February 2015 CORPORATE GHG INVENTORY & PRODUCT LIFE CYCLE CARBON FOOTPRINT ANALYSIS PROJECT REPORT GITS FOOD. Authors: cbalance Solutions Pvt. Ltd.

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1 CORPORATE GHG INVENTORY & PRODUCT LIFE CYCLE CARBON FOOTPRINT ANALYSIS PROJECT REPORT GITS FOOD Authors: cbalance Solutions Pvt. Ltd. February 2015 Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

2 Contents 1. INTRODUCTION 1 2. PROJECT OBJECTIVE 1 3. PROJECT SCOPE Scope Definition Corporate GHG Inventory Product Carbon Footprint 8 4. RESEARCH & ANALYSIS METHODOLOGY Site Visit and Data Collection Data Quality Assessment Allocation Calculation of GHG Inventory Scope 1 emissions Scope 2 Emissions Scope 3 Emissions RESULTS AND ANALYSIS OF LIFE CYCLE ASSESSMENT Results and analysis of Gulab Jamun Overall Scope wise Emissions Scope 1 Activity Emissions Scope 2 Activity Emissions Scope 3 Activity Emissions GHG Emissions by LCA stage Comparison and Overall LCA Stage-wise Emissions in % RESULTS AND ANALYSIS OF KHAMAN DHOKLA Overall scope-wise Emissions Scope 1 Emissions Inventory Scope 2 Emissions Inventory Scope 3 Emissions Inventory LCA Stage-wise GHG Emissions Comparison and Overall LCA Stage-wise Emissions in % RESULTS AND ANALYSIS OF RICE IDLI 30 Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

3 7.1 Overall Scope-wise Emissions Scope 1 Emissions Inventory Scope 2 Emissions Inventory Scope 3 Emissions Inventory LCA Stage wise Emissions Comparisons and Overall LCA Stage-wise Emissions in % RESULTS AND ANALYSIS OF DOSAI Overall Scope wise Emissions Scope 1 Activity Emissions Inventory Scope 2 Emissions Inventory Scope 3 Emissions Inventory LCA Stage wise Emissions Comparisons and Overall LCA Stage-wise GHG Emissions in % HOTSPOT ANALYSIS Gulab Jamun Khaman Dhokla Idli Dosai Product by product hotspot analysis of major life cycle stages CONCLUSION RECOMMENDATIONS TO REDUCE THE CARBON EMISSIONS Agriculture and raw materials input Raw materials: food and agricultural practices Raw materials: packaging Energy: renewables, energy efficiency, alternative energy Renewable Energy Technologies (supply side alternatives) Mobility: efficiency, alternate modes of transport Fuel additives for diesel and petrol vehicles Use of vehicles with alternate fuel Switching to sustainable marine transport companies Modification for auto-engine to increase mileage Consideration of alternative shipping routes 55 Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

4 Promoting the use of bicycles Consumer awareness and associated reduction of carbon emissions potential Implementation of Supplier Scorecard in operational processes and establishing of partnership with Suppliers LOW CARBON SCENARIO MODELLING APPENDIX Annexure B- Low carbon solutions & recommendations Energy: renewables, energy efficiency, alternative energy Heating, Ventilation and Air-conditioning (HVAC) Systems related Passive energy related interventions Lighting related Water Heating Water: conservation, usage efficiency, recycling Waste: reduction and management Consumable Materials: reduced embodied energy and carbon, reduced downstream impacts 72 Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

5 Table of Figures Figure 1 Activity Differentiation according to Scope 1, Scope 2 & Scope 3 GHG Emissions... 7 Figure 2: Research Methodology for Product Life Cycle GHG Emission Accounting & Reporting Figure 3: Steps for Data Collection and Verification Figure 4: Gulab Jamun: scope-wise emissions Figure 5: Gulab Jamun: scope-wise emissions Figure 6: Gulab Jamun: Scope 1 emissions Figure 7: Gulab Jamun: Scope 1 emissions Figure 8: Gulab Jamun: Scope 3 emissions Figure 9: Gulab Jamun: Scope 3 emissions Figure 10: Gulab Jamun: LCA stage wise emissions Figure 11: Gulab Jamun: LCA stage wise emissions Figure 12: Gulab Jamun: LCA emissions % Figure 13: Gulab Jamun: LCA emissions % Figure 14: Khaman Dhokla: Overall scope-wise emissions Figure 15: Khaman Dhokla: Overall scope-wise emissions Figure 16: Khaman Dhokla Scope 1 emissions Figure 17: Khaman Dhokla: Scope 1 emissions Figure 18: Khaman Dhokla: Scope 3 emissions Figure 19: Khaman Dhokla: Scope 3 emissions Figure 20: Khaman Dhokla: LCA stage-wise emissions Figure 21: Khaman Dhokla: LCA stage-wise emissions Figure 22: Khaman Dhokla: LCA emissions in % Figure 23: Khaman Dhokla: LCA emissions in % Figure 24: Idli: Overall scope-wise emissions Figure 25: Idli: Overall scope-wise emissions Figure 26: Idli: Scope 1 emissions Figure 27: Idli: Scope 1 emissions Figure 28: Idli: Scope 3 emissions Figure 29: Idli: Scope 3 emissions Figure 30: Idli: LCA stage-wise emissions Figure 31: LCA stage-wise emissions Figure 32: Idli: LCA emissions in % Figure 34: Dosai: Overall scope-wise emissions Figure 35: Dosai: Overall scope-wise emissions Figure 36: Scope 1 emissions Figure 37: Dosai: Scope 1 emissions Figure 38: Dosai: Scope 3 emissions Figure 39: Dosai: Scope 3 emissions Figure 40: Dosai: LCA stage-wise emissions Figure 41: Dosai: LCA stage-wise emissions Figure 42: Dosai: LCA emissions in % Figure 43: Dosai: LCA emissions % Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

6 Figure 44: Summary of GHG emissions per kg of product Figure 45: Gulab Jamun: Hotspot analysis % contribution of life cycle emissions to 1 kg of product Figure 46: Khaman Dhokla: Hotspot analysis % contribution of life cycle emissions to 1 kg of product Figure 47: Idli : Hotspot analysis % contribution of life cycle emissions to 1 kg of product Figure 48: Dosai: Hotspot analysis % contribution of life cycle emissions to 1 kg of product Figure 49: Sustainability Matrix (Source: IGD.com/sustainability) Figure 50: Emissions reductions through use of recycled carton Figure 51: Emissions reductions through use of renewable energy Figure 52: Emissions reduction through more efficient cooking and packaging disposal List of Tables Table 1 GHG Inventory Organizational Boundary Definition... 5 Table 2: GHG Inventory Operational Boundary Definition... 8 Table 3: Gulab Jamun: Hotspot analysis summary Table 4: Khaman Dhokla: Hotspot analysis summary Table 5: Idli: Hotspot analysis summary Table 6: Dosai: Hotspot analysis summary Table 7: Total emissions by product, year and life cycle stage Table 8: Low carbon alternative interventions Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

7 Acknowledgements This Life Cycle Carbon Footprinting Project has been executed through the efforts, domain expertise and strategic as well as technical mentorship and guidance provided by the following individuals from Best Food Forward, cbalance and the Reporting Entity (Gits Food) who worked seamlessly, enthusiastically, and competently together as the Project team to deliver a high quality of research, analysis and reporting to Gits Food. Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

8 Executive Summary The carbon Life Cycle Assessment was undertaken during 2014 by cbalance Pvt Ltd for Gits Food Products Pvt Ltd in order to ascertain the carbon footprint of its products and to map out next steps in reducing its organisational footprint. The four products- Gulab Jamun, Khaman Dhokla, Idli and Dosai- were selected from the Ready to Cook and Ready to Eat range, as the most representative in terms of the sample, since they represent the highest proportion of the firm s revenue and their ingredients composition impacts highly in terms of carbon emissions. The project activities included collection, collation, documentation, verification and analysis of all data related to activities contributing to the life-cycle carbon footprint of the aforementioned food products. The overarching goals of the assessment were to: - Estimate organizational GHG Inventory of the four products; - Assess product Carbon Footprint of the four products in accordance with GHG Protocol s Corporate Accounting and Reporting Standard and GHG Protocol s Product Life Cycle Accounting and Reporting Standard; - Provide high level recommendations to target carbon emission curbing; The findings included the average total greenhouse gas emissions (across two financial years , ) being 10,294 metric tonnes of CO 2 equivalent, ranging from 2.42 to 2.68 kg of greenhouse gas emissions per kg of each product (or kg of emissions per packet on average). The significant hotspot within the life cycle of each product turned out to be at the raw material procurement stage, contributing on average 63% of the total life cycle emissions. Second most intensive carbon hotspot was at the use of products by consumers (i.e. cooking, assumed to be done with the LPG) at 23% of the lifecycle emissions. The third hotspot was at the production stage (10.5%), mostly impacted by emissions from consumption of electricity. Given the above, relevant recommendations were provided to mitigate the impact of production and consumption of the products on the climate change. For instance, at the supplier level certain initiatives could lead to Scope 3 emissions reduction, including engagement with the milk and rice suppliers to carry out energy efficiency audits, encouraging switch to recycled/corrugated cardboard packaging material and installation of bio-derived fuel additives to all vehicles- an approximate possible mitigation of 1,127 metric tonnes of CO 2 equivalent. Furthermore, high growth rate forest plantation can lead to absorption of further emissions, neutralising the Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

