Supply Chain, Distribution, and ESG
Addressing sustainability in distribution has never been more critical. In fact, the U.S. Environmental Protection Agency found that packaging and containers comprise over 28% of all municipal waste produced in the U.S. At Keter, our expertise lies in waste and recycling management. We have a vast network of third-party vendors with a wide range of waste and recycling services. We help companies find the right solutions for their unique needs and create the reports necessary to follow regulations and maintain compliance. Keter can help distribution companies understand ESG, how it impacts the supply chain, and how you can start addressing sustainability in your facility.
Transform Your Waste Program with Keter’s Tailored Services
ESG is an acronym that stands for Environmental, Social, and Governance. These three categories help businesses identify areas to improve to become more sustainable. To address sustainability, companies assess their current efforts in each category and look for opportunities to improve performance.
How Distribution Companies Can Become More Sustainable
Distribution companies who want to become more sustainable can evaluate the following areas:
- Environmental: Waste and recycling, effects on carbon footprint, energy consumption, and use of clean energy
- Social: Human rights and labor across the entire supply chain, employee safety, health, and wellness, and diversity, equity, and inclusion
- Governance: Diversity and inclusion across the leadership board, corporate corruption, and shareholder rights
Across the supply chain, ways to infuse ESG in a company include responsible raw material usage and processed material production and consumption, adequate working conditions, sanitation, and clean water and energy.
Sustainability in the distribution industry requires collective effort and collaboration throughout the supply chain. At Keter, we help distribution companies connect with suitable waste and recycling vendors for their unique needs. We then help report on the successes of their sustainability endeavors.
Green Distribution: Empowering Suppliers and ESG Initiatives
At Keter, we recognize the significant impact that green distribution practices can have on suppliers' sustainability efforts. According to Agility, green distribution improves sustainability initiatives and enhances business efficiency in the following ways:
- Enhanced service: Streamlining operations to reduce energy use often leads to cost savings, of which customers would happily reap the benefits. Customers care about the sustainability of the products they purchase—when they buy sustainable products, it feels like they are helping the environment. For example, switching to recyclable and biodegradable packaging reduces waste and helps customers feel good about ordering from your brand, making them more likely to choose it repeatedly.
- Improved risk management: Reduced waste and carbon benefits your employees' health and the facility's environment. Companies that create excessive waste and don’t address other sustainability measures risk taking a hit to their reputation.
- Increased efficiency: Finding ways to save gas and prevent energy waste, such as efficiently packing transportation containers and vehicles, is a plus for businesses and the environment.
- Reduced costs: Small changes like turning out the lights when not in use can make an impact over time—less energy consumption means improved revenue.
- Competitive advantages: Green practices are best for the planet, employees, and our communities. Choosing recycled materials and responsible energy and water consumption means your company can sustainably operate now and in the future. Competitors who don’t choose sustainable business practices will face fines, regulatory challenges, and consumers switching to other brands.
Sustainable distribution that enhances efficiency across the supply chain can lead to savings for your company, vendors, and customers.
Just-in-time delivery is an inventory management system meant to eliminate the creation of excessive products sitting in storage by focusing on product creation as items are needed. Manufacturers using the just-in-time delivery model will wait until an order comes through before they produce the products and eliminate the need for warehousing.
ESG-Compliant Product Management and Shipping
Transportation of products typically has the highest impact on the environment of all supply chain operations. Gasoline and diesel emit CO2, the primary cause of global warming, and shipping by plane or sea also causes environmental harm. To optimize your ESG initiatives across your shipments, consider using trucks that run on alternative fuels or electricity and always consolidate your packaging to ensure the least number of shipments are required.
Sustainable Warehousing Practices
Warehouses are expensive to heat and cool. In turn, heating and cooling cause CO2 emissions, and when warehouses are drafty or larger than necessary, more CO2 emissions result. And if your warehouses are few and far between, longer transportation routes to end users will be necessary—and emissions increase accordingly.
