Transparency will help businesses communicate their approach to net zero

Cor­po­rate net zero tar­gets are announced week­ly and the rhetoric around net zero has reached fever pitch. How­ev­er, the chal­lenge is now turn­ing these words into actions. Many busi­ness­es are only just start­ing to look at their oper­a­tions more close­ly and decar­bonise, while oth­ers are real­is­ing that it’s going to require real tenac­i­ty to achieve their tar­gets.

There’s also a new real­i­ty set­ting in for most organ­i­sa­tions. The major­i­ty of their emis­sions are actu­al­ly along their val­ue chain — upstream sup­ply chain and down­stream prod­ucts in use – tack­ling these so-called Scope 3 emis­sions will, for many, be a mas­sive issue.

In fact, sup­ply chain green­house gas emis­sions can be 11 times as high as oper­a­tional emis­sions, accord­ing to non-prof­it the CDP. Reduc­ing emis­sions there­fore doesn’t stop at the head office — oper­a­tional emis­sions are just the tip of the ice­berg.

“Many com­pa­nies want to do the right thing but the con­trol they have on their over­all emis­sions can be lim­it­ed. It’s a real­ly big and tricky prob­lem but doing noth­ing is not an option,” explains Hugh Jones, man­ag­ing direc­tor, advi­so­ry at the Car­bon Trust, a glob­al, mis­sion-led organ­i­sa­tion that works with gov­ern­ments, investors, busi­ness­es and organ­i­sa­tions to accel­er­ate the deliv­ery of a sus­tain­able, low car­bon econ­o­my.

“Cor­po­ra­tions are going to have to inno­vate and make sig­nif­i­cant changes to their busi­ness mod­el in order to dri­ve progress. They will have to account for emis­sions across their full val­ue chain. Only through col­lab­o­ra­tion can busi­ness­es tack­le this chal­lenge.”

Many organ­i­sa­tions are engag­ing with their direct and mul­ti-tier sup­pli­ers in order to source prod­ucts with low­er emis­sions. Oth­ers are look­ing at alter­na­tive pro­duc­tion mod­els, involv­ing reman­u­fac­tur­ing, reuse and recy­cling of mate­ri­als and parts to cre­ate new prod­ucts. This is a move to a more cir­cu­lar econ­o­my, reduc­ing the need for raw mate­ri­als.

“We’ve seen a lot of this in the fash­ion indus­try with fibres for cloth­ing and in ICT with com­po­nents and equip­ment,” adds Jones. “There are also an increas­ing num­ber of indus­try-wide ini­tia­tives that are dri­ving change in sup­ply chains, while some big cor­po­rate buy­ers are now ask­ing their sup­pli­ers to decar­bonise as part of their pur­chas­ing cri­te­ria. For exam­ple, cer­tain super­mar­kets require their sup­pli­ers to com­ply with a range of envi­ron­men­tal cri­te­ria includ­ing tack­ling car­bon emis­sions.

“Oth­ers are set­ting up inno­va­tion cen­tres and des­ig­nat­ing staff specif­i­cal­ly to focus on this issue. The dial is shift­ing. Just look at the new job titles that are crop­ping up, such as ‘sus­tain­able sup­ply chain man­ag­er’ or ‘direc­tor of sup­ply chain inno­va­tion’. It’s a sign that this is being tak­en seri­ous­ly and is becom­ing part of the main­stream agen­da.”

The fight against cli­mate change will be won by those busi­ness­es that do things dif­fer­ent­ly. Set­ting tar­gets will not be enough. By mea­sur­ing their organ­i­sa­tion­al and val­ue chain car­bon foot­prints — and where appro­pri­ate the foot­print of a product’s full life­cy­cle — busi­ness­es can iden­ti­fy areas for inno­va­tion that will reduce emis­sions and also poten­tial­ly save mon­ey.

“Some organ­i­sa­tions are able to cut costs while they reduce emis­sions by tak­ing a more car­bon-cen­tric approach. Know­ing where your emis­sion hotspots are can help focus efforts and often prompt fun­da­men­tal shifts in busi­ness mod­els,” says Jones.

The Car­bon Trust has two decades of expe­ri­ence in the cli­mate change sec­tor and a glob­al team of more than 250 staff across five con­ti­nents. It has noticed grow­ing inter­est in prod­uct car­bon foot­print­ing and in its car­bon label, which cov­ers all green­house gas emis­sions released through­out a product’s full life­cy­cle. This ‘cra­dle-to-grave’ approach cap­tures emis­sions from the extrac­tions of raw mate­ri­als, through to man­u­fac­ture, dis­tri­b­u­tion, use and even­tu­al dis­pos­al. It can pro­vide strong trans­paren­cy for stake­hold­ers, includ­ing cus­tomers.

“We are see­ing grow­ing inter­est in this from a wide vari­ety of com­pa­nies, includ­ing food and bev­er­age com­pa­nies as well as oth­ers in pack­ag­ing and elec­tron­ics. They often want to mea­sure, reduce and com­mu­ni­cate the car­bon foot­print, and in some cas­es the car­bon neu­tral­i­ty, of their prod­ucts direct­ly to the con­sumer,” says Jones.

“A foot­print label is more tan­gi­ble for the gen­er­al pub­lic than long-term tar­gets and tra­jec­to­ries, vital though these are. A label has the pow­er to bring these issues into people’s every­day lives via their shop­ping bas­ket.”

A 2020 YouGov sur­vey com­mis­sioned by the Car­bon Trust of more than 12,800 con­sumers across the UK, US, Chi­na, France, Ger­many, Italy, Bel­gium, Spain, Swe­den and Mex­i­co found that 67% agree car­bon labelling is a good idea and 65% said they are more like­ly to think pos­i­tive­ly about a brand that had reduced the car­bon foot­print of its prod­ucts. 2021 YouGov research (yet to be pub­lished) found that 54% of inter­na­tion­al respon­dents would be more like­ly to pur­chase a prod­uct that had a car­bon label.

Danone brands evian and Volvic, plus Tetra Pak and Quorn, are among the many com­pa­nies already engaged in car­bon foot­print labelling. The aim is to dri­ve con­sumer demand for bet­ter prod­ucts, which can then align with cli­mate goals and emis­sions tar­gets. It also doesn’t mat­ter what coun­try the con­sumer is in, a glob­al­ly recog­nised label relat­ing to car­bon impacts at the com­pa­ny or prod­uct lev­el is a uni­ver­sal idea.

“We need much greater uptake of car­bon foot­print labelling in terms of mar­ket sec­tors and geo­gra­phies. There’s a huge oppor­tu­ni­ty for busi­ness­es who want to be seen as lead­ers in their field to com­mu­ni­cate their good work on tack­ling emis­sions through­out their val­ue chain with labelling. For a com­pa­ny to say they are green is one thing. It’s not quite as tan­gi­ble as a prod­uct with an inde­pen­dent­ly ver­i­fied car­bon label,” says Jones.

“If we get this right we will cre­ate a vir­tu­ous cir­cle of busi­ness activ­i­ty. More demand from con­sumers for low­er car­bon prod­ucts will dri­ve organ­i­sa­tions to address the emis­sions along their sup­ply chains, bring­ing every­one togeth­er both upstream and down­stream to deliv­er decar­bon­i­sa­tion. We need organ­i­sa­tions world­wide to be on board. Rais­ing con­sumer aware­ness will be a key dri­ver in reduc­ing emis­sions over time. Labelling can help make this change hap­pen.”

For more infor­ma­tion please vis­it www.carbontrust.com/labelling

Spon­sored by

The Car­bon Trust