Being a good citizen, improving the environmental impact and engaging with our society is now a necessity for any company, especially when it is a company with a global reach. It is a necessity because the procurement rules change, international regulations impose certifications and our current and future employees are demanding it. The internationalization of activities complicates sustainability scores and responsible development as the company has to deal with production, transport, storage and sales in different parts of the world. Fortunately, there are various solutions that can be set up to limit the environmental impact of your company.
In this article, we would like to outline several impactful solutions beneficial in many aspects for your business development abroad.
Optimize transportation and warehousing
The internationalisation of a company often means exporting and therefore storing and sending goods all over the world. This has a direct impact on your company’s carbon emissions. Controlling emissions from the transport and storage of your goods should be a priority in your company’s environmental strategy.
To reduce your carbon emission, you can start with the design or choice of the warehouse in which you will store your goods. Its location, the materials used for its construction and also the use of green energy are all elements to be put in place to benefit from an eco-responsible warehouse.
For companies that own their warehouses, there are several green energy solutions to limit the environmental impact of storage. Solar energy is often used because it is quite simple to equip warehouses with solar panels. These installations allow you to make significant savings. Even if the initial cost of installing a solar panel is a huge investment, you will have a lot of savings from electricity bills. Also, The installation of low-energy light bulbs is not insignificant. Fluorescent bulbs consume electricity quickly, whereas light-emitting diode (LED) bulbs use up to 75% less electricity.
Some companies work hard in this area. For example, l’Oréal USA, the group’s largest subsidiary, declared to achieve carbon neutrality by 2021 at its 25 production, distribution and administrative sites. To achieve this, significant measures have been put in place to reduce energy consumption and use renewable energy sources, including the installation of solar panels and the use of natural gas.
For companies that use external logistics providers for the storage of their goods, many of them offer eco-responsible warehouse storage. More and more logistics companies are investing in the construction of environmentally friendly warehouses.
When you expand internationally, transport has a direct impact on the greenhouse gas emissions associated with your business. Transport can be present at different stages of the manufacturing and sales of your products. Indeed, transportation should be optimized to reduce your export company’s carbon footprint. Using more fuel-efficient cars, grouping cargo, and taking into account different modes of transportation like rail or sea can all contribute to this. It is therefore important to look at the entire transport chain and not just the last mile to reach your customer.
The use of a rail or waterway mode of transport has to be preferred. These modes of transport emit less than road and air transport. Combined transport, rail-road, can also reduce the number of trucks. It is also a way to optimize road routes and avoid empty returns by using reverse logistics. Nestlé, through its new multimodal platform north of Arles, has chosen to develop multimodal transport, allowing the transfer of approximately 15,000 trucks per year.
You can also provide solutions to the problem of the last mile, which, in addition to being particularly expensive, generates significant carbon emissions. This is particularly the case when the parcel cannot be delivered to the recipient and must be re-delivered in the following days. There is a solution: delivery at a relay point, which is increasingly developed and which should become even more democratic.
For smaller companies and exporters, we do consider that a discussion should be engaged with the freight forwarders and engage their responsibilities in providing sustainable solutions at affordable prices with appropriate labeling.
Digital tools can be a real asset to your business in terms of reducing emissions as you internationalise. These tools can help you from manufacturing to warehousing and marketing.
In your warehouse, the use of advanced software and technologies such as WMS (Warehouse Management System) can help reduce emissions. These management systems give you the opportunity to build a more sustainable logistics system and eliminate energy-intensive trips and tasks from its management. There are also tools to manage your transport chain more efficiently, such as the TMS (Transport Management System). It can allow you to reduce fuel consumption by optimising delivery rounds.
When your business grows nationally or internationally, it is increasingly common for employees to travel to meet customers. It is important to involve your employees in the choice of the transport mode used, giving priority to the train. In addition, videoconferencing has developed in recent years thanks to new technologies, most recently with the Covid 19 pandemic. These tools should be used as a priority during professional meetings in order to limit travel. It also allows you to save time between your various meetings.
Finally, despite the development of digital technology, many businesses continue to utilize excessive amounts of paper. Use technology to avoid paper whenever possible in the workplace, which now includes computers, smartphones, and other gadgets.
