IMPACT OF GHG EMISSIONS AND CLIMATE CHANGE ON ORGANIZATION'S SUPPLY CHAINS

IMPACT OF GHG EMISSIONS AND CLIMATE CHANGE ON ORGANIZATION'S SUPPLY CHAINS
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Introduction
There is a universal consensus that the earth is warming, and the increase in temperature is primarily caused by the emission of greenhouse gases (GHG) in the atmosphere. In the business environment, it is acknowledged that the regularity and dangerousness of climate change can cause disruptions in organizations' supply chains, thus raising costs and decreasing revenues. Such disruptions have already been felt across all five continents through flooding and reduced water levels in oceans and rivers. However, companies, especially those operating in the fuel industry, have discredited scientific data on GHG and even funded counter studies. Nevertheless, some organizations have addressed the problem of GHG emission by adopting Climate Action Plans and carbon pricing strategies. Despite these strategies being helpful in the reduction of GHG emissions, they do not reflect the damage caused by business organizations on the climate. Therefore, employee optimization, strengthening of supply chains rather than focusing on efficiency, and requiring large organizations to invest heavily in green energy are recommended as more appropriate actions. This paper examines how GHG emission impacts global supply chains, how companies have addressed GHG emission, and the challenges that organizations face while responding to climate change.
Economic production at the global stage is structured around a multifaceted system of co-dependent supply chains. Over time, supply chains around the world have been polished to support the trade of goods worth more than $20 trillion each year (Lehmacher 2017). These supply chains and other systems that enhance their performance work better in stable climatic conditions. Therefore, any changes to normal climatic patterns amplify the probability of the occurrence of activities that are more extreme and severe than what established supply chains can handle.
Unfortunately, since the era of the Industrial Revolution, the emission of greenhouse gases, especially carbon dioxide, has increased by approximately 43% (Vitousek et al., 2015). During this era, industrial processes in developed nations emitted much of the greenhouse gases from cement production, extraction of fossil fuels, and natural gas. However, since 2018, the transportation sector has been emitting 28% of the total greenhouse gas emissions, which is the largest among all industries (the United States Environmental Protection Agency n.d). The emission of GHG in the transportation sector comes from fuel used in planes, trucks, cars, ships, and trains, which are essential in moving final products, services, and raw materials around the world.
The impact of greenhouse gases and climate change on organizational supply chains has already been felt by companies. For instance, in Europe, transport on the Rhine in the third quarter of 2018 was down by 27% due to low water levels that were caused by drought. This resulted in a 10 percent drop in Germany's production of chemicals and pharmaceuticals because companies were unable to secure raw m...