9 operations of Gits Food from the carbon perspective: 36% of emissions mitigated through afforestation of 0.5 hectare per year. The next steps include greening of Gits supply chain through engagement with the direct suppliers (awareness raising at round-tables), internal and external communication and awareness building within the industry on the study, encouraging the competitors to follow suite, and internal operations stream lining by carrying out energy efficiency audits, which should contribute to further reduction in carbon emissions in the short to medium term. Finally, Gits Food has long been engaged in socially and environmentally responsible practices: - The company s payroll includes 65% women vs 35% men contributing to fairness and diversity in the workplace - 4.5% of the turnover is provisioned for social initiatives, including NGO partnerships, provision of schooling and college education, as well as healthcare initiatives - The operations use only 15% of the municipality-provided water, most of the water coming from the well (thereby reducing the greenhouse gas emissions associated with transporting of water from municipal sources) - There are further plans to focus on eco-friendly packaging, starting with nontoxic ink - Through close collaboration with suppliers and industry players, Gits hopes to transform the food industry in India, making it environmentally, socially and economically sustainable in the long term. Corporate GHG Inventory and Product Life Cycle Carbon Footprint Project Report- Gits Food

10 1. Introduction This project report has been prepared by cbalance Solutions Private Limited with the technical guidance from Best Food Forward, United Kingdom based organization. Gits Food is established in 1963 and has pioneered the convenience packaged food segment in India. Gits Food is amongst the first Food Product manufacturing companies in India to obtain ISO (Quality Standard) ISO (Food safety). Gits Corporate Office is situated in Mumbai whereas the plant is in Pune. Gits Food has already differentiated on quality and local credentials and is now considering differentiating on sustainability - starting with the efficiency of their own operations. Gulab Jamun, Khaman Dhokla, Idly & Dosai are the major products for Gits Food. These 4 products account to nearly 74% of the total production in local market whereas around 49% in foreign countries. This report seeks to quantify and provide a comprehensive overview of the carbon footprint of food products during their life phases (cradle to gate). This will facilitate the understanding of environmental impacts of a product at every stage of its life. This study will also help establishing the environmental benchmarks for the food specific studies in future. 2. Project Objective Gits Food has selected the four food products for this study. Selection has been made based on scale of strategic importance of the products (sales volume as aforementioned) and GHG intensity (high level rice composition). 1. Gulab Jamun 2. Khaman Dhokla 3. Idly 4. Dosai The project activities included collection, collation, documentation, verification and analysis all data related to activities contributing to the life-cycle carbon footprint of selected food products. The overarching goals of the Project were to: Establish baseline partial Product Life Cycle Carbon Footprint (cradle-to-gate) for a chosen product categories from the entire product portfolio Establish a cradle-to-grave carbon hotspot profile for selected product categories Determine Key Performance Indicators (KPIs) related to sustainability performance of the company with respect to energy, water, waste and supply and distributed network. 1

11 3. Project Scope Gulab Jamun, Khaman Dhokla, Idly & Dosai are the major products for Gits Food. Gits Corporate Office is based in Mumbai, with the manufacturing plant being based in Pune. Both locations have been included in the scope of the project. 3.1 Scope Definition Corporate GHG Inventory This GHG Protocol s Corporate Standard provides standards and guidance for companies and other types of organizations preparing a GHG emissions inventory. It covers the accounting and reporting of the six greenhouse gases covered by the Kyoto Protocol Carbon Dioxide (CO 2 ), Methane (CH 4 ), Nitrous Oxide (N 2 O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), and Sulphur Hexafluoride (SF 6 ). While this standard has been followed almost entirely for this project, the aspect of materiality threshold as defined by the concept of key categories has been incorporated from the 2006 IPCC Guidelines for National Greenhouse Gas Inventories. This is discussed as part of the Completeness attributes of the GHG Inventory and described later in the report. The standard requires adherence to the key principles of Relevance, Completeness, Consistency, Transparency, and Accuracy. These principles and measures taken to adhere to them in the execution of this project are discussed below. RELEVANCE: It must be ensured that the GHG inventory appropriately reflects the GHG emissions of the company and serves the decision-making needs of users both internal and external to the company. Relevance can be ensured by appropriate and thoughtful selection of Operational and Organizational Boundary (described later). The selection of an appropriate inventory boundary that reflects the substance and economic reality of the company s business activities, processes and relationships, not merely its legal form, is pivotal to this process and has been addressed in compiling the GHG inventory for the Gits Food Project. COMPLETENESS: The GHG inventory must account for and report on all GHG emission sources (i.e. Scopes) and activities (i.e. within each Scope) within the chosen inventory boundary and any specific exclusions must by disclosed and justified. Exclusions of activities from the Inventorying process may be the outcome of limiting constraints such as a lack of primary data, high uncertainty level of available secondary data, or the cost of gathering data. Theoretically a materiality threshold (a minimum emissions accounting threshold), stating that a source not exceeding a certain size can be omitted from the inventory, can be implemented to address unquantifiable emission sources. However, the practical implementation of such a threshold is not compatible with the completeness principle of the GHG Protocol Corporate Standard. Instead, companies must transparently document and justify cases where emissions have not been estimated, or estimated at an insufficient level of quality. 2

12 For the Gits Food Products GHG Inventory project, the concept of key categories has been adopted from the 2006 IPCC Guidelines for National Greenhouse Gas Inventories for implementability reasons. Key categories are identified using a predetermined cumulative emissions threshold. Key categories are those that, when summed together in descending order of magnitude, add up to 95 percent of the total level. The pre-determined threshold has been determined based on an evaluation of several inventories, and is aimed at establishing a general level where 90% of inventory uncertainty will be covered by key categories 1. The Operational Boundary for the Gits Food project s Corporate Inventory component is defined later with relevant rationale related to the inclusion of activities presented alongside. Moreover, any exclusions stemming from data constraints or other systemic reasons are listed and discussed in the Appendix. CONSISTENCY: The process of inventorying must use consistent methodologies across time boundaries to allow for meaningful comparisons of emissions over time. To enable this, a GHG inventory report must transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series. Thus, the inventorying process might require the base year emissions to be recalculated as companies undergo significant structural changes such as acquisitions, divestments, and mergers. Since the Corporate Footprint produced as an outcome of this exercise will serve as the Baseline Year GHG Inventory for the Gits Food, the need to recalculate any previous year emissions is moot. However, future inventories will need to address any recalculation efforts explicitly. TRANSPARENCY: All relevant issues must be addressed by the Inventory process in a factual and coherent manner, based on a clear audit trail. The reported activity must disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used. The standard requires information to be recorded, compiled, and analyzed in a way that enables internal reviewers and external verifiers to attest to its credibility and enable a third party to derive the same results if provided with the same source data. The project report addresses transparency related requirements by providing a comprehensive listing of all assumptions, simplifications, emission factor sources, and technical references in Appendix. along with relevant equations and mathematical and scientific relationships used data processing and analysis required for calculating GHG emissions. ACCURACY: The Corporate Standard requires that the quantification of GHG emissions is systematically neither over nor under actual emissions, and that uncertainties are reduced as far as possible. The process must be designed to achieve sufficient accuracy to ensure integrity of the reported information and enable users to determine its reliability with reasonable assurance. This project IPCC Guidelines for National Greenhouse Gas Inventories, Chapter 4: Methodological Choice and Identification of Key Categories 3

