Using game theory to optimize supply chains in a climate-conscious way.

On the way to achieving climate neutrality, companies must also make a decisive contribution by drastically reducing their CO2 emissions. Government regulations, consumers and investors are already exerting a great deal of pressure on business in this regard. One starting point for really improving the climate balance and not just greenwashing is emissions along the entire supply chain. This is where the greatest potential for savings exists, since most greenhouse gases are released during the manufacture, transport and use of products.

In a feature article in Procure Swiss magazine, our client TWS Partners explains how companies can check their suppliers for their carbon footprint and, in a second step, use targeted economic incentives to encourage them to do more to protect the climate and promote sustainability. To this end, the game theory and behavioral economics experts at TWS Partners have developed a holistic approach in which, for example, internal CO2 prices are offset against the suppliers’ offers. The goal is climate-conscious optimization of the supply chain – even if this initially costs companies significantly more money in the vast majority of cases.

Procure Swiss Magazin is a Swiss trade magazine focusing on purchasing and logistics and is published by the Professional Association for Purchasing and Supply Management. The professional article by Dr. Sebastian Moritz and Dr. Maximilian Zott can be found here.