CRITICALITY TO ADDRESS THE NET-ZERO EMISSION
PROBLEM FOR A SUSTAINABLE FUTURE
Achieving a sustainable future has become much reliant on addressing
the net-zero emission problem. The global concerns about climate
change and environmental degradation have enhanced recognition that
carbon-neutrality (in supply chains) is pivotal in reducing greenhouse gas
emissions and minimizing environmental impact (of business operations).
AI in modern age plays a crucial role in leading the sustainability
endeavours, controlling carbon emissions and guiding the way towards
a sustainable future.
Addressing the net-zero emission problem is critical for a sustainable
future due to several key reasons. As for the supply chains, it is equally as
important in order to contribute to global sustainability:
1. Achieving net-zero emissions is crucial to combat climate change and
limit global warming. By reducing greenhouse gas emissions, particularly
carbon dioxide, we can mitigate the adverse impacts of climate change,
such as extreme weather events, rising sea
levels, and ecosystem disruptions.
2. Net-zero emissions contribute to the
preservation and protection of the environment.
By minimizing the release of pollutants
and greenhouse gases, we can safeguard
ecosystems, biodiversity, air quality, and water
resources, promoting a healthier and more
sustainable planet.
3. Transitioning to net-zero emissions has
significant co-benefits for human health.
By reducing air pollution and improving air quality, we can mitigate
respiratory diseases, cardiovascular problems, and other health issues
associated with pollution. A cleaner environment leads to improved
well-being and quality of life.
4. Net-zero emissions align with sustainable development goals. By
embracing clean energy sources, energy efficiency, and sustainable
practices, we can drive economic growth, create green jobs, foster
technological innovation, and ensure long-term prosperity while
reducing reliance on finite resources.
5. Achieving net-zero emissions is a global responsibility. By taking action
to reduce emissions, countries and organizations can demonstrate
leadership, contribute to international climate goals, and promote
equity in addressing climate change. Net-zero emissions efforts should
prioritize fairness and consider the needs and vulnerabilities of all
communities, particularly those most impacted by climate change.
6. Endeavours to attain Net-zero supply chain present themselves as an
opportunity for business in the future (Stevey Varley et al., 2021)
PROGRESS AND CHALLENGES – CARBON NEUTRAL
SUPPLY CHAINS WITH AI-ENABLED OPTIMIZATION
In the global pursuit of sustainability and combating climate change
and ever since the signing of the Paris Agreement on Climate Change in
2015, a significant progress has been made globally in achieving carbonneutral supply chains aided by AI-enabled optimization, meanwhile,
certain challenges are also being faced.
The incorporation of AI technologies in supply chain optimization is one
major area of progress. Globally, organizations are adopting AI algorithms
to identifying sustainable practices, minimize carbon footprints, and
enhance their overall operational efficiency. These algorithms optimize
various aspects such as inventory management, transportation routes,
facility locations, and energy consumption. Which ultimately aids in
achieving sustainability.
The AI models have an integrated sustainability criteria which allows
them to assess carbon emissions data, renewable energy sources, and
eco-friendly materials. By considering these
criteria, businesses can make informed decisions
reducing environmental impacts.
The global collaboration and knowledge sharing
initiated by the Paris Agreement have facilitated
a lot of progress. Governments, organizations,
researchers and institutions worldwide are
working together to develop best practices,
guidelines, and benchmarks for carbon-neutral
supply chains at all levels. Initiatives such as the
United Nations Global Compact and the World Business Council for
Sustainable Development have played a pivotal role in fostering crosssectoral cooperation, ensuring the exchange of experiences, and
promoting sustainable supply chain practices.
The transition to carbon-neutral supply chains also requires renewable
energy sources. AI-enabled optimization models assist in identifying
optimal energy sourcing and consumption strategies, considering
factors like energy costs, carbon intensity, and grid availability. This
integration has led to increased adoption of renewable energy solutions
such as solar and wind power, enabling supply chains to reduce their
reliance on fossil fuels and mitigate their carbon emissions.
Despite the progress made, several challenges persist in achieving
carbon-neutral supply chains with AI-enabled optimization on a global
scale. The major challenges include the availability and quality of data,
technological limitations, cost and finances, complexity of the supply
chains and regulatory frameworks. Overcoming the challenges requires
collaboration among governments, businesses, industry associations,
research institutions, and consumers. Effective partnerships, knowledge
sharing, and aligning incentives among stakeholders with diverse
interests and priorities can drive systemic change and accelerate
progress.
The integration of AI technologies, the adoption of sustainability criteria,
global collaboration, renewable energy integration, and enhanced data
analytics have propelled advancements. However, challenges are still
there. Addressing these challenges requires a holistic approach that
involves technological advancements, supportive policies, financial
mechanisms, collaboration, and continuous innovation. By collectively
addressing these challenges, organizations and nations can move closer
to achieving sustainable and carbon-neutral supply chains worldwide.
INCORPORATING AI-BASED OPTIMIZATION TO
ACHIEVE NET-ZERO EMISSIONS IN SUPPLY CHAINS
The power of artificial intelligence (AI) based optimization can significantly
contribute to achieving net zero emission.
AI-enabled optimization plays a critical role in designing and managing
carbon-neutral supply chains. AI algorithms may help companies in
effective analysis and optimization of various stages of supply chain,
such as sourcing, manufacturing, transportation, warehousing, and
distribution. The development of various optimization techniques by
utilizing AI based algorithms can enable businesses to evaluate and
create optimized solutions to achieve the reduction of carbon emission,
improve energy efficiency and enhance the overall sustainability of all the
business operation in general and in particular. AI algorithms can provide
data-driven strategies by considering factors such as fuel efficiency,
energy consumption and production processes to achieve the reduction
of emissions and improve supply chain performance. (Tang et al., 2020)
Inventory
management,
transportation
optimization, and facility location optimization
may be the key areas for carbon emission
reduction. AI algorithms are equipped to
process large amounts of data leading to the
effective business models comprising optimized
business operations with minimized emissions.