13 effort incorporated extensive efforts to ensure accuracy of the activity data obtained, collated and transmitted by the reporting entity through: a) administering rigorously designed data collection questionnaires, b) providing guidance to the entity with respect to best-practices to be followed for ensuring high data quality c) establishing the preferred units for data collection and suggesting acceptable surrogate units for activity data collection if data was not available in the ideally preferred form d) establishing a priority list of emission source activities for which primary data was imperative and activities for which secondary data would be acceptable The GHG Inventory process s accuracy is also augmented by use of well documented Tier 2 and Tier 3 GHG Emission Factors wherever possible and use of Tier 1 default emissions factors as the least preferred option 2. The emission factors used and their sources are presented in Appendix. The Corporate GHG Inventory accounts for three major Greenhouse Gases: Carbon dioxide (CO 2 ), methane (CH 4 ), Nitrous oxide (N 2 O). Emissions of these gases have been accounted for activities classified as part of Scope 1, Scope 2, and relevant significant Scope 3 emission sources. Emission sources leading to generation of the other 3 Kyoto Protocol Gasses, namely HFCs, PFCs, and SF 6, were not considered as key categories (or below the materiality threshold as defined earlier as part of the Completeness attributes of the project) by project s technical advisory team. Implementation of the Corporate Standard for GHG Inventorying requires definition of an Organizational and Operational Boundary Organizational Boundary Definition For corporate reporting, two distinct approaches can be used to consolidate GHG emissions: the equity share and the control approach. Equity share approach: Under the equity share approach, a company accounts for GHG emissions from operations according to its share of equity in the operation. The equity share reflects economic interest, which is the extent of rights a company has to the risks and rewards flowing from an operation. Control approach: Under the control approach, a company accounts for 100 percent of the GHG emissions from operations over which it has control. It does not account for GHG emissions from operations in which it owns an interest but has no control. Control can be defined in either financial or operational terms. When using the control approach to consolidate GHG emissions, companies shall choose between either the operational control or financial control criteria. Source: The Greenhouse Gas Protocol, A Corporate Accounting and Reporting Standard 2 The 2006 IPCC Guidelines for National Greenhouse Gas Inventories (Chapter 1: Introduction to the 2006 Guidelines) defines Emission Factor Tiers. A Tier represents a level of methodological complexity. Usually three tiers are provided. Tier 1 is the basic method, Tier 2 intermediate and Tier 3 most demanding in terms of complexity and data requirements. Tiers 2 and 3 are sometimes referred to as higher tier methods and are generally considered to be more accurate. Tier 1 methods for all categories are designed to use readily available national or international statistics in combination with the provided default emission factors and additional parameters that are provided, and therefore should be feasible for all countries. 4

14 The criterion for setting the Organizational Boundary for this Inventory is the Operational Control. The Standard stipulates that a company has operational control over an operation if the company or one of its subsidiaries has the full authority to introduce and implement its operating policies in the operations. According to this interpretation of operational control and based on discussions with the Reporting Entity s Management personnel, contractual activities at the production facility are entirely within the operational control of the Reporting Entity and hence 100% of the emissions from the activities are reported in this Inventory and are considered as emissions over which the Reporting Entity has 100% control. As an outcome of this approach selection, the operations and emissions-generating activities of the following Stakeholders / Operational Entities were considered to be within the GHG Inventory Boundary. Table 1 GHG Inventory Organizational Boundary Definition Life Cycle Stage Activities Major GHG Emission Sources Organizational Boundary Operational Boundary Purchased of Goods & Services Material Procurement Cultivation Logistics to warehouse Storage Logistic to upstream suppliers Direct & Indirect Energy Use, Water, Fertilizer, Pesticides, Chemicals, Land Use Direct Energy Use Indirect Energy Use Direct Energy Use Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Material Production Direct & Indirect Energy Use Within Boundary Scope 3 Energy (Fuel & Electricity) Procurement Extraction Production Fugitive Emissions Fugitive Emissions Within Boundary Scope 3 Within Boundary Scope 3 Tier 1 Suppliers, Third Party Inbound & Outbound Logistics Transportation & Distribution Air Travel Road Travel Rail Travel Marine Travel Storage in Warehouses Fugitive Emissions Direct Energy Use Direct Energy Use Direct Energy Use Direct Energy Use Indirect Energy Use Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 5

15 Waste Generation by third Party Landfilling/Composting Non Energy Waste Transportation Waste water Treatment Mobility Waste water Treatment Direct Energy Use Direct & Indirect Energy Use Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Business Travel Employee Travel Air Travel Rail Travel Bus Travel Automobile Travel Other Medium Accommodation in Hotels Air Travel Rail Travel Bus Travel Automobile Travel Other Medium Emission due to employees working from remote locations Direct Energy Use Direct Energy Use Direct Energy Use Direct Energy Use Direct Energy Use Direct & Indirect Energy Use Direct Energy Use Direct Energy Use Direct Energy Use Direct Energy Use Direct Energy Use Indirect Energy Use Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Leased Assets Downstream Transportation & Distribution Routine Operations Air Travel Road Travel Rail Travel Marine Travel Storage in Warehouses Direct & Indirect Use Direct Energy Use Direct Energy Use Direct Energy Use Direct Energy Use Indirect Energy Use Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Within Boundary Scope 3 Downstream Transportation & Distribution Disposal Cooking Waste Generation Direct Energy Use Non Energy Within Boundary Scope 3 Within Boundary Scope 3 6

16 Operational Boundary Definition Subsequent to organizational boundaries definition in terms of the operations that it owns or controls, The Corporate Value Chain Standard requires specifying of operational boundaries which entails identifying emissions associated with its operations, categorizing them as direct and indirect emissions, and choosing the scope of accounting and reporting for indirect emissions. Direct GHG emissions are emissions from sources that are owned or controlled by the company. Indirect GHG emissions are emissions that are a consequence of the activities of the company but occur at sources owned or controlled by another company. Furthermore, to improve transparency, and provide utility for different types of organizations three scopes (scope 1, scope 2, & scope 3) are defined for GHG accounting & reporting Scope 1: These are direct GHG emissions from sources that are owned or controlled by the company. For example, emissions from combustion in owned or controlled facilities and vehicles. Scope 2: These are indirect GHG emissions occurring as a consequence of GHG emissions from the generation of purchased electricity by the company. Scope 3: These comprise other indirect emissions except those accounted for as Scope 2 emissions. They are a consequence of the activities of the company, but occur from sources not owned or controlled by the company and are an optional reporting category. Examples include embodied carbon emissions from manufacturing of materials used by a company, third party deliveries, business travel activities and use of sold products and services. Source: The Greenhouse Gas Protocol, A Corporate Accounting and Reporting Standard The general framework for Operational Boundary setting is depicted below. Figure 1 Activity Differentiation according to Scope 1, Scope 2 & Scope 3 GHG Emissions 7

17 Source: Greenhouse Gas Protocol Product Life Cycle Accounting and Reporting Standard World Resource Institute The Operational Boundary for the Corporate GHG Inventory compiled as part of this Project is defined in the Table below. Table 2: GHG Inventory Operational Boundary Definition Emissions Category Emissions Sub-category Within Operational Boundary? Scope 1 Direct Energy Consumption Fuel Combustion & Refrigerants Captive Power Generation Yes Scope 2 Indirect Emissions Purchased Electricity Yes Purchased Water Yes 1 Purchased goods and services Production related Procurement Yes Non Production related Procurement No 2 Capital Goods Capital goods (Complete LCA) No 3 Fuel- and energy-related Upstream Emissions of Purchased Fuels, activities Electricity and T & D Losses Yes 4 Upstream transportation and Transportation of Purchased Products from distribution Tier 1 Suppliers & Storage in warehouses Yes 5 Waste generated in operations Solid Waste Yes (From Third Party) Wastewater & Waste Transportation Yes 6 Business Travel Business Travel & Accommodation Yes 7 Employee Commuting Employee Commuting Yes 8 Upstream leased assets Upstream leased assets Yes 9 Downstream transportation and Transportation, Storage in Warehouses & Yes distribution Retail Stores 10 Processing of Sold Products Processing of Sold Products Yes 11 Use of sold products Fuel Consumption Yes 12 End-of-life treatment of sold Waste generation Yes products 13 Downstream leased assets Downstream leased assets NA 14 Franchises Franchises NA 15 Investments Investments NA Scope With regards to the exclusions of contractual arrangements (leased assets and franchises) as well as investments, these are considered to be irrelevant to the company as they are either zero or do not represent a significant fraction of the company s activities (therefore unlikely to result in significant scope 3 GHG emissions) Product Carbon Footprint The GHG Protocol Product Life Cycle Accounting and Reporting Standard (referred to as the Product Standard) provides requirements and guidance for companies and other organizations to quantify and publicly report an inventory of GHG emissions 8

18 and removals associated with a specific product. The primary goal of this standard is to provide a general framework for companies to make informed choices to reduce greenhouse gas emissions from the products (goods or services) they design, manufacture, sell, purchase, or use. The primary goal of compiling a Product Life Cycle GHG Inventory as part of this project, to compliment the Corporate GHG Inventory, is to ascertain Carbon Hotspots in the Product Life Cycle to target future efforts at GHG mitigation along the entire Corporate Value Chain. The primary difference between the process of compiling Corporate GHG Inventory and assessing the Product Life Cycle GHG Inventory is the emphasis on Organizational & Operational Boundaries in the case of the Corporate Standard and the corresponding emphasis on classifying GHG emissions on the basis of Product Life Cycle Processes in the case of the Product Standard. Similar to the Corporate Standard, the Product Standard provides detailed guidance for the GHG Inventory process Product GHG Inventory Framework The Product Standard requires that companies shall account for carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), sulfur hexafluoride (SF 6 ), perfluorocarbons (PFCs), and hydrofluorocarbons (HFCs) emissions to, and removals from, the atmosphere. However, as explained in the prior sections related to the Corporate Inventory Boundary, only carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O) are accounted for in this Product Inventory. Defining the product, unit of analysis, and reference flow are imperative aspects of the Product Carbon Footprinting process. The unit of analysis is defined as the performance characteristics and services delivered by the product being studied. The reference flow is the amount of product on which the results of the study are based. The Standard requires that for all final products, companies shall define the unit of analysis as a functional unit (FU). For this project, since the product is a final product (i.e. a packet of ready-made meal to be consumed directly), the unit of analysis is defined as an individual final product (i.e. a kilogram of Idli, Khaman Dhokla, Gulab Jamun or Dosai produced and sold) and the reference flow is defined to be the mass of the food material and packaging, required to create that one kilogram of product. The standard requires inclusion of all attributable processes (i.e Scope 1 & Scope 2 emission sources) within the boundary of the product GHG inventory. As presented in the Life Cycle Boundary table below, all relevant Scope 1 & Scope 2 emission activities within the control of the Reporting Entity are included in the activity boundary. The Standard requires companies to disclose and justify any exclusions of attributable processes in the inventory report. These exclusions are the same as those presented for the Corporate Inventory and are presented in Appendix. 9

