Product Carbon Footprinting – A Golden Middle Path?

Posted on January 25, 2011 by

Reality of emissions – who’s emitting?

The whole premise of Kyoto Protocol and Emission Reduction targets is based on the fact that emissions, wherever they occur, are added to the same atmosphere and are going to cause the same increase in the CO2 concentration in the atmosphere. For Emission Reductions to become a reality, the emissions must be reduced globally and not just relocate from a developed country to a developing country, which seems to have been the case of result of outsourcing activity. No doubt outsourcing has an economic incentive, but from an emissions accounting point of view, it places developing countries in bad light to an extent much more than they should be. For example – reality of China’s emissions is that though they are created in China, they are disproportionately consumed in the developed world. So is the case for many developing countries for which exports to developed world are a significant source of income. Driven by their consumption pattern shift, many developing countries may in fact be becoming bigger and bigger net importers of emissions, while claiming to have reduced emissions locally. This creates a situation where the developing countries are asked for reducing their emissions, significant portion of which may not be consumed or utilized by them (for their own development). The debate on worldwide emission reduction fluctuates between developed countries funding the emission reductions in developing countries and developing countries managing all the reduction (whatever they can and choose to) by themselves. Between these extremes exists the possibility of carbon footprint of products becoming universal knowledge and the world consumers gradually moving towards low-carbon footprint products.

What is Product Carbon Footprinting?
Product Carbon Footprinting allows the businesses and the consumers to take a unique view of the product in terms of the individual product impact on climate driven by carbon emissions created by manufacture, distribution, consumption and disposal of the product. It identifies the true drivers of GHG emissions in the entire life cycle and the supply chain of the product. Taking a view of the product life cycle overlap with GHG emissions can enable more targeted emission reduction and cost saving initiatives.

The steps in calculating Product Carbon Footprint
The approach is known as the Publicly Available Specification (PAS) 2050. It provides a supply-chain oriented approach to carbon accounting by building a robust and consistent method of product level GHG assessment. PAS 2050 is based on process Life Cycle Assessment (LCA), an approach that is commonly used in supply chain analysis to identify opportunities to reduce waste and increase efficiencies across an entire product system. The approach is not restricted to efficiency improvement measures limited to the boundaries of a single company but requires an understanding of the processes involved in the production, distribution, use and final disposal of a given product. Due to this crossboundary nature of impact, the awareness created across the supply-chain, the efforts taken across the supply chain would have a multiplier effect and realign worldwide supply chains to low-carbon processes and technologies. Wal-mart has recently initiated efforts in a similar direction by demanding environmental transparency and performance improvement from all its suppliers. The modalities may be slightly different, but the aim remains the same – to influence the entire supply chain to integrate “green” thinking into multiple aspects of its business. This approach has greater impact and lasting effects.

Coming back to the Product Carbon Footprinting, some companies who have used the PAS 2050 method have already reduced product-level GHG emissions by15-20%. Considerable cost savings have also been achieved due to energy and waste efficiency measures across the supply chain. Product carbon footprinting also helps companies strengthen relationships with suppliers, particularly if it reveals cost savings opportunities up the supply chain. Another benefit that will accrue slowly over time is due to rising consumer awareness and demand of carbon information of the products they choose. By communicating the carbon impact of its products, an organization would also be able to differentiate it’s products in increasingly cluttered markets and build an reputation of excellence.

Who’s doing it
20 leading companies in the UK have worked with Carbon Trust (an independent company set up in 2001 with the support of the UK Government) to measure and reduce the carbon footprints of their products. These companies represent diverse industry sectors, from food and drink to building materials and financial services, diverse classes of products from simple to complex in different channels, both business-to-business (B2B) and business-to-consumer (B2C). There is also diversity in the sizes and scale of operations. The benefits have been in revealing true sources and drivers of emissions, leading to more effective carbon reduction strategies. The companies could also identify high-impact cost saving opportunities across their supply chain. The companies include multi-billion dollar multinational corporations such as Cadbury’s, Coca-Cola, morphy richards, PepsiCo, TESCO and Kimberley-Clark.

Way ahead
For the adoption of Product Carbon Footprinting to become widespread, businesses will need to answer for themselves – Whether low carbon products are necessarily costlier compared to their high-carbon counterparts? How willcompanies compete on the “Green” image when more than a few players enter this area? World clearly needs clean products and cleaner information to enable consumer choices to drive us in the right direction. Low carbon is the future, we need a quick and efficient path to it.

Contact Agneya Carbon Ventures for knowing more about the Carbon footprinting

1. Stockholm Environment Institute (SEI), 2008
2. Product carbon footprinting: the new business opportunity, The Carbon Trust.
3. The Right Green Metrics – And the Wrong Ones, Harvard Business Publishing

Posted in: Sustainability