Data collection and analysis play a crucial role.
Gathering comprehensive data on supply chain
operations, including energy consumption,
emissions, transportation routes, and inventory levels is vital. AI algorithms
can then analyze this data to identify inefficiencies, emission hotspots,
and areas for improvement. In inventory management, businesses
can optimize inventory levels, reduce excess stock, and minimize
transportation requirements. Transportation optimization involves
optimizing routes, consolidating shipments, and selecting fuel-efficient
modes of transport to minimize emissions. Facility location optimization
focuses on strategically locating facilities to minimize transportation
distances and reduce energy consumption. (Mishra et al., 2020)
Organizations can leverage AI-enabled technologies to integrate
renewable energy sources into their supply chains. By optimizing energy
usage, storage, and distribution, AI can ensure that renewable energy
is efficiently utilized, further reducing emissions. Exploring renewable
energy integration, assessing the impact of emerging technologies,
and developing decision-support tools that consider uncertainties
and disruptions in supply chain operations may be the future research
directions to shaping the sustainable future for business supply chains.
Furthermore, AI-based optimization can support sustainable sourcing
and supplier selection. By considering environmental criteria, such as
carbon footprints and sustainability certifications, AI algorithms can
help organizations identify suppliers with lower emissions and greener
practices, thereby reducing the overall carbon impact of the supply chain.
Continuous monitoring and feedback loops are essential for success. By
integrating real-time data and feedback, AI algorithms can adapt and
improve supply chain operations over time, further optimizing for netzero emissions. (Mishra et al., 2020)
The carbon footprint can be optimized in supply chains through
the utilization of carbon trading mechanisms. Organizations can
strategically reduce their ecological impact, while also participating
in carbon offset initiatives, by integrating the AI-enabled optimization
models with carbon trading mechanisms. These specific optimization
models enable supply chains to identify emission hotspots, assess
the impact of their carbon reduction strategies, and make informed
decisions based on the statistical evaluation of AI systems to minimize
carbon emissions throughout the supply chain network. Supply chains
can evaluate various factors such as fluctuating carbon prices and
evolving regulatory frameworks employing AI algorithms to answer the
uncertainties associated with carbon emissions and carbon trading in
supply chain decision-making processes. (Zhou et al., 2017)
The potential benefits of carbon trading in supply chains include fostering
collaboration among stakeholders, incentivizing emission reduction
efforts, encouragement to innovation and technology development,
facilitation to international cooperation and supporting sustainable
development. It enhances the interest of favourable government policies
and regulations in facilitating effective carbon trading mechanisms and
encouraging widespread adoption within supply chains. (Zhou et al.,
2017)
In conclusion, AI-based optimization offers significant potential for
achieving net-zero emissions in supply chains. The integration of AI
algorithms empowers organizations to optimize their supply chain
operations, reduce emissions, and drive sustainability. By implementing
the AI based frameworks and embracing carbon trading mechanisms,
companies can make significant strides towards achieving a sustainable
future while mitigating the environmental impact of their supply chain
activities. Embracing AI-enabled optimization in carbon neutral supply
chains enhances the opportunities and opens many new avenues
towards the creation of a more sustainable and resilient future for
generations to come.
REFERENCES:
1. Why is net zero so important in the fight against climate change?
https://www.lse.ac.uk/granthaminstitute/explainers/why-is-net-zero-soimportant-in-the-fight-against-climate-change/
Authors: Georgina Kyriacou, Josh Burke
Published: 8 Feb 2023
2. How supply chain sustainability helps unlock resilience and growth
h t t p s : //w w w. a c c e n t u r e . c o m /u s - e n / i n s i g h t s /s u p p l y c h a i n - o p e r a t i o n s /s u p p l y - c h a i n s - k e y - u n l o c k i n g - n e t - z e r o e m i s s i o n s # : ~ : tex t = W hy % 3 F, a c h i eve % 2 0 b ro a d e r % 2 0 to t a l % 2 0
enterprise%20reinvention.
3. Why net-zero supply chains are the next big opportunity for business
https://www.ey.com/en_gl/supply-chain/why-net-zero-supply-chainsare-the-next-big-opportunity-for-business
Authors: Stevey Varley, Orlan Boston
Published: 25 May 2021
4. Optimization models for supply chains under risk, uncertainty, and
resilience: A state-of-the-art review and future research directions
Authors: Pravin Suryawanshi, Suraj Dutta
Published: January 2022
5. Succeeding in the AI supply chain revolution
Authors: Knut Alicke, Valerio Dilda, Stephan Görner, Lapo Mori, Pierrick
Rebuffel, Sebastian Reiter, and Robert Same
Published: April 30, 2021
6. Carbon-Neutral Supply Chains: A Review on Models, Algorithms, and
Applications
Authors: Tang, O., & Zhou, Y.
Published: Annals of Operations Research, 2020
7. Carbon Emission Optimization in Sustainable Supply Chains: A
Literature Review and Future Research Directions
Authors: Mishra, N., & Khasnabis, S.
Published: International Journal of Production Research, 2020
8. Optimizing Supply Chain Carbon Footprint Under Carbon Trading: A
Model for Sustainable Development
Authors: Zhou, L., Yang, X., & Cao, Z.
Published: Sustainability, 2017
9. World Economic Forum
Net-Zero Challenge: The Supply Chain Oppurtunity (2021)