Survival of the greenest – the future of carbon footprinting
Debbie Hobbs, principal with Environ, explains how companies need to approach the task of measuring their overall greenhouse gas emissions
Carbon footprinting is moving up the boardroom agenda. Companies are looking closely at their carbon footprint and those of their products for many reasons, including customer and consumer demand, sector competitiveness, the increasing cost of energy, carbon offset project opportunities and public relationship management.
The introduction of the government’s Carbon Reduction Commitment (CRC) Energy Efficiency Scheme earlier this year, with its incentives for reducing emissions and fines for failure to comply, has provided the most direct link to date between carbon emissions and companies’ bottom lines.
The scheme’s first league tables, to be published next year, will show how major UK companies compare with competitors in terms of sustainability and will push carbon emissions even further into the public arena.
The process of creating a carbon footprint for an organisation or a product is already well established – from defining methods and boundaries, through collecting and collating data to conversion into carbon dioxide equivalents.
But because carbon footprinting is a process rather than an end in itself, it is progress in methodology and measurement techniques that will lead to more meaningful results and better platforms for improvement.
The challenge is to create a defensible, actionable approach – and the key is the people behind the process not the data or systems they use.
One of the main aims of carbon footprinting is to establish the baseline from which improvements can be measured. Obvious targets for evaluation include production and transport.
Once a baseline footprint has been established, it is possible to identify ways to improve and measure progress against targets.
Here, the biggest mistake that a company can make is underestimating or oversimplifying the task involved. It may sound obvious, but the quality and accuracy of the outcome is only as good as the data put in. The wrong assumptions or level of detail can completely alter a set of results.
Involving as broad a spectrum of people and functions from an organisation as possible, rather than leaving the task to the environmental or corporate social responsibility (CSR) team, is crucial.
Getting multiple people drawn into the kick-off meeting – from purchasing to facilities, from management to marketing – will avoid unnecessary overlap and help to quickly establish where the right data is most conveniently located.
The depth of the approach is equally important. Getting right to ‘ground zero’, by obtaining figures from the source rather than third-party assumptions, will in most cases ensure the greatest accuracy. More often than not this starts with the purchasing team.
Where possible tap into existing systems rather than reinventing the wheel. For example, energy tracking or purchasing records will often provide what is needed immediately. However, bear in mind that site-specific data, rather than centralised records, is the most helpful for driving change.
All this will help with the final, but crucial, element: consistency. Emissions reporting must match all other CSR reports and monitoring. Without it, credibility quickly vanishes.
At Environ, we map out the process and boundaries and use state-of-the-art software to translate this into meaningful data collection and footprint calculations.
The position of the footprint boundary is important. Many organisations that have already published footprints have realised their boundary is too small and may need to be redrawn to incorporate supply chain and other emissions.
In general, the larger and more complex the organisation or supply chain, the more important it is to choose the correct boundary. If the boundary is set too wide initially, it can be difficult to establish a credible footprint.
In our experience it is better to start with a smaller boundary and state that is likely to change as the organisation becomes more confident and able to establish the footprint more accurately at certain milestones.
Second, it is important to use the most appropriate protocol or standard against which to prepare a footprint. Because many organisations and supply chains are international, adopting a national or even regional methodology may not be appropriate for all aspects of the footprint.
Internationally recognised emission factors are much easier to find now that there are several recognised databases to refer to. However, the accuracy of footprints can be reduced by the blanket application of global emission factors. Detailed consideration of the unique elements of one supply chain versus another, for instance, can lead to significantly different footprints.
While carbon footprint initiatives tend to focus on energy, process efficiency and waste reduction, other issues are often identified. For example, Walmart discovered its grocery store refrigerants account for more of it greenhouse gas footprint than its truck fleet, resulting in several initiatives to improve refrigerant management.
And once the results are known, what should organisations be doing with them?
Clearly their main value is in legislative compliance and the ability to make meaningful reductions and cost savings within the organisation. But as carbon footprinting becomes an increasingly important issue for consumers, more public-facing ways of communicating these changes can also be harnessed.
Coca-Cola, for example, charts the footprint of a can of cola against a Sunday roast, South African grapes and a transatlantic flight, and visitors to its website are encouraged to “Trace your Coke” to understand the life cycle of their product.
Environ has worked with companies to uncover and implement ways to reduce their carbon footprint. In some cases, initiatives have been as simple as improved logistics; in others they have been more fundamental. For example, since much of the waste or energy use attributable to a product is a function of its original design, redesign may become necessary. Or, at the very least, carbon footprinting considerations should be taken into account during the design of new products.
Clients have found that while the more glamorous energy-efficiency options such as wind turbines hold marketing appeal, it is the more prosaic energy-efficiency measures that offer the most significant and cost-effective improvements that are likely to reduce running costs and protect margins.
These include improved logistics, high-efficiency lighting, more efficient refrigeration equipment, improved insulation of buildings and systems, and more efficient and better control of process equipment, heating and cooling systems.
Supply chain emissions
As well as tracking ‘scope 1’ and ‘scope 2’ operational emissions, it is ‘scope 3’ supply chain emissions that are currently the main area of focus, both for managing and reducing emissions and mandatory reporting and CSR reports.
Companies are increasingly reporting on factors that are meaningful to their stakeholders and those that are significant in terms of quantitative data.
It is vital from the outset to dig deep into the supply chain to evaluate the performance of raw material supplies, and to look further up the chain to assess products through purchase, use and disposal.
Environ’s approach is to establish the fine detail within a particular supply chain footprint to properly understand the individual peculiarities that lead to a unique footprint for a particular product. By doing this we enable our clients to see the opportunities to improve their carbon performance.
Looking forward, attention is on the soon-to-be-launched Greenhouse Gas (GHG) Protocol standards developed by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD): the Product Lifecycle Accounting and Reporting Standard and the Scope 3 (Corporate Value Chain) Accounting and Reporting Standard.
These two standards will provide methods to account for emissions associated with individual products across their life cycles and of corporations across their value chains.
Already road-tested by 60 companies, and with the draft content already being adopted, these standards will provide a new way for corporates to account for and improve emissions.
In summary, key features of an effective carbon footprinting initiative focus on:
Employing an accepted and recognised methodology.
- Carbon footprinting the whole company – there is little sense in working on one part of a business because it is important to take a holistic view before implementing improvements that will impact many different parts of the business.
- Engaging suppliers – use life-cycle analysis techniques to drill down to raw materials.
- Evaluating complete life cycle – include distribution, sale and disposal.
- Identifying ‘hot spots’ – quick wins on the largest emission sources will engender support for the initiative.
- Employing expertise – work with experienced people who can identify the best opportunities for improvement.
- Setting targets and measuring progress.
- Seeking third-party verification.
- Publicising successes.
- Making sure initiatives deliver bottom-line benefits.
Last, it is worth remembering carbon footprinting is a long-term approach, but a key step in the development of an overall carbon strategy that will deliver sustainable business benefits in the new low-carbon economy.