By Claire Bull
For years, businesses have treated sustainability as something that could wait. However, that mindset is now colliding with reality. Sustainability is no longer a distant goal. It is here, it is urgent and it is reshaping how we operate.
After more than two decades working across packaging, recycling and supply chains, I believe this shift represents the most significant transformation since the Industrial Revolution.
The measurement, reporting and reduction of carbon emissions is changing the rules of business. And because more than 70 percent of emissions typically sit in supply chains, this is where the pressure and the opportunity are greatest.
The business case is already here
Carbon is not just an environmental concern. It has become a cost, a risk and increasingly, a source of competitive advantage.
Around the world, businesses are already winning or losing contracts based on emissions transparency. In Europe, a large logistics provider lost a $50 million contract when it was unable to provide carbon data. Its competitor, which was able to, won the deal.
In Brazil, a major pharmaceutical company introduced ESG-based supplier criteria. Any third-party logistics providers unable to demonstrate carbon data were excluded from consideration.
Australia is following suit. From January 2025, mandatory climate disclosures began rolling out. Large companies, initially ASX100, then progressively smaller cohorts, must report their climate risks and strategies alongside financial results. Even if their business isn’t directly reporting yet, their customers might be. That means suppliers will be asked to provide their own emissions data, ready or not.
Carbon as the new KPI
Traditionally, supply chains have been measured on cost, speed and service. Carbon is fast becoming the fourth KPI. Far from being a cost burden, it often drives efficiency gains.
A case in point is Maersk, which invested in low-carbon fuels and vessel tracking, cutting emissions by 46 percent per container while optimising global fuel use.
Similarly, Unilever introduced motion sensors and LED lighting in its warehouses in Asia. This reduced power consumption by up to 90 percent and significantly lowered costs, boosted efficiency and delivered sustainability outcomes.
Automation and sustainability: A powerful pairing
Technology and automation are amplifying this shift. AI routing is optimising freight and inventory flows, reducing travel distance and emissions. IoT monitors are pinpointing inefficiencies such as leaks and energy loss.
Robotics, increasingly powered by renewable energy, can be scheduled for non-peak hours to minimise cost and environmental impact. When deployed thoughtfully, automation not only streamlines operations but also supports carbon reduction. Sustainability and efficiency are not trade-offs. They are partners.
A roadmap for action
The challenge many leaders face is not whether to act, but how. I recommend a straightforward three-step approach:
1. Measure – Conduct a gap analysis to understand your emissions baseline. You can’t manage what you can’t measure.
2. Model – Simulate different scenarios, from new transport modes to facility upgrades, to see where carbon reductions and operational gains overlap.
3. Mobilise – Embed those strategies across your supply chain. Make carbon reduction part of how your business, and your partners, measure success. This process turns compliance into an opportunity. It shifts sustainability from a side conversation to a driver of business performance.
The next evolution of lean
Lean thinking taught us to remove waste and improve flow. Carbon-smart thinking is the next step in that evolution. Supply chains that measure, model and mobilise around emissions will not only stay compliant, but also secure contracts, unlock efficiencies and future-proof their operations.
Sustainability is no longer optional. It is the next competitive advantage. For leaders willing to act now, the reward is not just resilience, but relevance in a rapidly changing market.
Claire Bull is the director of sustainability and innovation at Extolla.
This article first appeared in the October edition of FM magazine. To download the entire edition for free, click here.
