I often make that analogy that carbon is to environmental performance what the calorie is to your diet – and unless you are blessed with great genes and inherent good practices, without some management you’re probably getting fat. Now, while a caloric-based diet doesn’t necessarily deliver well-rounded health, it certainly provides the foundation and metrics for a weight management system to emerge.
While the debates around the impact of climate change continue, large multi-site organizations, especially retailers, need to get prepared to manage the impact their enterprise has on the planet’s health. Like it or not, carbon is and will continue to be the resounding metric.
Carbon data provides a means to benchmark and understand a retailer’s largest environmental impact areas in a neutral, non-prescriptive way similar to an individuals dietary needs being unique, and allows retailers to develop reduction plans that align with their unique brand.
This column is intended to provide a snapshot on what I’ll refer to as “carbon preparedness” – an often missed first step in carbon management. The hardest part is not figuring out how carbon operates as a tool for the company – this flows easily once the framework is in place.
The challenge every retailer faces is merely gaining access to the real data that is needed to do a carbon inventory. For example, retailers may know how much they spend on electricity in a given year, but do they have store-by-store kWh use organized and ready for reporting at the drop of dime – including stores within malls where a CAM charge system is in place? Most do not, especially retailers with an older infrastructure.
Many companies run into challenges collecting granular data multi-site because they are lacking an enterprise wide reporting platform for data capturing required for a meaningful carbon inventory analysis. Carbon management should be about data – real data, not assumed data. A carbon report based off assumed data can lead to misleading impact areas, misguided sustainability strategies, and will not offer the level of insight possible with accurate reporting.
If your company has yet to facilitate a carbon footprint, there are a few basic measures that should be put in place so that you are ready to learn about the incredible value that carbon management can bring to your company or the day when regulation knocks on your door.
So how should you move forward? Before you dive into a full blown carbon inventory exercise, it’s important to use a framework for accounting that works within the standards for reporting from the International Standards Organization (ISO 14064) – the WRI/WBCSD’s The Greenhouse Gas Protocol. The GHG protocol’s framework allows retailers to understand, quantify and manage their GHG emissions based on three scopes of emissions data.
Scope 1: Preparedness for Direct Emissions
This scope includes emissions that result from activities that are owned or controlled by the organization, such as company owned vehicles and facilities. In the majority of cases this means the emissions that result from the combustion of natural gas from heating, refrigerant leakage in cooling systems, and fossil fuels combusted in company owned vehicles.
The global warming potential behind refrigerants are bad, real bad, so we’ll start there. Getting accurate data will require you to track refrigerant type and pounds that have leaked per site. If HVAC systems are managed internally, the retailer should build data tracking into company policy, as well as create an IT database to capture the results. If services are contracted out, then a retailer should make sure that in the next contract renewal or negotiation that the maintenance partner is able and willing to track the refrigerant type and leakage by pound per system by location and delivered to you regularly. If they cannot, it’s time to reconsider your partner or apply some pressure.
Natural gas and gallons of fuel use is no different – details are needed. For natural gas, a company needs to track Mbtu used per month per location. As for transport fuel, miles traveled and fuel type vehicle need to be cataloged. Both of these are typically easier to track than refrigerants, but the challenge is having a streamlined system to track such data.
Scope 2: Preparedness for Indirect Emissions
If you are new to carbon management, the most important take away is that scope one and two are where the first wave of climate regulation will take hold. This is because the global warming potential from the operational activities within these two scopes are dramatic.
Scope two looks at the generation of emissions that result from purchased electricity by the organization that power all the systems and equipment within the store – lighting, computer and office equipment, HVAC, etc.
This is where the conversation around clean and renewable energy begins. Simply put, dirty energy and bad grids yield bad emission activity. As a retailer, buying clean energy has become a new standard behind corporate commitments and a strategic tactic for retailers tracking their emissions. For example, Whole Foods and Bed Bath & Beyond are dropping suppliers that source fuel from Canada’s oil sands, which have a higher carbon content than conventional crude oil.
So how does one get prepared for scope two? Again, it comes down to tracking hard data store-by-store and month-by-month. For scope two, the metric is kWh. Digging deeper is encouraged, and those retailers that have moved forward with sub-metering in new locations and retrofits are set up to report emissions for any process or plug load that is tracked by kWh. If the data is not being organized in a central database, the carbon footprint process will not be as easy as it could be.
Retail is already on board with the installation of sub-metering and EMS systems. Rarely will a new location or retrofit be built without them, but what about existing infrastructure, and in particular situations where CAM is the utility payment model? Here-in lies the challenge with retail today. As it stands, those companies without real kWh use data have to calculate their carbon emissions based on assumed data by prorating average kWh/per square foot to those spaces without real kWH data. This can lead to very inaccurate reporting and misleading results.
