Richard Edwards

Asia’s traditional sourcing hotspots need to take a more proactive approach to the management of climate change – particularly after the change of leadership in the U.S. 
 
Speaking at a sustainability conference in Singapore, Simon Tay, Schwartz Fellow of the Asia Society, warned that failure to do so could result in countries such as Vietnam having policies dictated to them by the world’s most powerful nations.
 
His warning comes in a year that will see industrialised nations attempt to garner support for a wider agreement on climate change that will usurp the Kyoto Protocol, which is expected to be sealed in Copenhagen in December.
 
Mr Tay, who is also the chairman of the Singapore Institute of International Affairs, however, believes that Asia is still lagging behind when it comes to climate change.
 
“My impression is that it has become a dialogue between the deaf and the dumb,” said Tay. “When we look at the Kyoto regime it cannot seem to work just because it is limited to only Annex 1 developed countries. “Unless Asia gets its act together and starts changing the game we will be dictated to by the developed countries once America comes on board.”
 
One of the initiatives discussed at the conference was the potential introduction of a global cap-and-trade scheme for carbon emissions based on per-capita pollution, although Tay questioned the viability of such a system.
 
“Asia has been a vast production base for a lot of consumption elsewhere,” he said. “In that equation, who is the polluter?”
 
He also argued that some of Asia’s biggest producers should avoid using climate change as the “great validator” for protectionist measures during the global economic slowdown, citing the possible example of a country with a carbon tax regime for its manufacturers imposing import tariffs on one that had no such regime in place. 

Alexandra Cain

The logistics industry offers an excellent hunting ground for environmental improvements, with two of the world’s largest players involved in innovative sustainability projects.

DHL, the world’s largest logistics company, is spearheading a sustainable supply chain approach and has made a commitment to reduce its carbon footprint by 10% by 2012 and 30% by 2020. Some of the early initiatives DHL has embarked on include using recycled paper and packaging and local education campaigns to reduce energy and water use.

But this is really only the tip of the iceberg for DHL, which is looking at replacing aircraft and vehicles as part of its sustainability push.

Flight of fancy

Paul Graham, CEO of DHL Exel Supply Chain, Asia Pacific, said that upgrading aircraft and fleet shows a benefit in terms of cost savings, “which is important because we’re spending a lot on sustainability.”

Cost savings stem from fuel savings by using more fuel-efficient planes and lorries, although Graham acknowledges DHL’s sustainability program is a long-term commitment, with the company having had to invest hundreds of millions of euros upgrading its fleet.

Other sustainable initiatives by DHL include better management of energy usage and better water recycling, including increased use of grey water. It is also looking at replacing old air conditioning systems for far more efficient replacements.

In Asia, DHL is looking at installing solar panels on some building rooftops and in Europe, it’s exploring whether small windmill generators might be an appropriate energy source.

“Nothing’s off the table, we’re still at an embryonic stage in terms of our sustainable development,” Graham said.

DHL has operations in India, China and Indonesia which have relatively less robust country supply chains compared with more developed nations. “That’s where the sustainability model has less relevance,” said Graham. “These countries need more water and power, not to use less. But there are still things that can be done in developing markets and creating awareness of sustainability is a positive outcome.

The company is also setting up systems to measure sustainability data, with country-level data being fed back into a centralised repository for further analysis. Best practice local programs can then be established.

Blaze a trailer

Julie Gaskell, head of communication at transport and logistics behemoth Stobart Group, says the company is working hard to increase its sustainability push. An important project is a plan to increase the length of its trailers by one metre, allowing trailers to carry larger loads to increase efficiencies within its fleet.

“That has the potential to save three million litres of fuel a year from UK roads,” said Gaskell.

Another initiative was the introduction of a traffic light system to indicate whether lorries are fully loaded. The company has also invested in rail freight and its first service, launched in 2006 between Daventry and Scotland, is the equivalent of taking 30 lorries off the road each day, saving around 2.4 million litres of fuel a year.

Anne-Marie Saulnier at environmental management consultancy Optim Resources acknowledged that most logistics companies are still in the early stages of sustainable development.

“Sustainability is still in the process of being integrated into purchasing functions,” she said “At the moment, sustainable practices are parallel to traditional practices and politics. There is no integration. At the purchasers’ level, there is a real interest, but there is a lack of tools and models to help them to act,” she said.