An Analysis of Sustainability Hotspots of Global Supply Chains – Applying the MRIO Model to Wind EnergyMelanie Welzel

20. Januar 2016

In order to effectively reduce adverse environmental and social effects and to create internal and external transparency, companies are in need of extensive information about the negative impacts related to their goods and services. Therefore, this work aims to generate a quantitative information base that supports a better understanding of the sustainability performance of products and of hotspots in companies’ global supply chains, thus empowering management to better prioritize actions and more effectively reduce negative impacts. For that reason, in the course of this thesis an Excel-based sustainability assessment tool is developed, enabling the analysis of selected sustainability indicators subdivided in regions, industries, and tiers. The calculations utilize an environmentally and socially extended version of the multi-regional input-output (MRIO) model which is a powerful method to assess the supply chain of organizations comprehensively.
In a case study approach, the MRIO model is applied to the global supply chain of a company operating in the wind energy sector. Utilizing the tool, screening life-cycle-assessments (LCAs) of four sample projects are conducted and sustainability hotspots within the company’s global supply chain are identified. Analyses of the four sample projects with diverse characteristics indicate energy payback times between x.x – x.x months and greenhouse gas (GHG) intensities of xx.x – xx.x g CO2-e / kWh. Furthermore, hotspots in the country of erection and production are unraveled, caused mainly by the electricity, metal, and concrete industries. The supply chain dominates overall impacts extensively; supplier tiers 2 to 4 causing the largest share of GHG emissions. Hence, for the case study company, the implementation of a supply chain management is of major importance.
It is concluded that the MRIO model proved to be an effective method that enables the analysis of entire supply chains with rather little effort. However, to assess the identified hotspots in detail, carrying out a process-based analysis is advised. To enable a more precise analysis of all sustainability dimensions, it is important to broaden the range of social indicators available on the MRIO database Eora in the future.