Embodiments of the invention provide a method, system and computer program product for carbon management for sourcing and logistics. In one embodiment, the method comprises using a computer for quantifying both a cost and a carbon impact of one or more logistics policies relating to a manufacturing process; and minimizing the cost and carbon impact using a defined equation including a first component representing a transportation cost, and a second component representing a carbon cost. In an embodiment of the invention, the quantifying includes using an analytics engine to quantify the cost and carbon impact. The analytics engine may include a shipment analysis module to calculate an optimal transportation policy, a sourcing analysis module for testing alternate sourcing options, a scenario analysis module to find an optimal order frequency, and a sensitivity analysis module to test the impact of various changes.