However, data centres are huge emitters of CO2. Online services, mobile devices and the proliferation of technological devices create billions of data. This data has to be stored in data centers, which are highly polluting infrastructures due to their energy consumption. It is important to be aware of this and use digital technology responsibly by not storing too much data. There are a number of tricks you can use to reduce your digital footprint. A good start is to engage your employees in regular sorting of their mailboxes as well as files stored on the cloud or drive. On a company level, it is possible to use green web hosting for your company’s website. For example GreenGeeks buys wind energy credits to replace the energy used by their servers.
Implement sustainable sourcing
By implementing sustainable sourcing companies purchase the materials they need for their business with the aim of reducing their environmental impact. It is important to keep in mind that there are several scopes related to your company’s carbon emissions. Scope 1 covers greenhouse gas emissions directly related to the manufacture of the product. Scope 3 includes all other greenhouse gas emissions that are not directly linked to the manufacture of the product, but to other stages of the product’s life cycle, such as procurement.
During your internationalisation, in order to limit the carbon footprint, it must also aim to become more responsible for Scope 3 emissions. To do this, it is necessary to implement a responsible supply chain.
A sustainable procurement strategy cannot be developed without the involvement of all stakeholders. It is therefore necessary to define a sustainable policy including the measures to be implemented to reduce emissions with its teams. The aim is to specify the company’s procurement criteria to them. Criteria such as favouring short circuits or sustainable suppliers. These are suppliers who promote sustainable development policies in the course of their business.
It is also advisable to favour the use of recycled resources. Indeed, the use of recycled raw materials makes it possible to avoid new extractions and to limit the pollution generated by this practice. This contributes to developing a circular economy by using materials to give them a second life.
How sustainability can benefit your export business
Improved brand reputation
Today’s customers and employees are more and more concerned about the planet and being an ecologically conscious company can boost your brand’s recognition. This is particularly the case for the developed economies. By demonstrating that you are committed to environmental initiatives, you can attract the attention of the media and influencers, which means increased awareness and credibility with customers. You build customer loyalty and attract new customers. By highlighting your commitment to environmental protection, you create a community of like-minded customers who are more likely to buy from you or recommend your products instead of going to your competitors.
Access new markets
Your export business may benefit from new market opportunities if you adopt sustainable practices. Indeed, some countries have more or less stringent restrictions regarding environmental protection. Being ecologically responsible will open up more markets for you on the international scene. Apart from regulatory barriers, the inhabitants of these countries may have more or less strong consumer preferences for responsible purchasing.
Improved efficiency gains
Sustainable methods sometimes permit a focus on process optimization and which can increase productivity and efficiency in export business. Several studies show a correlation between the CSR approaches implemented by companies and their economic performance. According to France Stratégie, entities that integrate environmental, social and governance criteria have increased their performance on average by 13%.
Compliance with regulations
It’s important to highlight that corporate social responsibility is not governed by any “international law”. Each country can regulate it as it sees fit according to its local issues and realities. When you expand into international markets, companies have to deal with environmental regulations and restrictions that vary from country to country. Your export business may assure compliance and stay out of trouble by implementing sustainable practices.
Using sustainable practices can save money because they use less energy and resources, are more effective, and produce less waste. For example, reducing water or energy consumption can result in financial savings for the company. The same applies to the storage of goods: low-energy warehouses equipped with solar panels will allow you to make considerable savings. As far as transport is concerned, sending goods by land instead of by air allows you to make considerable savings on transport costs.
Long term profitability
Sustainable business practices can result in long-term profitability by cutting expenses, increasing efficiency, and having better brand recognition. Being environmentally responsible can also make your supply chain more sustainable in the long term. Indeed, supply chains can be threatened by the effects of climate change. For example, increased droughts will lead to reduced harvests, which can impact on food companies. Floods can lead to factory shutdowns. One of the most emblematic cases is the paralysis of the automotive and electronics sectors following the 2011 floods in Thailand due to the concentration of subcontracting factories in this region.
Companies with international operations are facing increasing demands for corporate social responsibility. Although many companies are committed to sustainable economic development, some of them face a challenge: how can they implement a global approach to reducing carbon emissions? From logistics to sales, each company can implement more or less innovative solutions to limit its carbon impact. This policy of environmental protection can only be beneficial for your company with economic benefits and sustainable in the long term.
If you are a new or existing born-global, Kompass can accompany you in your international business project, with decades of experience and a far-reaching international physical network. Kompass’s Market Ranking Report can help you evaluate the market potential of 5, 10 or 20 countries simultaneously, and identify new export markets with the highest potential. This comprehensive and personalized Market Ranking Report can minimize risk, saving time and money, as well as identify new business opportunities abroad