19 As required by the Standard, Companies are required to report the time period of the inventory which for this project is FY and FY Research & Analysis Methodology Figure 2: Research Methodology for Product Life Cycle GHG Emission Accounting & Reporting 4.1 Site visit and data collection 4.2 Data quality assessment 4.3 Allocation 4.4 Calculating GHG inventory The project activities commenced in May The goal, scope and project boundary setting spanned a-2 week duration. The subsequent data collection process took 2 months to complete. The post data collection analysis, secondary research, GHG inventory calculations, and reporting period lasted 8 weeks and concluded in the December Site Visit and Data Collection Three personnel from cbalance visited the Gits main office premises in Pune during the initial kick-off stage and during the data collection period. During the site visits cbalance personnel met with the company managers, Operations and Finance managers, allowing for collection of the required data from validated sources. Steps for data collection are represented diagrammatically below: 3 The project included staff handover at cbalance, therefore slightly extending the reporting period 10

20 Figure 3: Steps for Data Collection and Verification 1 Defined questionnaire according to GHG Protocol 2 Gits Food Pune main premises visit: office and production facilities 3 Checked data quality and completeness for FY , The data collection process commenced with devising and administering a questionnaire in alignment with data needs identified by the GHG Corporate Inventory and Product Life Cycle GHG Emission Accounting and Reporting Standard. The questionnaire (presented in Appendix A) encompassed all the previously mentioned organizational boundary stakeholders, related to all operational boundary activities, and comprised all product life cycle stage considered within the project boundary. 4.2 Data Quality Assessment Primary activity data related to emission sources was available to cbalance both through paper records and electronic records. The following exercises were carried out to ensure accuracy, completeness and reliability of data: cross-referencing of data from multiple departments, tallying bottom-up aggregated departmental data with centrally obtained business-unit level data, and other QA-QC processes. 4.3 Allocation Allocation of raw materials and other processes, including business travel, upstream and downstream transportation and logistics, was based on the total mass of each product produced and sold by the company, as a percentage of the total mass of all products manufactured and sold. 4.4 Calculation of GHG Inventory Scope 1 emissions As per the Life Cycle Carbon Footprint Operational Boundary (refer to Table 2) Scope 1 emissions include direct energy consumption activities, such as fuel combustion& energy and captive power generation. More specifically, the above activities focus on the three categories of fossil fuels, refrigerants and captive power generation. For Gits Food the major Scope 1 categories therefore include petrol and diesel marketing 11

21 team vehicles, diesel generator and LPG-cooking facilities for two products (Idli and Dosai). Furthermore, diesel generator falls into the category of captive power generation Direct Emissions from Fuel Combustion At Gits Food direct emissions comprise petrol and diesel vehicles owned by the company (2 are diesel, with 6 running on petrol), LPG-cooking facilities for Idli & Dosai, and diesel generator (captive power generation). Moreover, Scope 1 (direct emissions) reflected the GHG emissions arising from travel by petrol motorbikes of the sales and marketing team, since these emissions are then directly attributable to the four products. The estimation was made using average per km consumption in litres (here assumed to be 72 rupees per litre), multiplied by total spend in rupees. Wherever the data was provided in monetary terms, conversion into the appropriate activity data units (e.g. litre of fuel combusted) was made based on assumptions of expenditure trend (disclosed in the Appendix), prevalent at the time and pertaining to the company. The methodology for estimating direct emissions from fuel combustion was the following: Total emissions from fuel use Emissions GHG, fuel = Fuel Consumption Emission Factor Where, Emissions GHG, fuel= emission of a given GHG by type of fuel (kg GHG) Fuel Consumption = Amount of fuel combusted (Litre) Emission factor = Default emission factor of a given GHG by type of fuel (kg gas/litre) Direct Emissions from Refrigerants Fugitive emissions from intentional or unintentional releases, e.g. equipment leaks from joints, seals, packing, and gaskets; hydrofluorocarbon (HFC) emissions during the use of refrigeration and air conditioning equipment are accounted under Scope 1. Where the data of consumption was provided in monetary terms, conversion into the appropriate activity data units (e.g. kg of R22 consumed) was made based on assumptions of expenditure trend (disclosed in the Appendix), prevalent at the time and pertaining to the company. Refrigerant leakage emissions (fugitive emissions) are calculated based on the following methodology: 12

22 Emissions GHG, refrigerant= Refrigerant Consumption Emission Factor Where, Emissions GHG, refrigerant= emission of a given GHG for R22 type of refrigerant (kg GHG) Refrigerant Consumption = Amount of R22 refrigerant consumed (kg) Emission factor = Default emission factor of a given GHG for R22 (kg gas/kg refrigerant) Scope 2 Emissions Indirect Emissions from Purchased Electricity and Water Emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company fall under the Scope 2, Indirect Emissions (upstream activities). The method of calculating the total emissions from electricity use is the following: Emissions GHG, Purchased Electricity= Electricity Consumption (kwh) Emission Factor Purchased electricity Where, Emission Factor GHG, Purchased Electricity= Grid GHG Emission Factor for the Region (Maharashtra) The above calculation also applies to emissions from purchased water (replaced by the national emission factor for municipal water supply, multiplied by the number of litres consumed) Scope 3 Emissions Purchased Products & Services This category includes all upstream (i.e., cradle-to-gate) emissions from the production of products purchased or acquired by the reporting company in the reporting year. Products include both goods (tangible products) and services (intangible products). Cradle-to-gate emissions include all emissions that occur in the life cycle of purchased products, up to the point of receipt by the reporting company (excluding emissions from sources that are owned or controlled by the reporting company) Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard Purchased Products & Services category comprised primarily the purchase of Raw Materials, required for the production of the final four products- production-related purchases. The categories of purchased intermediate goods comprised: 13

23 Raw materials - Rice flour - Lentil flour - Salt - Sodium bicarbonate - Citric acid - Fenugreek powder - Wheat flour - Skim milk powder - Hydrogenated vegetable oil - Chickpea flour - Semolina - Rice - Urad dal powder Packaging - Plastic - Carton The quantities of the ingredients were based on the sales volume and sold mass of each product, as well as the recipe of each product (% share of each ingredient within the final product), rather than the total quantity of ingredients purchased by Gits, which avoids the disturbance from balance stocks at the beginning and the end of the year. The method of calculating the total emissions from purchased raw materials is the following: Emissions GHG, Raw Materials= Raw materials procured (kg) Emission Factor Raw materials Where, Emission Factor GHG, Raw Material= Relevant emission factor for a specific food or packaging category (e.g. wheat flour or plastic) Purchased Capital Goods This category includes all upstream (i.e. cradle-to-gate) emissions from the production of capital goods purchased or acquired by the reporting company in the reporting year Capital goods are final products that have an extended life and are used by the company to manufacture a product, provide a service, or sell, store, and deliver merchandise. In financial accounting, capital goods are treated as fixed assets or as plant, property, and equipment (PP&E). Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard The GHG protocol stipulates that companies are not required to include nonattributable processes, but can if they wish. In case with Gits Food the process is not assessed for GHG emissions, as the emissions are deemed to be immaterial in relation to, for example, purchased Raw Materials. This process may be included in the future, where more resources are made available to perform an in-depth assessment. 14

24 Upstream Energy (Fuel & Electricity) Emissions This category includes emissions related to the production of fuels and energy purchased and consumed by the reporting company in the reporting year that are not included in scope 1 or scope 2. Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard This category (also referred to as Supply chain later on in the report) considers fugitive emissions which are calculated taking into account the Scope 1 and Scope 2 activity data (consumption of diesel, electricity, LPG and petrol) thereby encompassing purchased fuels, electricity, and electricity T&D losses. Emissions GHG, Supply Chain= Fuel Consumption (litres, kg or kwh) Emission Factor Supply chain Where, Emission Factor GHG, Supply Chain= Relevant emission factor for a type of fuel and its corresponding fugitive emission rate (e.g. electricity transmission & distribution losses factor) Upstream Transportation & Distribution This category includes emissions from the transportation and distribution of products (excluding fuel and energy products) purchased or acquired by the reporting company in the reporting year in vehicles and facilities not owned or operated by the reporting company, as well as other transportation and distribution services purchased by the reporting company in the reporting year (including both inbound and outbound logistics). Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard Assessment of Upstream Transportation & Distribution has included tier 1 suppliers transportation and distribution (of raw materials) in the following categories: - Air transportation - Road transportation - Rail transportation - Sea transportation - Warehouse storage (accounting for electricity) Moreover, upstream transportation & distribution emissions included marine and road travel for export of products to retail warehouse across the globe, from which point on the products possession is taken over by the international retailers. The split of transportation and distribution by road is the following: - Purchase of raw materials from local suppliers (kg transported in distance in km) - Final products for local sale across India (kg transported in distance in km) - Final products for export sale (kg transported in distance in km) There are a total of 22 warehouses (CNFs) used for storage of the final Gits Food products, with no requirement for refrigeration. Thus, the only emission contributing 15

