Collaborating on carbon
Achieving carbon reduction targets could be made a lot easier if buyers and suppliers worked together, but long term, agreeing on a common standard will be criticalDespite tough economic conditions, climate change remains high on the agenda for most corporate boards. A social responsibility to reduce carbon emissions is now widely woven into corporate policy, with ambitious targets set to reduce greenhouse gas emissions.
The problem facing many major companies is how to achieve these targets and, in particular, how to engage and involve suppliers. A significant barrier to bringing suppliers in line with buyer corporate policy has been a lack of clarity over the practical mechanisms by which collaboration can be established. The processes involved have to be properly audited, verified and appropriately certified so that both supplier and buyer are assured that standards have been met and that due process has been followed. For this purpose a professional independent auditor should undertake a site audit.
The industry that is actively engaged in tackling these issues is the Utilities sector. Taking a procurement perspective, leading Utilities in the UK - United Utilities, Scottish and Southern, National Grid, E-ON, Anglian Water, and Northumbrian Water - identified an opportunity to work together to achieve their carbon emission goals by being early adopters of an innovative and practical programme developed by international services company, Achilles Group.
The carbonReduction initiative is a collaborative model developed for international use across all industries, although at the moment the Utility sector is leading the way with early adopters including Outward Bound, Elster Metering, Mott MacDonald, May Gurney, Clancy Docwra, Radius Systems, Bi-Water, Black and Veatch, Laing O'Rourke, MWH, Balfour Beaty, McNicholas, Utilise Training Development Solutions and Flygt.
CarbonReduction offers a practical facility for buyers and suppliers to work together to meet their greenhouse gas emission targets based on CEMARS (Certified Emissions Measurement and Reduction Scheme), an established international program that has just gained compliance with world wide greenhouse gas standards ISO 14064. The CEMARS standard itself is built around the carboNZero certification programme run by New Zealand based Landcare Research, developed over ten years of research into greenhouse gas emissions and carbon monitoring. CarbonReduction helps suppliers understand how to consistently measure, manage and reduce their carbon footprint and also provides buyers with the verified information they need to make informed purchasing decisions.
Suppliers can start getting involved in the carbonReduction initiative by registering with Achilles. A starter pack takes them right through the process from the very first steps and offers guidance on issues such as: Who in my organisation needs to be looking at this? What kind of things do we need to be looking at - electricity bills, transport etc? Following guidance from Achilles on setting the boundaries, E-Manage - an online tool for recording and managing emissions data - is then used to set key performance indicators, produce a baseline carbon footprint measurement and create emissions inventory reports.
As part of carbonReduction the supplier has to put together three specific documents, including an emissions inventory. Suppliers also have to put together a management and reduction plan to say what sort of actions they are going to engage in over the coming year to reduce their footprint. This action plan has to come with senior management support to ensure that it really is embedded within the business.
The programme allows suppliers to manage their emissions, set targets and develop a long-term strategy. Finally, Achilles undertakes the audit and certification process and makes this available to buying organisations.
Practical and economic concerns
At this stage not everyone within the water industry is completely sold on the carbonReduction scheme, however. Paul Mullord UK director at British Water said: "With the recent introduction of its carbon reduction programme there is a danger that British Water members may begin to see another Achilles' scheme as just another burden on their businesses and the supply chain. At this early stage the views of water companies are mixed. At one end of the spectrum Anglian, which has signed up to the scheme, is very keen. However, one water company I spoke to expressed the view that it didn't want to impose any more cost than it had to on the supply chain, particularly in the present economic climate. With OFWAT, Defra and Achilles all operating a plethora of different schemes being considered to quantify businesses carbon footprints, it is clear that what the industry really needs is a common standard.
"A key question is how far down the supply chain should any system of carbon calculation go? Also, once scores are obtained how will they be used and weighted from company to company? As a result of questions like these, and the differing views of water companies, we are not actively encouraging people to sign up to the Achilles or any other scheme at present."
An accurate, cost effective, and fair method of auditing and certificating carbon reduction measures remains crucial to the water industry's future. In the pursuit of this, goal schemes such as carbonReduction will benefit both suppliers and buyers alike. However, with debate continuing over the exact nature of such schemes, we are still some way from agreeing on the correct approach to auditing the carbon footprint of our supply chain.
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