Impact of COVID-19 on Green Supply Chains and the Sustainable Economy?

The Luxembourg Centre for Logistics and Supply Chain Management (LCL) hosted the final LCL Conversation Series webinar of the spring/summer season on 7th of July with a compelling session on the impact of COVID-19 on Green Supply Chains and the Circular-Sustainable Economy.

Green Supply Chain management aims to integrate environmental concerns into the supply chain process across industries - we asked our expert guest speakers how the COVID-19 pandemic disrupted this effort and the Circular economy sphere, and where do we go from here?
 
Shiva Dustdar, Head of Division, Innovation Finance Advisory (or IFA) and Circular economy expert at the European Investment Bank (EIB) headquartered in Luxembourg, explained that the multilateral lender has been the de facto "climate bank" of the European Union.

The bank re-aligned all of its activities to the 2015 Paris Climate Agreement, whereby by 2025 they would achieve a 50% positive impact on the climate through financing of €30 billion per year for "green" projects. Policy guidelines underwent a huge shift toward supporting Green Supply Chains by closing funding gaps in the Circular economy.

The COVID crisis exposed the vulnerability of Supply Chains with insufficient contingency plans. In fact, this complex eco-system with interdependent players is not well-understood, so the bank sought to bring a systemic, broader perspective by financing a large number of "green" infrastructure projects. Faced with a critical liquidity crisis, the bank guaranteed funding on a pan-European level and took the opportunity of the crisis to bring "circularity" as a systemic concept into all projects to "green" them.

Dr. Enrico Benetto, Head of Environmental Sustainability Assessment and Circularity (RDI Unit) at the Luxembourg Institute of Science and Technology (LIST), works to sustain the ecological and energy transition toward a more sustainable society. Dr. Benetto presented the metrics of the "window of vitality", an ecosystem network analysis.

In fact there is a trade-off between greater efficiency (lower ecological impact) and robustness, which serves to strengthen resilience. In this life cycle, Supply Chains are a "system core function" to assess a product and the multiple impacts it has on sustainability. Dr. Benetto provided the example of a hydrogen-energy-powered vehicle in the "greening" of Supply Chains as a trend for all automotive vehicles. Supply Chains are actually an exchange of money and goods in the lifecycle of inventory networks, and in order to find the sustainability impact, we have to find optimal model schemes.

Carl De Maré, Vice President and Head of Technology Strategy for ArcelorMittal, the steel giant headquartered in Luxembourg, and the Chairman of the European Steel Technology Platform (ESTEP), said that the company had not let the COVID crisis "go to waste". Indeed, funding was accelerated into solutions to fight climate change by investing in renewable energy infrastructure for their steel plants to make steel "the material of the future". The company has successfully lowered carbon emissions with the goal of becoming carbon-neutral. In greening the Supply Chains, ArcelorMittal is using "end-of-life" steel scrap to achieve sustainable standards in steel production. A prominent example will be their new Luxembourg headquarter building (currently under construction in Kirchberg) to be made entirely out of re-usable steel - the building can be dismantled, with the steel re-usable for other purposes down the road. While their are certainly constraints in Supply Chains, the company is striving to capture its own plant emissions and re-use them as "smart carbon" to achieve "responsible steel".

Download the speakers' presentations

ArcelorMittal presentation

European Investment Bank

LIST presentation

View replay

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The LCL Conversation Series is signing off now for a short summer break but wishes to thank its loyal followers and hopes to see everyone in the fall for continuing monthly online seminars on Logistics and Supply Chains!