25 factor is the electricity used to light the warehouse facilities (allocated by product accordingly). The method of calculating the total emissions from upstream logistics and distribution is the following: Emissions GHG, Road transportation= Distance travelled (kg-km) Emission Factor Road transport Emissions GHG, Marine transportation= Distance travelled (kg-km) Emission Factor Marine transport Emissions GHG, Storage= Electricity consumed (kwh) Emission Factor Storage Where, Emission Factor GHG, Road transportation= Relevant emission factor for a road truck Emission Factor GHG, Marine transportation= Relevant emission factor for shipment by sea Emission Factor GHG, Storage= Emission factor for consumption of electricity Waste generated in operations This category includes emissions from third-party disposal and treatment of waste that is generated in the reporting company s owned or controlled operations in the reporting year. This category includes emissions from disposal of both solid waste and wastewater. Only waste treatment in facilities owned or operated by third parties is included in scope 3. Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard The following comprised this category which was accounted for in the emissions: - Vegetable waste (biodegradable) - Old Corrugated boxes (non-biodegradable) - Plastic (recyclable and non-recyclable non-biodegradable) - Cartons (recyclable and non-recyclable non-biodegradable) - Wastewater generated through production The waste GHG emissions contribution was calculation as follows: Emissions GHG, Waste= Waste produced (kg or litres) Emission Factor Waste Where, Emission Factor GHG, Waste= Relevant emission factor for a type of waste not recycled Business Travel This category includes emissions from the transportation of employees for business-related activities in vehicles owned or operated by third parties, such as aircraft, trains, buses, and passenger cars. Companies may optionally include emissions from business travelers staying in hotels. Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard 16

26 Business travel emissions, resulting from management business activities are spread across the categories of: domestic air, international air, rail, road (bus), car, domestic overnight stays, international overnight stays. Actual travel was measured in passenger kilometers, while the overnight stays were measured in number of nights. The calculations for air travel were made using average mileage approach, based on the provided trips data (in monetary terms and destinations). In order to calculate business travel in km by road/train/accommodation, company per-diem allowance for non-air travel expenses was used (the split provided was the following: travel (70%), accommodation (15%) and food (15%)). Further break-up of travel allowance was as follows: petrol motorbike (50%)- attributable to Scope 1 emissions as used by the marketing team, bus (15%), train (35%). The distances in km were further calculated from the monetary data using the standard coefficients of INR/km for a typical deluxe coach travel (here assumed to be 1.77 INR/km). The method of calculating the total emissions from Business Travel (Scope 3) is the following: Emissions GHG, Business Travel= Distance travelled (pass-km) Emission Factor Business Travel Emissions GHG, Hotel Stays= Nights stayed Emission Factor Hotel stays Where, Emission Factor GHG, Business Travel= Relevant emission factor for a passenger km travelled by air (domestic or international), rail, bus, car Emission Factor GHG, Hotel stays= Relevant emission factor for a 1 night stay at a domestic or international hotel property Employee Commuting This category includes emissions from the transportation of employees & between their homes and their worksites. Companies may include emissions from teleworking (i.e., employees working remotely) in this category. Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard Employee commuting was split as follows: - 48 staff split between Pune, Bombay, Kothrud, Pimpri offices - Of the above staff 22 use motorbikes, 3 used cars 6 days of the week 17

27 - Out of the other 300 staff staying within 5 km of the offices 25% would walk to the office, 5% arrive by bike, 70% take a bus Thus, distances in km were estimated using the above criteria. Subsequently, the emissions were calculated using the appropriate emission factors for each category of transport as follows: Emissions GHG, Employee commute= Distance travelled (pass-km) Emission Factor Employee commute Where, Emission Factor GHG, Employee commute= Relevant emission factor for a passenger km travelled by rail, bus, car, motorbike Downstream Transportation & Distribution This This category comprised includes emissions of the downstream from transportation logistics and and distribution transport of products (by road) sold from by warehouse the reporting stores company to retailers in the reporting and storage year between of the products the reporting for sale company s at the operations retail and the end consumer (if not paid for by the reporting company), in vehicles and facilities outlets (India-based only given the lack of data on the retail facilities abroad). not owned or controlled by the reporting company. This category includes emissions from retail and storage. Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard Transportation distance from the warehouses was calculated taking an approximate distance of each warehouse to the final sales outlet (city and state in India). In cases where export sales were made, the distances were calculated from the final city destinations overseas. Emissions from the retail outlet storage were allocated on the basis of given area, occupied by the Gits products (in metres and average number of days per year), multiplied by the number of distributors and the average electricity consumption per store (data available from TERI). This was subsequently multiplied by the relevant emission factor as illustrated below: Emissions GHG, Downstream transportation= Distance travelled (kg-km) Emission Factor Downstream transport Emissions GHG, Storage in retail stores= Electricity consumed (kwh) Emission Factor Storage in retail stores Where, Emission Factor GHG, Downstream transport= Relevant emission factor for a kg of product per km transported by road trucks Emission Factor GHG, Storage in retail stores= Relevant emission factor for kwh of electricity consumed across the retail stores 18

28 Use of sold products This category includes emissions from the use of goods and services sold by the reporting company in the reporting year. A reporting company s scope 3 emissions from use of sold products include the scope 1 and scope 2 emissions of end users. End users include both consumers and business customers that use final products. Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard The use of sold products refers to the cooking and preparation of the final sold products by the consumers. Almost all of the Indian households use the LPG as the means to prepare food, therefore it is assumed here to be 100%. Using the statistics on LPG usage in India from BIS, an estimate was made of LPG used per kg of Gits product, subsequently multiplied by a relevant emission factor as follows: Emissions GHG, Use of products= Consumption of LPGS (kg) Emission Factor GHG, Use of products Where, Emission Factor GHG, Use of products= Relevant emission factor for a kg of LPG consumed End-of-life treatment of sold products This category includes emissions from the waste disposal and treatment of products sold by the reporting company (in the reporting year) at the end of their life. This category includes the total expected end-of-life emissions from all products sold in the reporting year Source: Corporate Value Chain (Scope 3) Accounting and Reporting Standard It is assumed here that 10% of all packaging will be recycled after the final product use. The percentage was arrived at as a conservative estimate, given that the recovery rate of total paper and paperboard consumed is 27% according to this paper. Regarding the plastic component of packaging, given its limited utility, the recycling rate is reduced from the India average unorganized plastic recycling rate of 60%. Moreover, given that recycling rates differ greatly between countries (with many Gits products being sold abroad), the assumed rate used in the calculation has been lowered further. Thus the 90% of the packaging that the products are sold in is assumed to go to the landfill. The method of calculating the total emissions from End of life treatment is the following: Emissions GHG, End of life treatment= Packaging mass not recycled (kg) Emission Factor GHG, End of life treatment Where, 19

29 MT CO2e Emission Factor GHG, End of life treatment= Relevant emission factor for a kg of packaging material sent to the landfill 5. Results and Analysis of Life Cycle Assessment For all four products Scope 3 emissions prevail. This is due to raw material purchases (milk powder, wheat, rice, rice powder) having a substantial carbon footprint due to the nature of their production. Total raw materials (including packaging) carbon footprint range for all four products was at 43-54%. Scope 1 (direct and controllable emissions) comprises emissions from use of petrol cars (6 company owned) and motorbikes, used by the sales team. Recommendations on lowering the carbon footprint from car usage are provided in the section Conclusion and Recommendations. The positive practices implemented by Gits include high level of recycling of production waste (usually taken away by scrap vendors), thus emissions from waste production are close to zero (including wastewater emissions). 5.1 Results and analysis of Gulab Jamun 5.1 Overall Scope wise Emissions Figure 4: Gulab Jamun: scope-wise emissions Gulab Jamun Overall Scope wise Emissions Total Emissions = MT CO 2 e Scope 1 Scope 2 Scope 3 20

30 MT CO2e MT CO2e MT CO2e Figure 5: Gulab Jamun: scope-wise emissions Gulab Jamun Overall Scopewise Emissions Total Emissions = MT CO 2 e Scope 1 Scope 2 Scope Scope 1 Activity Emissions Figure 6: Gulab Jamun: Scope 1 emissions Gulab Jamun Scope 1 Activity Emissions Total Scope 1 Emissions = 91.3 MT CO 2 e Diesel Petrol LPG R Gulab Jamun Scope 1 Activity Emissions Total Scope 1 Emissions = MT CO 2 e 43.6 Figure 7: Gulab Jamun: Scope 1 emissions Diesel Petrol LPG R22 21