To help support tenant demand for more granular data, landlords like Simon Properties’ Energy Services department can now provide annual kWh use by store, either metered or calculated based on detailed field verified studies – assuming the tenant is using the operational control boundary. This marks a progressive evolution between tenant and landlord. As information exchanges like this become more prevalent, retailers will have a more clear understanding of their portfolio – we suggest that retailers begin discussing this service as part of upcoming lease renewals and commitments as a carbon preparedness tactic.
Scope 3: Preparedness for everything else and the kitchen sink
In the final scope of GHG protocol covers the resulting emissions that arise from sources that are owned or controlled by others. Because every retailer has its own unique real estate, product and operational footprint, each enterprise will measure a different set of scope three emission activities, making this scope one of the most challenging to manage and prepare for.
Scope three carbon emission assessments often include employee commute, business travel, product on your shelves, fixture and POP product, third-party product transportation, off-site waste disposal and every other activity down the supply chain. While scope three emission activities are typically unregulated – to date – companies should not dismiss the value that carbon management can yield to track and inform continuous operational improvement and savings per activity within this scope.
If I were to address all carbon preparedness tactics for typical operational activities in scope three, this would turn into a 200-page report, so for this column’s sake I’ll address a relevant activity for all retailers – waste.
Many retailers are surprised when they find that off-site waste disposal can have an emissions footprint greater than their electricity consumption. Case in point, consider the often overlooked organic waste that retailers dispose of everyday – paper, obsolete print collateral, POP, obsolete store fixtures and apparel, etc. All of these organic materials breakdown in a landfill emitting copious amounts of methane – which has 25 times the global warming potential compared to carbon. This puts all big organic waste producers such as quick service restaurants, apparel and heavy animation and graphic users at the highest level of risk.
Carbon preparedness around waste is multifaceted and requires several tactics to get moving in the right direction. As with anything, you begin with the assessment, then reduction tactics and finally, the dot connecting.
Assessing. Do you know what is in your waste stream? If you don’t – you should start. Keep in mind an assessment is not just looking in the break room trash bin or the paper waste from stockroom processing. It is about everything that goes out your typical store and into a dumpster. A smart tactic is one that is offered in the forthcoming LEED Retail rating system, which is to begin by identifying your top five waste streams and get programs in place to reduce.
Reduction. There is no need to belabor reduction we all know what it means, but after understanding your largest impact areas, appropriate reduction strategies can be put in place – unique to each retail type.
Dot-connecting. A new industry is emerging known as waste-to-profit networking. Masters of this science like G2 Revolution look at waste as a blank canvas – with endless second-life possibilities making new products from your own waste streams. You may not think of waste such as fixtures, sippy straws, broken hangers, and plastic wrap as a resource, but someone does.
Like scope one and two, scope three requires metrics and the variable for waste is the short ton. The math is pretty simple – the more you send to the landfill, the more resulting emissions. The more you reduce waste to landfill – the lower the resulting emissions. That being said, having a waste management system in place that tracks every detail of your waste stream is a very important step to carbon preparedness.
Waste has always been a liability for retail and surprisingly, most companies still have a very fragmented collection process in place. While understanding and measuring waste streams may seem like a daunting task, remember that behemoth retailer, Walmart began its zero-waste journey a mere three years ago. Currently they are anticipated to achieve this goal ahead of schedule.
Carbon as a Sustainability Guidance Counselor
Carbon management – taking an enterprise-wide snapshot of efficiencies and environmental impact, from supply chain and building to operations and maintenance – puts a metric to every part of the enterprise that you choose to measure enabling side by side comparison for performance evaluation. The benefit quickly becomes obvious to any retailer that executes a detailed carbon footprint inventory – as it uncovers the greatest environmental impact areas within the enterprise. However, the insight is only as good as the data you can get. Retailers are often surprised at the results and appreciate the clarity because it sheds light on areas they may have been spending resources to improve efforts that may not be their biggest liability through the lens of climate change. True insight requires real data and the first step to carbon management should be carbon preparedness efforts, not a fly-by-the seat inventory. Are you ready?
Justin Doak is a recognized thought leader in bringing sustainability to the retail environment. Many know Justin from his work at the U.S. Green Building Council where he managed the technical development of LEED Retail New Construction and LEED Retail Commercial Interiors green building platforms due for market launch this year. Today, as the Founder and CEO of Ecoxera, Justin works closely with retail industry leaders and major associations to grow brand and bottom-line through the implementation of strategic sustainability initiatives for developers, retailers, quick service restaurants, manufacturers and hoteliers.
Tasha Petty is a brand strategist and marketing guru. Tasha’s extensive marketing and communications experience includes writing for prominent journalistic publications, coordinating global communications for AMD, and marketing for commercial construction, interior design, and architecture with a focus on sustainability. At Ecoxera, she melds her passion for sustainability and knowledge of the retail market to create innovative, brand-differentiating campaigns that launch retailers to a leadership role in the sustainability space.