Carbon Footprinting for Products: What Companies Should Know
Just ten years after the World Resources Institute (WRI) published the first corporate carbon footprint standard in 2001, organizational carbon footprinting is widely practiced by corporations. For 2011, the Carbon Disclosure Project (CDP) received corporate-level carbon footprint reports for 91 percent of Fortune 500 companies. Already the next frontier in carbon footprints is emerging: a new and expanded scope that pushes deep into value chains by accounting for greenhouse gas emissions in products rather than organizations.
Major companies are increasingly using product-level carbon footprinting as an environmental decision-making and communications tool. Notable successes include Danone, who developed a tool to calculate the carbon footprint of yogurt that isolates carbon burden down to the flavor. Coca-Cola shared similar work in its 2010/2011 CSR report.
There has also been significant recent activity by international organizations to establish consistent measurement techniques for product-level carbon footprinting. In late 2011, WRI published its product carbon footprint standard and the British Standards Institution (BSI) issued a major update to its 2008 PAS 2050 protocol. In January 2012, a draft-ISO standard (ISO 14067) for product carbon footprints was released for voting.
In spite of recent achievements, the terrain of product-level carbon footprinting can still be tricky to navigate. On the operations side, there is significant complexity in measurement. On the sales and marketing sides, consumer understanding of carbon footprinting is not yet well developed. This combination of factors led Tesco, the first major company to measure and label product carbon footprints, to put its initiative on hold at the start of 2012 after labeling over 500 products.
However, companies can achieve significant benefits through product-level carbon footprinting that make these challenges worth navigating. In particular, the process can help companies to identify important environmental risks and improvement opportunities associated with specific products and product lines: risks and opportunities that may have been missed in carbon footprints on the broader organizational level.
For companies planning to pursue product-level carbon footprinting, here are a few pieces of advice.
1) Focus on primary data.
The activity of deeply assessing your supply chain can be an important discovery opportunity; allowing you to really understand the key issues associated with your products, and how different products compare to each other. Using primary data from your company’s own supply chain will allow you to achieve results that are much more practical and actionable than the results you would achieve using industry average data.
2) Participate in industry and product-specific standards development.
Both of the published protocols, and the proposed ISO standard, anticipate that rules for specific sectors or product types will be developed to ensure consistency of measurement. Companies that develop early efforts in product-level carbon footprinting will be best able to “reserve their seat at the table” and contribute to the formulation of specific rules for sectors or product categories. In this way, companies can contribute actively to a future with transparent rules for specific industry sectors that companies can use to position their products in the market.
3) Understand the limitations of your chosen protocol, but don’t deviate from it.
In spite of best efforts, there are certain issues for which the science behind carbon footprinting is not yet fully evolved. For example, the handling of biogenic carbon (i.e., carbon dioxide that stems from biological materials from the land or sea) is a particularly important issue given the critical role of global land use change as a driver of climate change. Environmental scientists are still developing research on carbon flux from land use change, which may have significant implications for product carbon footprinting in industry sectors that use renewable resources for things like food, bio-fuels, bio-plastic, wood, or paper products.
For example, consider bio-plastic made from sugar cane. From what regions is the sugar cane sourced? Are forests being cleared to make way for the specific plantations where the sugar cane is being harvested (i.e., direct land use change)? Are forests being cleared elsewhere to replace sugar cane production displaced from the global food supply by the bio-plastic production (i.e., indirect land use change)? In fact, all three protocols explicitly state that they await further scientific developments in order to measure indirect land use change. In other words, if you manufacture a bio-based product, your footprint may not fully reflect all of the indirect impacts it creates.
Understanding that there are inherent limitations in the science behind all of the protocols, what’s more important is to choose one protocol and apply it consistently year over year. This is the best way to ensure that you’re tracking your product’s footprint accurately, and allows you to monitor progress.
4) Temper your communications goals, at least for the time being
For now, the best application of carbon footprinting may be to guide internal decision-making. As the science evolves and as the protocols may become more harmonized around key product types. Such efforts may deliver a level of consistency in measurement and a sufficient understanding of carbon footprinting to enable effective external communication and labeling. For the time being, however, the carbon footprint number itself may not be as helpful for your company as the processes you undergo to understand, calculate, and reduce it.
Robert Vos is research director for Clean Agency. Candace Hodder is Clean Agency’s communications manager.
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