31 MT CO2e 5.3 Scope 2 Activity Emissions The scope 2 emissions for the year and have been largely due to electricity and is MT CO 2 e and MT CO 2 e respectively. 5.4 Scope 3 Activity Emissions Figure 8: Gulab Jamun: Scope 3 emissions Gulab Jamun Scope 3 Activity Emissions Total Scope 3 Emissions = MT CO 2 e

32 MT CO2e MT CO2e Figure 9: Gulab Jamun: Scope 3 emissions Gulab Jamun Scope 3 Activity Emissions Total Scope 3 Emissions = MT CO 2 e GHG Emissions by LCA stage Figure 10: Gulab Jamun: LCA stage wise emissions Gulab Jamun LCA Stage wise GHG Emissions Material Acquisition and Preprocessing Production 76 Distribution and Storage Use of Products End of Life Treatment Office footprint 23

33 MT CO2e Figure 11: Gulab Jamun: LCA stage wise emissions Gulab Jamun LCA Stage wise GHG Emissions Material Acquisition and Preprocessing 779 Production 91 Distribution and Storage 1741 Use of Products 252 End of Life Treatment 34 Office footprint 5.6 Comparison and Overall LCA Stage-wise Emissions in % Figure 12: Gulab Jamun: LCA emissions % Gulab Jamun LCA Emissions % % 0.70% 13.13% 0.41% Material Acquisition and Preprocessing Production 7.26% Distribution and Storage Use of Products 78.15% End of Life Treatment Office footprint 24

34 MT CO2e Figure 13: Gulab Jamun: LCA emissions % Gulab Jamun LCA Emissions % % 12.47% 5.58% 1.80% 0.24% Material Acquisition and Preprocessing Production Distribution and Storage Use of Products 79.26% End of Life Treatment Office footprint 6. Results and Analysis of Khaman Dhokla 6.1 Overall scope-wise Emissions Figure 14: Khaman Dhokla: Overall scope-wise emissions Khaman Dhokla Overall Scopewise Emissions Total Emissions = MTCO 2 e Scope 1 Scope 2 Scope 3 Scope 25

35 MT CO2e MT CO2e Figure 15: Khaman Dhokla: Overall scope-wise emissions Khaman Dhokla Overall Scopewise Emissions Total Emissions = MT CO 2 e Scope 1 Scope 2 Scope 3 Scope 6.2 Scope 1 Emissions Inventory Figure 16: Khaman Dhokla Scope 1 emissions Khaman Dhokla Scope 1 Activity Emissions Total Scope 1 Emissions = 18.6 MT CO 2 e Diesel Petrol LPG R22 26

36 MT CO2e MT CO2e Figure 17: Khaman Dhokla: Scope 1 emissions Khaman Dhokla Scope 1 Activity Emissions Total Scope 1 Emissions = 23.4 MT CO 2 e Diesel Petrol LPG R Scope 2 Emissions Inventory The major share of scope 2 emissions is from electricity and the emissions for the year are and are 94.6 MT CO2e and 84.3 MT CO2e. 6.4 Scope 3 Emissions Inventory Figure 18: Khaman Dhokla: Scope 3 emissions Khaman Dhokla Scope 3 Activity Emissions Total Scope 3 Emissions= MTCO 2 e

37 MT CO2e MT CO2 e Figure 19: Khaman Dhokla: Scope 3 emissions Khaman Dhokla Scope 3 Activity Emissions Total Scope 3 Emissions = MTCO 2 e LCA Stage-wise GHG Emissions Figure 20: Khaman Dhokla: LCA stage-wise emissions Khaman Dhokla LCA Stage wise GHG Emissions Material Acquisition and Pre-processing 161 Production 8 Distribution and Storage 290 Use of Products 36 End of Life Treatment 5 Office footprint 28

38 MT CO2e Figure 21: Khaman Dhokla: LCA stage-wise emissions Khaman Dhokla LCA Stage wise GHG Emissions Material Acquisition and Preprocessing 154 Production 10 Distribution and Storage 340 Use of Products 27 7 End of Life Treatment Office footprint 6.6 Comparison and Overall LCA Stage-wise Emissions in % Figure 22: Khaman Dhokla: LCA emissions in % Khaman Dhokla LCA Emissions in % % 3.01% Material Acquisition and Preprocessing Production 24.20% Distribution and Storage 0.65% 13.39% 58.34% Use of Products End of Life Treatment Office footprint 29

39 MT CO2e Figure 23: Khaman Dhokla: LCA emissions in % Khaman Dhokla LCA Emissions in % % 2.06% 0.51% Material Acquisition and Preprocessing Production Distribution and Storage 0.74% 11.93% 58.43% Use of Products End of Life Treatment Office footprint 7. Results and Analysis of Rice Idli 7.1 Overall Scope-wise Emissions Figure 24: Idli: Overall scope-wise emissions Idli Overall Scopewise Emissions Total Emissions = MT CO 2 e Scope 1 Scope 2 Scope 3 Scope 30

40 MT CO2e MT CO2e Figure 25: Idli: Overall scope-wise emissions Idli Overall Scope wise Emissions Total Emissions= MT CO 2 e Scope 1 Scope 2 Scope 3 Scope 7.2 Scope 1 Emissions Inventory Figure 26: Idli: Scope 1 emissions Idli Scope 1 Activity Emissions Total Scope 1 Emissions= 17.4 MT CO 2 e Diesel Petrol LPG R22 31

41 MT CO2e MT CO2e Figure 27: Idli: Scope 1 emissions Idli Scope 1 Activity Emissions Total Scope 1 Emissions= 19.7 MT CO 2 e Diesel Petrol LPG R Scope 2 Emissions Inventory The scope 2 emissions largely contributed by electricity are 85.7 MT CO2e and 67.9 MT CO2e for the year and respectively. 7.4 Scope 3 Emissions Inventory Figure 28: Idli: Scope 3 emissions Idli Scope 3 Activity Emissions Total Scope 3 Emissions= MT CO 2 e

42 MT CO2e MT CO2e Figure 29: Idli: Scope 3 emissions Idli Scope 3 Activity Emissions Total Scope 3 Emissions= LCA Stage wise Emissions Figure 30: Idli: LCA stage-wise emissions Idli LCA Stage wise GHG Emissions Material Acquisition and Preprocessing 146 Production 6 Distribution and Storage 263 Use of Products 41 End of Life Treatment 8 Office footprint 33

43 MT CO2e Figure 31: LCA stage-wise emissions Idli LCA Stage wise GHG Emissions Material Acquisition and Preprocessing 131 Production 7 Distribution and Storage 278 Use of Products 30 5 End of Life Treatment Office footprint 7.6 Comparisons and Overall LCA Stage-wise Emissions in % Figure 32: Idli: LCA emissions in % Idli LCA Emissions in % % 0.65% Material Acquisition and Preprocessing Production 0.51% 19.23% Distribution and Storage 11.56% 63.23% Use of Products End of Life Treatment Office footprint 34

44 MT CO2e MT CO2e 8. Results and Analysis of Dosai 8.1 Overall Scope wise Emissions Figure 33: Dosai: Overall scope-wise emissions Dosai Overall Scope wise Emissions Overall Emissions= MT CO 2 e Scope 1 Scope 2 Scope 3 Scope Figure 34: Dosai: Overall scope-wise emissions Dosai Overall Scope wise Emissions Total Emissions= MT CO 2 e Scope 1 Scope 2 Scope 3 Scope 35

45 MT CO2e MT CO2e 8.2 Scope 1 Activity Emissions Inventory Figure 35: Scope 1 emissions Dosai Scope 1 Activity Emissions Total Scope 1 Emissions= 11.7 MT CO 2 e Diesel Petrol LPG R22 Figure 36: Dosai: Scope 1 emissions Dosai Scope 1 Activity Emissions Total Scope 1 Emissions= 13.4 MT CO 2 e Diesel Petrol LPG R Scope 2 Emissions Inventory The Scope 2 Emissions for the year and for is MT CO2e with electricity being the major contributor to the emissions. 36

46 MT CO2e MT CO2e 8.4 Scope 3 Emissions Inventory Figure 37: Dosai: Scope 3 emissions Dosai Scope 3 Activity Emissions Total Scope 3 Emissions= MT CO 2 e Figure 38: Dosai: Scope 3 emissions Dosai Scope 3 Activity Emissions Total Scope 3 Emissions= MT CO 2 e

47 MT CO2e MT CO2e 8.5 LCA Stage wise Emissions Figure 39: Dosai: LCA stage-wise emissions Dosai LCA Stage wise GHG Emissions Material Acquisition and Preprocessing 98 Production 4 Distribution and Storage 176 Use of Products 38 End of Life Treatment 5 Office footprint Figure 40: Dosai: LCA stage-wise emissions Dosai LCA Stage wise GHG Emissions Material Acquisition and Preprocessing 89 Production 4 Distribution and Storage 189 Use of Products 23 4 End of Life Treatment Office footprint 38

