Relevance of supply chains in the incidence of wildfires – Part 1

Recent natural disasters have taken towns, cities, and countries off-guard. The magnitude of the aftermaths and damages that they leave may last for unaccountable years. When is is true that short term-emergency strategies are needed to solve them out, there is also the need to think on the medium term on how to reduce future incidences, specifically with wildfires.

Wildfires by themselves are a natural reaction of the ecosystem to create a balance between the litter stored and it’s path back to the soil – forest floor – creating a dynamic balance between wildfires and ecosystem growth (Nature Geoscience, 2019). Nevertheless, in the past years the balance has been disrupted and among many other reasons, deforestation can be mentioned as a key driver.

In this article supply chains will be analyzed to understand their impact in the ecosystem and proposed measures to reduce their effect. For that matter, this topic will be divided in three parts to better address ideas, effects and reports specialized in the matter.


Deforestation – Immediate facts & effects

Unfortunately, in recent months wildfires across the globe have been consuming thousands of acres and claiming millions of lives. Being without hesitation the most relevant in recent times the succession of wildfires in the Amazons (Stewart, M., 2019) and the on-going ones in Australia (Chappel, B., 2020).

If worldwide efforts will be needed just to put off the wildfires, it is also true that something must be done to stop the same catastrophe(s) to happen again. In this context, deforestation works as a negative -and possibly main- feedback, reason why special efforts must be done to understand better the root cause of it and sub-sequential efforts to stop it.

To give an impression of how much wildfires have increased in size and number, raising them to be one of the most unexpected new concerns and effects in coming years, the platform Global Forest Watch (GFW) counted more than 400,000 in 2019 compared to 2018.

It is a proven fact that an increase in deforestation leads to an increase in climate change, which in-hand increase the chance of dry-outs in tropical zones with big amounts of fertile soil for wildfires. (Schauenberg, T., 2020) and (Pachamana Alliance, 2019)

From a different perspective, we do have an snapshot of how much we as human race are devastating the global fauna: “Between 1990 and 2016 the world lost 502,000 square miles (1.3 million square kilometers) of forest, according to the World Bank—an area larger than South Africa. Since humans started cutting down forests, 46 percent of trees have been felled, according to a 2015 study in the journal Nature. About 17 percent of the Amazonian rain-forest has been destroyed over the past 50 years, and losses recently have been on the rise” (Nunez, C. 2019).


Supply chains and their impact in the environment

Nowadays with the sustainability on the rise of relevant topics, the tendency to hear that the companies are “carbon neutral”, “energy efficient” and/ or “social responsible” are being commonly heard. In this specific area of knowledge and definitions is where this entry intends to make an stand.

Based on the Bové, A. & Swartz, S. (2016) article titled: Starting at the source: Sustainability in supply chains, over 90% of the natural capital impact (E.g.; Affecting air, soil and land) from companies in the food & beverage industry, personal and household goods and retail, comes from the supply chains and not from their direct impact, E.g.; Headquarters or employees consumption.

Weather it is true that all industries across all their supply chains should be held accountable, it is also truth that we are already seeing some effects of miss-use of our natural resources, E.g.; A rise in the number of wildfires worldwide and recent floods and tropical huracans in Spain… is not a shere coincidence. For that reason makes sense to make an effort to analyse the industries that generate a bigger impact within the context of land and water use.

Important note: This should not strike right away as a “good or bad” co-relation. These numbers should make it only clear to the audience to understand where the businesses should be held specially accountable for and where “us”, as final consumers, should pay more attention to certifications and public releases from the companies.


Specific case: Germany

In 2017, adelphi in collaboration with Systain and supported by the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety released a report titled: Atlas on environmental Impacts Supply Chains which condensed the effects of several industries in Germany (Electronics, Machinery, Automotive, Food retailing, Fashion, Paper, Metal and Chemistry) into four main categories: Greenhouse gases, Air pollution, Water consumption, and Land use.

The relevance of this report lies, if not in the specificity of the industries, in the baseline that Germany can serve for. Now we have a glimpse to understand the effect of supply chains in the environment and some numbers that give a solid idea of environmental impact per EUR of turnover, below the table.

Directly taken from: Atlas on environmental Impacts Supply Chains (adelphi, Systain, and Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (2017). Page 10.

On a first glimpse is notorious that some “red lights” have been identified throughout the spectrum, however, for the scope of this publication, the emphasis will be made in the “Land use” – Deforestation – impact generated by (1) Food retailing sector and (2) Fashion Retailing sector which seem to be the most impactful – In that order.

Glimpse of the impact along the supply chain – Food retailing

If previously the McKinsey report mentioned how much of the impact was generated in percentage (%) in the supply chain compared to the in-site operations of a given company, this new report from adelphi, Systain and the Federal Ministry for the Environment, nature conservation, building a nuclear safety (2017) provides a deeper insight across different levels of the supply chain.

From the same report, a huge difference is noticed in the percentages of how the industry impacts on the environment across the supply chain

From the same report, a huge difference is noticed in the percentages of how the industry impacts on the environment across different levels in the supply chain. Relevant at this point is to notice that over 75% of the impact to the land is done in the resource extraction at the very beginning of the production process and 0% is relatively done by the company itself.

How sustainable are the companies that claim to be sustainable? Are they being green in that 0% that they directly impact or are they supporting the resource extraction suppliers to reduce their impact?

Being sustainable is giving back what you take… It does not mean, in any form, “Don’t consume”


References

Stewart, M. (2019, Nov 27) An Analysis of Amazonian Forest Fires – How does a wildfire start in a rainforest? [Blog post]. Retrieved from: https://towardsdatascience.com/an-analysis-of-amazonian-forest-fires-8facca63ba69

Chappel, B. (2020, January 6) Australia Wildfires Have Claimed 25 Lives And Will Burn For Months, Officials Say. Retrieved from: https://www.npr.org/2020/01/06/793931658/australia-wildfires-have-claimed-25-lives-and-will-burn-for-months-officials-say

Schauenberg, T. (2020, 8 January) Wildfires: Climate change and deforestation increase the global risk. Retrieved from: https://www.dw.com/en/wildfires-climate-change-and-deforestation-increase-the-global-risk/a-51928388

Pachamana Alliance (2019) Effects of Deforestation. Retrieved from: https://www.pachamama.org/effects-of-deforestation

Nunez, C. (2019) Deforestation Explained. Retrieved from: https://www.nationalgeographic.com/environment/global-warming/deforestation/

Bové, A. & Swartz, S. (2016) Starting at the source: Sustainability in supply chains. Retrieved from: https://www.mckinsey.com/business-functions/sustainability/our-insights/starting-at-the-source-sustainability-in-supply-chains

Systain & adelphi (2017) Atlas on environmental impacts – supply chains. Retrieved from: https://www.adelphi.de/en/system/files/mediathek/bilder/Atlas%20on%20Environmental%20Impacts%20Supply%20Chains%20-%20adelphi%20Systain.pdf

Nature Geoscience (2019) The complexities of wildfires. Retrieved from: https://www.nature.com/articles/s41561-019-0311-0

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