Missing links - footprinting along the supply chain
Ignoring the supply chain when calculating a product's carbon footprint is tempting for some but, ultimately, unhelpful in the race to alleviate climate change. Tom Idle reportsAs the articles in this supplement show, the many different processes, methodologies and tools to guide businesses down the footprinting path create inconsistencies among definitions used by those quoting what their footprint is. Those firms that have calculated their direct impacts, while ignoring the emissions further along their supply chain will boast of a significantly smaller footprint than others.
In the mid-1990s, the World Resources Institute and the World Business Council for Sustainable Development put their heads together and established the Greenhouse Gas Protocol. This was the first internationally agreed accounting and reporting standard for greenhouse gases (GHG), with a protocol that specifically distinguishes between three different scopes of counting carbon impacts; Scope 1 dealing with directly related emissions, Scope 2 with electricity-related indirect emissions, and Scope 3 with other indirect emissions.
This system of tackling carbon accounting at all levels is crucial in assessing the true whole-life impact of products and services; it is quite non-sensical to quote as a product footprint the emissions associated with product manufacture, while ignoring the emissions from the product while it is consumed and disposed of. The graphic at the bottom of these pages shows diagrammatically the typical stages a product might travel through - from the manufacturing plant to the recycling facility, or landfill.
Taking all of these elements into account equates to a product lifecycle assessment - from raw material acquisition, processing, manufacture, retailing, use, disposal and the transport between each of the stages.
"The greening of supply chains is one of the most effective ways in which companies can fulfil their climate change responsibilities, including the global recognition that organisations need to be aware of the carbon emissions associated with their supply chain - wherever those carbon emissions occur," says Paul Smith, a project leader on footprinting with assurance provider LRQA. He says that, despite the clear arguments for doing so, business still aren't looking along their supply chains. "The danger is that greening supply chain responsibility may actually fall between the chairs at the board table, so it's important for the CEO to resolve this."
Simon Aumônier, a partner with the environmental consultancy firm ERM, has been doing what amounts to carbon footprinting - lifecycle assessments - for many years. He heads up the footprinting practice and argues that ignoring the Scope 3 approach might be self-defeating. "I'm keen to talk to clients about lifecycle assessment techniques because, if you don't take the wider holistic view, you do run the risk of doing something that is counter productive and isn't cost effective," he says.
ERM has been working with supermarket giant Tesco for the past two and half years, establishing footprint data for the company and its range of products - from fresh beef to flower bouquets. Retailers are a good example of where looking purely at Scope 1 and 2 impacts would be meaningless; the impact of Tesco's own activities accounts for a very small proportion of its climate change reverberations when you consider the impact of the food sold - originating upstream in the agriculture industry or downstream by the consumers at home in their kitchens.
"Tesco recognised the issue about supply chain and they wanted to start looking at their products at the same time as they were looking at their Scope 1 and 2 impacts," says Aumônier.
One of the more complex pieces of work ERM did for the company involved calculating the footprint of its beef. Here, a number of uncertainties occurred associated with intestine-originating methane emissions, feed production, farm animal wastes, the allocation to the different products extracted from each slaughtered animal, the energy use in the retail stage, and the transport from store to consumer. And the methane formation in cattle varies depending on the lifespan of the animal and the type of feed it has. Then there is the complexity of the nitrous oxide emissions arising from the soils involved in the process too. The graphic above outlines how the carbon footprint for the product was broken down.
The consultancy also looked into the impact of food miles. The obvious difference between the footprint of UK agricultural products and those imported is an increased transport distance. Where production processes are the same for the two, the food miles analogy - something the consumer seems to now be aware of - holds, and the UK product will have a smaller footprint.
But, often the transport segment of a footprint is a relatively small part of the overall. In a comparison analysis between Kenyan grown roses and those grown in the Netherlands, the African plants came out on top, with a smaller footprint. Despite the extra air miles to ship the flowers to the UK, the energy consumed in heating the Dutch greenhouses was too significant to justify the common claim that importing locally is better for the environment. Another example is Youngs Seafood, which moved its de-shelling of langoustines process from Scotland to Thailand. A detailed analysis revealed no real difference in the footprint despite the length of transportation involved.