48 8.6 Comparisons and Overall LCA Stage-wise GHG Emissions in % Figure 41: Dosai: LCA emissions in % Dosai LCA Emissions % % 19.79% 0.61% Material Acquisition and Preprocessing Production Distribution and Storage 0.39% 11.01% 63.97% Use of Products End of Life Treatment Office footprint Figure 42: Dosai: LCA emissions % Dosai LCA Emissions % % 0.43% Material Acquisition and Preprocessing Production 22.12% Distribution and Storage 0.49% 10.37% 63.94% Use of Products End of Life Treatment Office footprint 39

49 9. Hotspot Analysis This carbon footprint example includes use-phase emissions, as (cradle-to-grave approach) to provide Gits Food to with the hotspots of carbon emissions throughout the full life cycle of each of the four products. The figures reflected within the hotspot analysis are calculated based on the average emissions per packet/per kg across two financial years (FY , FY ) under examination. Identifying key hotspots Within carbon footprinting, hotspots are the most relevant inputs or phases influencing resource and energy use in the life cycle of a product, as they relate to climate impact. It is useful for identifying key areas which may require more in-depth analysis but cannot be used for comparing products as hotspots are a rough overview of relevant aspects of the product life cycle. Hotspots are identified per life cycle stage, for instance in case of Gits Food products life cycle assessment, milk powder is the most impacting input for the raw material life cycle stage, while for the transport life cycle stage, marine transport has a larger footprint than road transport. 9.1 Gulab Jamun The results of the carbon hotspot analysis for Gulab Jamun are presented below. The most significant life-cycle areas have been illustrated to provide a clear picture of the areas contributing the most to emission of greenhouse gases (GHGs) as a result of sourcing, manufacturing, using and disposing of products. The results are presented in the form showing the kg of CO 2 e emissions produced per kg of Gulab Jamun with respective ratios, given the total CO 2 e per kg of the product is kg (average across 2 years). Table 3: Gulab Jamun: Hotspot analysis summary kg CO2e per kg Material acquisition and pre-processing % Wheat Flour % Skim Milk Powder % Hydrogenated Vegetable Oil % Plastic % Carton % Tier 1-Road Travel % Tier 1-Marine Travel % Tier 1-Storage in Warehouse (Electricity) <1% Production % 40

50 Diesel % Petrol % R <1% Electricity % Municipal and Well Water <1% Fugitive emissions - Diesel <1% Fugitive emissions - Petrol <1% Fugitive emission - Electricity % Electricity T & D Loss % Waste <1% Distribution & Storage % Road Travel % Storage in Retail Stores (Electricity) <1% Use of sold products % End of Life Treatment % Office footprint % Domestic Air Travel <1% International Air Travel <1% Road Travel <1% Domestic Overnight Stays <1% International Overnight Stays <1% Employee commute Bus Travel <1% Employee commute Car Travel <1% Employee commute motorbike Travel <1% What is clear is that Raw Material component (Scope 3) contributes the most towards carbon emissions at a total of 52%. This is due to several elements: 1) skim milk powder contributes a total of 35% or more than a third towards the total emissions for 1 kg of Gulab Jamun; 2) wheat flour and carton each contribute 7% of the total emissions per kg of product. The reason behind skim milk powder is due to the sourcing and processing of dairy products- a food category naturally carbonintensive, unless the use of pesticides is excluded (resulting in a more organic nature of products) and more sustainable practices are implemented to reduce the process emissions. Carton used in packaging contributes highly to the overall footprint due to the change in land-use following reduction in tree mass, required for virgin carton production. Hence, usage of recycled cartons can help reduce the overall emissions significantly (refer to low-carbon scenario modelling section). Second, largest component is use of final product by consumers (Scope 3)- this refers to cooking of the Gulab Jamun using LPG stoves (most common way of cooking in Indian households). Although here Gits does not have direct control over the emissions, recommendations, geared towards consumers, in order to aid Gits Food 41

51 reduce the carbon footprint associated with this life-cycle stage of the product are given in the section Conclusion and Recommendations. Although the products undergo a full production cycle, emissions from the usage of water and waste production is minimal due to recycling that is implemented at the facilities (mostly use of powder which is reused, as well as packaging taken by scrap vendors). The company maintains own water well (thus with zero emissions) while municipal water does not contribute significantly to carbon emissions. Still, recommendations have been made to ensure maximum water efficiency is instilled at the company (e.g. through rainwater harvesting and grey water reuse). Upstream distribution, which includes road trucks distribution, marine travel and storage in warehouses, contributes further 10% towards product emissions with the largest component being road trucks, used to deliver both raw materials to the company production facilities, as well as deliver final products to the ports for shipping. The road trucks emissions are higher both in absolute and percentage terms for Gulab Jamun, in comparison with other products due to the higher proportion of Gulab Jamun products being shipped using truck transportation to Nepal. Electricity (Scope 2) contributes 7% of the total emissions per kg of product, due to the connection to the main national grid, where electricity is sourced primarily from coal (highly emission intensive fossil fuel), therefore switching to renewable energy sources will both reduce emissions from electricity and emissions from electricity transmission& distribution losses (2% of the total product emissions). Finally, with the business travel and employee commuting resulting emissions (Scope 1 and Scope 3) being minimal at product level, the company should still encourage use of public transport as well as more sustainable ways of travel, such as promoting the use of bicycles and trains, as this contributes significantly at the company and industry level. 9.2 Khaman Dhokla Table 4: Khaman Dhokla: Hotspot analysis summary kg CO2e per kg Material acquisition and pre-processing % Chick pea flour % Fine Semolina % Sugar % Salt % Sodium bicarbonate % Salt <1% Plastic % Carton % 42

52 Tier 1-Road Travel % Tier 1-Marine Travel % Tier 1-Storage in Warehouse (Electricity) % Production % Diesel % Petrol % R <1% Electricity % Municipal and Well Water <1% Fugitive emissions - Diesel <1% Fugitive emissions - Petrol <1% Fugitive emission - Electricity % Electricity T & D Loss % Waste Distribution & Storage % Road Travel % Storage in Retail Stores (Electricity) <1% Use of sold products % End of Life Treatment % Office footprint <1% Domestic Air Travel <1% International Air Travel <1% Road Travel <1% Domestic Overnight Stays <1% International Overnight Stays <1% Employee commute Bus Travel <1% Employee commute Car Travel <1% Employee commute motorbike Travel <1% The results are largely similar to those of Gulab Jamun analysis above, hence for detailed analysis refer to that section. Raw materials still make up the largest emission categories, with chickpea flour and semolina contributing the most. Regarding the upstream distribution and logistics, marine travel contributes 16% of emissions of the product, which is due to higher export sales of Khaman Dhokla abroad, with the percentage of Tier 1 supplier and distributor road truck logistics contributing a lower share of emissions at 3%. To compare with Gulab Jamun, which is primarily sold within India, marine travel component is higher due to distribution and sales of the Khaman Dhokla to customers abroad. 43

53 With the other categories once more contributing minimal share towards the product emissions, still recommendations should be reviewed to achieve overall lower company-level emissions. 9.3 Idli Table 5: Idli: Hotspot analysis summary kg CO2e per kg Material acquisition and pre-processing % Salt <1% Rice % Urad Dal Powder % Plastic % Carton % Tier 1-Road Travel % Tier 1-Marine Travel % Tier 1-Storage in Warehouse (Electricity) <1% Production % Diesel <1% Petrol % R <1% Electricity % Municipal and Well Water <1% Fugitive emissions - Diesel <1% Fugitive emissions - Petrol <1% Fugitive emission - Electricity % Electricity T & D Loss % Waste <1% Distribution & Storage % Road Travel <1% Storage in Retail Stores (Electricity) <1% Use of sold products % End of Life Treatment % Office footprint % Domestic Air Travel <1% International Air Travel <1% Road Travel <1% Domestic Overnight Stays <1% International Overnight Stays <1% Employee commute Bus Travel <1% Employee commute Car Travel <1% Employee commute motorbike Travel <1%

54 Once more, similar situation to the other 2 products, therefore reference should be made to analysis above (Gulab Jamun hotspot analysis). Raw material procurement contributes around one half of all emissions of 1 kg of Idli final product, with rice powder being the most GHG-intensive factor at 23% of the total GHG emissions for Idli. Use of sold products by customers and shipping by marine transport outside of India, and receipt of raw materials from abroad also remain largest contributors in terms of GHG emissions. 9.4 Dosai Table 6: Dosai: Hotspot analysis summary kg CO2e per kg Material acquisition and pre-processing % Salt <1% Rice flour % Lentils flour % Plastic % Carton % Tier 1-Road Travel % Tier 1-Marine Travel % Tier 1-Storage in Warehouse (Electricity) <1% Production % Diesel <1% Petrol % R <1% Electricity % Municipal and Well Water <1% Fugitive emissions - Diesel <1% Fugitive emissions - Petrol <1% Fugitive emission - Electricity % Electricity T & D Loss % Distribution & Storage <1% Road Travel <1% Storage in Retail Stores (Electricity) <1% Use of sold products % End of Life Treatment % Office footprint % Domestic Air Travel <1% International Air Travel <1% Road Travel <1% 45