Overhauling a building can be expensive initially, but making sustainable changes will reduce your carbon footprint and operational expenses. The best place to begin is with how you power your warehouse. Installing solar panels on the roof or painting the roof a reflective color reduces air conditioning use. Other alternative energy sources like hydro and wind power reduce fossil fuel use. If you’re considering building a new warehouse, many sustainable options are available, such as architecture designed to reduce space and enhance natural light.
If you rely on a third party for your warehousing, select a partner with warehouse locations across the country close to shipping ports, airports, and urban areas to maximize transportation efficiency.
Waste Streams Around Packaging for Supply Chains
As a civilization, we’re collectively distancing ourselves from the linear consumption economy, or “take-make-waste” model, where packaging is excessive and thrown away at landfills. We’re moving towards a circular economy, where packaging is reduced, made from recycled materials, and/or can be reused or recycled by the consumer. A circular economy seeks to sustainably prevent waste from occurring and sources raw materials without changing natural or human ecosystems. At Keter, we connect distribution companies with waste and recycling vendors that offer the best value for their needs. Set up a free demo if you’re looking for help finding the right vendors for your company.
Getting Rid of Protective Foam
Using sustainable packaging materials is more than just avoiding excessive waste; it’s about the environmental effects of material sourcing, creation, transportation, and discard of waste. Packing peanuts (polystyrene foam) are especially damaging since they are toxic to fish and wildlife, difficult to recycle, and not biodegradable. The creation process for these packaging materials also uses nonrenewable resources, like plastic. Luckily, there are alternatives available.
Sustainable packaging is made from recycled or recyclable materials, like cardboard bubble wrap alternatives, and biodegradable packaging, such as cornstarch or compostable mushroom packaging from agricultural waste. Air pillows are another option as they significantly minimize the material needed by keeping package contents safe and mainly using air.
Wrapping and Padding Plastic Disposal
For non-recyclable materials like bubble wrap and packing peanuts that infiltrate your facility from other vendors, a recycling program at your facility can help repurpose this waste. Your facility can reuse it or be given to other companies with recycling programs, such as your local grocery store or FedEx.
Handling Cardboard Waste
Cardboard is among the most sustainable shipping materials since it’s a renewable, biodegradable, and recyclable raw material. Additionally, its production is non-toxic and leaves a small carbon footprint. When recycling cardboard, breaking your boxes down will take up less space, require less frequent pickups, and lower your recycling fees. Just cut the packing tape and flatten the box to break a box down efficiently.
Wood pallets can be reused, recycled, and even sold. If you choose softwood pallets, they weigh less and are typically less expensive compared to hardwood pallets.
Damaged and Returned Goods
Returning damaged goods is antithetical to sustainability, but shippers often expect damaged goods to be returned, or they risk customers abusing the return system. With the increase in online shopping, the number of ship-returned goods has also increased, and it now requires additional resources for returned goods.
ESG Supply Chain Risks
A lack of adequate planning for ESG initiatives within the supply chain comes with several risks, including the following:
Can't Stop Shipping
While ESG initiatives are important, shipments must continue as the priority for your company to survive. Sustainability goals must be appropriate to the individual facility and effectively integrated so that production is not impeded. Companies that don’t have the internal resources to manage their ESG initiatives on their own can enlist the help of other companies to manage their ESG goals.
Keter’s distribution services include full waste and recycling solutions that allow companies to focus on what they do best—distribution.
Waste Cannot Pile Up
Poor waste management is both an environmental and social risk. Since a waste pile-up would present health and safety concerns inside any facility, distribution companies must anticipate their waste accurately and ensure it is recycled, reused, or disposed of promptly. This process requires data-driven waste management decisions through accurate data collection and prediction—two functions of our waste management software.
Adequate waste management requires many moving parts that take time and resources away from your business operations. Distribution companies facing budget cuts or worker shortages may need more resources to take on sustainability initiatives. Companies with a booming business need more experience in knowing what to implement and what could be holding them back. By working with a third-party ESG management and reporting provider like Keter, you can ensure your company's operational efficiency and sustainability goals are met.