manners-Bell, CEO of Transport Intelligence.

Logistics managers aren't alone in seeking to pass green costs upstream. Retail giant Wal-Mart, which last year pledged to stock only concentrated laundry detergent on store shelves, forced suppliers to pick up the tab for product reformulation and repackaging.