The popularity of footprinting activity is on the up. Aumônier has seen a growing client base over the last few years and the newly published PAS 2050 standard (see page 6) will, no doubt, generate further interest. But why is carbon footprinting so fashionable?
The expectation is that a company's carbon footprint will provide a baseline by which future strategy is developed; the corporate policy and reputation can be backed up by quantifiable data, as opposed to guesswork and any future improvements can be properly measured. If a footprint highlights GHG hotspots, a business case for investment in carbon-cutting technology might have more weight.
Crucially, all the while footprinting analysis is being demanded up and down the supply chain, good data and efforts to cut GHG emissions is being encouraged more widely. Lewisham Council has just embarked on a rather ambitious supply chain footprint analysis. Rather than stopping at meeting government requirements to measure its direct emissions, the council is working in partnership with Trucost to examine its lengthy list of suppliers too. Local government's spending power could play a crucial role in influencing others. "Lewisham wants to think outside the box," says Malcolm Smith, the executive director for regeneration. "Alongside environmental considerations, reducing CO2 emissions is also a business opportunity, giving suppliers a competitive edge and allowing the council to reduce costs and direct resources into essential services. We know that's what residents want us to do."
Trucost's analysis revealed that, while the direct emissions of the council were relatively low at 33,000 tonnes of CO2 a year, its suppliers emitted 89,000 tonnes. The company has a huge database of corporate carbon emissions and the approach is analogous to credit scoring. "It enables the council to engage with hot-spot suppliers without ever over-burdening or ignoring the majority of suppliers that have a low carbon impact," says managing director of the company, John Martin.
What the project did throw up was the fact that a large number of suppliers do not measure or disclose information on their carbon emissions. "Getting data can be a problem," admits Aumônier. "And the longer and more complex the supply chain, the more difficult it can be to get data that is of acceptable quality." Without quality data, he says, it is hard to carry out a quality piece of work.
However, if a difficult-to-obtain piece of data is of secondary importance, then secondary sources may be used. These range from industry averages, info from databases (as was necessary in the Trucost/Lewisham project) or data from competitors. Of course, that is when uncertainty creeps in. But does this uncertainty devalue carbon footprinting as an activity? Not necessarily, according to Aumônier. Scientific data may be more academically pleasing, but even relatively crude data can highlight hotspots in the footprint and illustrate where improvements need to be made, he says.
But "verification of data is a principle part of a footprinting exercise", he says. "If you can get it, you're laughing. If you can't, well, you're up a gumtree. And it starts to beg some questions: if your suppliers can't tell you how much energy they use, how well are they managing their process?"
It is thought that the weight of influence of public procurement strategies will change this scenario - by including a clause in its tender criteria on the necessity for suppliers to provide emissions data, Lewisham's overall carbon footprint will soon fall rapidly.
This is exactly the sort of strategy that BT has devised. The firm's climate strategy, launched in 2007, includes a commitment to encourage suppliers to help reduce the environmental impact of the company's products. But, as Dr Anne-Marie Warris, the technical director on climate change at LRQA, warns, businesses ought to get their own house in order before telling suppliers to do the same. "Suppliers are less likely to respond positively to requests for environmental data and improvements from companies that are not making any themselves," she says. Warris suggests holding "supplier days", in a bid to make the process more of a partnership. "Face-to-face meetings assure all stakeholders that the initiative is a partnership designed to benefit all parties - not just the imposition of a new burden."
So, what does the future hold for carbon footprinting? As has been suggested, lifecycle assessment activity has been going on for years and, arguably, it is only the recent interest in climate change that has put carbon footprinting on the map. Aumônier's concern is that, with such an interest in carbon, other environmental concerns will be forgotten. "We risk having a low-carbon product which just so happens to be a product with a high water footprint," he says. "We might compromise our overall environmental objectives. If a low-carbon tomato is a very high water footprinted tomato that has come from a water-stressed part of the world, then perhaps we should be accepting that we should use that slightly higher-carbon tomato."
There are no easy answers, but it's clear that some important decisions will have to be made. Perhaps most likely is retailers doing some choice editing for consumers - deciding what products to put on their shelves and deciding what constitutes those products' sustainability. In the meantime, carbon footprinting along the supply chain - whether that is of cattle, tomatoes or computers - has a very important role to play in influencing responsibility in businesses across the world.