Climate change and the impact of global sourcing

At a time when the global economy seems to be on a steady path toward recovery, legislators throughout the world are refocusing on an issue that may radically change strategic sourcing practices from across the globe. Thus far, the industrial demands of the earth's denizens have exceed their ability to curtail climate change, which has the potential to significantly transform the distribution landscape. 

Forced to adapt 

Lawmakers have attempted to enforce greener policies in an effort to prevent global warming, but scientists with the United Nations are claiming that rising temperatures are imminent. Therefore, it's important for enterprises, governments and shippers to determine how this transformation will affect global sourcing strategies. 

According to Elaine Kurtenbach, a contributor to The Big Story, Saleemul Huq, director of the International Center for Climate Change and Development at the Independent University in Bangladesh, claimed that Asia's rapid urbanization and increasing economic importance will make the region a crucial element in how humanity copes with the shifting environment. 

The Intergovernmental Panel on Climate Change released a 32-page report outlining how the procurement process of various continents and locations around the globe will be affected by the heat. It is predicted that Asian countries will possess a dire need for health care-related products and food, as nations such as China and India are expected to encounter floods, droughts and mosquito-borne illnesses as a result of climate change. 

When being ecologically-friendly doesn't come from a mandate 

According to Industry Week, the U.S. Congress convened for an overnight session earlier this month to discuss possible solutions to curtail the effects of and significantly hinder climate change. Everything from emissions caps focused on manufacturers and distributors to tax breaks for those using green methods were open for debate. If those transportation logistics professionals and production companies are faced with new environmentally-driven regulations, the situation is likely to change spend management procedures in the following ways:

  • If organizations invest in renewable resources to supplement the energy needs of cargo ships, heavy-duty vehicles and factory operations, this could add to initial costly expenditures but lead to a significant return-on-investment. 
  • Merchandisers and wholesalers may favor overseas manufacturing exercising sustainable practices in an attempt to capitalize on federal tax breaks (if  these are implemented in the first place). 
  • It's possible that government authorities will place specific tariffs on overseas distributors notorious for executing poor energy use practices, driving up the costs of procuring commodities from those particular organizations. 
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