Sustainability is reshaping Canadian supply chain operations

As environmental concerns around climate change and ecosystem disruption continue to grow globally, the supply chain industry is shifting its approach to the future by adopting more sustainable practices.

As one of the largest contributors to environmental degradation—particularly through the carbon footprint of the shipping industry—energy consumption and greenhouse gas emissions have become focal points in the push for green energy solutions.

From sourcing and production to transportation and distribution, the Canadian supply chain collectively contributes approximately 60 per cent of global carbon emissions and accounts for around 90 per cent of Canadian companies’ environmental impacts.

The federal government is supporting green warehousing and sustainability initiatives through a range of programs, including the Greening Government Strategy, the Net-Zero Challenge and targeted funding. These initiatives aim to reduce greenhouse gas emissions, promote green procurement, and encourage businesses to adopt more sustainable practices throughout the supply chain.

The Greening Government Strategy specifically targets the National Safety and Security Fleet, which includes aircraft, marine vessels and land vehicles operated by the RCMP and the Department of National Defence. The government is also collaborating with provincial, territorial, municipal and international governments, Indigenous Peoples, Crown corporations and key stakeholders to reach shared environmental goals.

Examples of this collaboration include Buyers for Climate Action—a coalition of large, green public-sector buyers in Canada—and the Greening Government Initiative, launched in partnership with the United States. With more than $30 billion in annual procurement, the Government of Canada is the country’s largest public buyer and is well-positioned to stimulate market demand for low-carbon products and drive investment in Canada’s clean technology sector.

The Net-Zero Challenge encourages businesses to develop and implement credible, effective plans to transition their operations to net-zero emissions by 2050. While currently a voluntary program, many Canadian companies acknowledge that the complexity of the supply chain presents a significant barrier to achieving net-zero goals. Managing emissions across diverse supplier networks creates challenges in data collection and collaboration. Smaller suppliers, in particular, may struggle to align with decarbonization efforts without support from larger partners.

Industry leaders are also exploring roadmaps for more sustainable transportation. Shifting to electric fleets, biofuels, hydrogen-powered vehicles and rail transit is helping reduce carbon emissions. However, battery range remains a top concern—especially for refrigerated transport, where maintaining specific temperatures is critical. Solar-powered technologies have emerged as a viable solution, allowing carriers to overcome some of the limitations associated with electric vehicles alone.

For companies not yet ready to adopt electric or alternative fuel vehicles—or for those without their own fleet—optimized route planning can make a meaningful impact. Properly charted delivery routes reduce fuel consumption and emissions. The integration of GPS and real-time data allows carriers to avoid traffic congestion while enhancing customer satisfaction through on-time and accurate deliveries.

Green warehousing is also playing a significant role in lowering the environmental impact of operations. More third-party logistics providers and warehouse operators are incorporating features such as solar panels, LED lighting and advanced insulation to reduce energy use. The adoption of solar technology is also helping to create new jobs in the warehousing sector.

Other areas where Canadian companies are advancing sustainability include the use of eco-friendly packaging materials, participation in carbon offsetting programs, digital transformation to reduce waste, and investment in reverse logistics—which focuses on the return, reuse and responsible disposal of products. These initiatives support a circular economy and, when implemented effectively, deliver both environmental and financial benefits.

In the growing age of artificial intelligence, AI has become a vital tool in transforming logistics operations. It helps identify inefficiencies, minimize waste and risk, and improve inventory management, thereby reducing unnecessary storage and freight usage.

Despite progress, several roadblocks remain. Transitioning to eco-focused operations can be costly, and companies face technological gaps and a lack of alignment with international partners that haven’t yet embraced sustainability. With Canada positioning itself as a leader in climate action and aiming for exponential growth in the green energy sector, government support for businesses making the transition to sustainable operations is more crucial than ever.