55 Domestic Overnight Stays <1% International Overnight Stays <1% Employee commute Bus Travel <1% Employee commute Car Travel <1% Employee commute motorbike Travel <1% Due to the similar GHG emissions structure of the Dosai product to the other 3 products, please refer to the commentary sections of the above 3 products for detailed analysis. Figure 43: Summary of GHG emissions per kg of product Total GHG emissions per product mass (kgco2e/kg) Gulab Jamun Khaman Dhokla Idli Dosai 9.5 Product by product hotspot analysis of major life cycle stages 46

56 Figure 44: Gulab Jamun: Hotspot analysis % contribution of life cycle emissions to 1 kg of product 61% Hotspot analysis of Gulab Jamun (% contribution of life cycle GHG emissions to 1 kg of product) 23% 11% 1% 2% 1% Material acquisition and pre-processing Production Distribution & Storage Use of sold products End of Life Treatment Office footprint Figure 45: Khaman Dhokla: Hotspot analysis % contribution of life cycle emissions to 1 kg of product 62% Hotspot analysis of Khaman Dhokla (% contribution of life cycle GHG emissions to 1 kg of product) 23% 11% 1% 2% 0% Material acquisition and pre-processing Production Distribution & Storage Use of sold products End of Life Treatment Office footprint 47

57 Figure 46: Idli : Hotspot analysis % contribution of life cycle emissions to 1 kg of product 63% Hotspot analysis of Idli (% contribution of life cycle GHG emissions to 1 kg of product 22% 11% 1% 3% 1% Material acquisition and pre-processing Production Distribution & Storage Use of sold products End of Life Treatment Office footprint Figure 47: Dosai: Hotspot analysis % contribution of life cycle emissions to 1 kg of product 64% Hotspot analysis of Dosai (% contribution of life cycle GHG emissions to 1 kg of product) 21% 11% 0% 3% 1% Material acquisition and pre-processing Production Distribution & Storage Use of sold products End of Life Treatment Office footprint Note: the percentages may not add up exactly to 100% in their totality according to graphs due to rounding down of figures during calculations. Hotspots can highlight areas for carbon reduction improvements and help concentrate reduction efforts in those areas which are likely to see the greatest benefits. For recommendations focusing on highlighted and other areas refer to the section Conclusions and Recommendations. 48

58 10. Conclusion Although the purpose of this report is to focus on the carbon emissions of the four products, there are different aspects of sustainability that need to be considered alongside of the climate inducing emissions, such as waste production and consumption of water during, before and after the manufacturing process. These different aspects are shown in the figure below alongside the product life cycle stages. Thus the recommendations in the Appendix are also geared towards reduction of waste, better packaging alternatives and reduction of water as part of the overall sustainability programme. Figure 48: Sustainability Matrix (Source: IGD.com/sustainability) Total emissions by product, year and by life cycle stage can be gleaned from the table below. The table provides an overview, highlighting the most significant sources of emissions, as well as showing the emissions per packet or per kg of product, based on the production data. These emission indicators (kg of CO2e per packet or per kg of product) are split between two different types of carbon assessment carried out in this study: Hotspot analysis- taking into account all life cycle stages of a product; Cradle to gate assessment- including production and distribution only, excluding the carbon emissions arising from the usage of the product. 49

59 Table 7: Total emissions by product, year and life cycle stage Life cycle stage Activities Major GHG emission sources Gulab Jamun (tonnes Khaman Dhokla Idli (tonnes CO2e) Dosai (tonnes CO2e) CO2e) (tonnes CO2e) Material acquisition and preprocessing Production Procurement of food raw materials and packaging Upstream transport & distribution (from suppliers and to retailers) Use of fossil fuels, water and other resources in production Wheat flour Skimmed milk powder Hydrogenated vegetable oil Chickpea flour Semolina Rice Urad dal powder Rice flour Lentils flour Sugar Carton Plastic Tier 1 suppliers delivery by trucks Tier 1 delivery by sea freight Company owned petrol cars and marketing team petrol motorbikes

60 Distribution & Storage Supply chain Downstream logistics Company owned diesel cars and diesel power generator Purchased electricity Electricity transmission & distribution losses Truck transportation to warehouses Use of products Consumer use Cooking with LPG cookers End of life Office footprint Consumer disposal of waste Packaging waste to landfill Business travel Management and other business travel by air (international) Management and other business hotel stays (international) Subtotal Total emissions Hotspot analysis- Life cycle carbon footprint kg CO2e per kg of product kg CO2e per packet Cradle to gate- Life cycle carbon footprint kg CO2e per kg of product kg CO2e per packet

61 11. Recommendations to reduce the carbon emissions Gits has different levels of influence over the various product life cycle stages and the purpose of this section is to pinpoint the most obvious and perhaps easiest to implement strategies and processes to reduce the carbon footprint in the long run. For instance, within raw materials, a significant component of Gulab Jamun is skimmed milk powder. A slight re-formulation of the product which would not affect function, while reducing the amount of the raw material required, can allow for an overall reduction in GHG emissions associated with raw materials. The same principle can be applied to chick pea flour for Khaman Dhokla, rice for Idli and rice flour for Dosai Agriculture and raw materials input Raw materials: food and agricultural practices While specific recommendations can be applied to each ingredient constituting a high proportion of GHG emissions for the four products, a more general recommendation can be made at the overall company level with regards to the partnership with the suppliers. This step can become important in ensuring sustainability in the supply chain of Gits Food and ultimately lead to carbon reduction and reductions in cost of operations. For example, milk powder makes up a large proportion of one of the product s carbon footprint, while three quarters of the greenhouse gas emissions associated with milk are linked to the dairy farm, largely due to emissions of methane from dairy cattle. With a clear commitment from Gits to reduce carbon in its supply chain, it is possible to collaborate with the dairy farms directly, developing programmes to help dairy farmers to reduce their carbon emissions. Farmers can be provided with a set of best practice guidelines 4 with indicative carbon and cost savings, aimed at helping them reduce GHG emissions and save money (based on practices employed on the best performing farms). Example of such practices include sustainable practices in milk production: - Removing soya from the diet of low-yielding cows, saving the average farm 89 tonnes of carbon equivalent and over INR 2.4 lakh per year 5 with the minimal impact on the cow s milk yield. - In addition, workshops can be set up for farmers to discuss challenges and 4 cbalance can aid in providing a specific set of such guidelines 5 UK-based estimates 52

62 opportunities that arise from each farmer s specific situation. Further recommendations: - Promote livestock source organic fertilizer, procuring as much of organic stock as possible - Promote methane capture from livestock manure - Farmers to reuse straw for mulching or other purposes to reduce need for burning - Promote use of on-farm anaerobic digestion - Promote use of bio-fuels in farm vehicles Raw materials: packaging With regards to the use of packaging, increasing the use of recycled materials could substantially reduce the carbon footprint of plastic and carton packaging, research suggests. A new study of the life-cycle of plastic trays has shown that increasing the proportion of recycled material could lead to a significant reduction of greenhouse gas emissions. While plastic does not form the most significant component of packaging from the emissions point of view, the focus is to ensure increased usage of recycled carton (as opposed to using virgin material), but also gradually incorporating recycled plastic packaging (which would satisfy the hygiene criteria, as required for food production). Moreover, in order to reduce the overall usage of packaging an innovative design could be considered which reduces the amount of carton required per product without affecting the net weight of product (e.g. thinner and more lightweight packet). Such intervention would ultimately not only affect the emissions resulting from packaging, but also the total emissions throughout the supply chain and distribution, due to the reduced carried weight Energy: renewables, energy efficiency, alternative energy Renewable Energy Technologies (supply side alternatives) Solar Photovoltaic Systems Solar Photovoltaic (PV) can be used as source of renewable energy to reduce dependence on thermal-power dominated grid electricity and thereby reduce the Gits GHG emissions. 53

63 cbalance s recommendation is to establish energy benchmarking or ecolabelling of Solar PV system manufacturers to differentiate best-practice leaders (cbalance can also perform this exercise for Gits if required). Current global average energy payback or carbon payback period for Solar PVs is seen to be approximately 2.5 years of its lifespan but local producers are anticipated to have higher embodied GHG emissions and hence longer energy payback periods. Rapid adoption of monocrystalline Solar PV and its promising variants thin-film and BiPV should only be pursued following transparent disclosure of manufacturing practices and rejection of manufacturers that fail to meet industry best practice norms. The alternative (as considered in the low carbon scenario modelling section) is to switch the supply of grid energy from coal to renewable without the need for heavy investment in Solar Photovoltaic panels. Transmission & Distribution losses, however, would still be applicable in this case (thus the reduction in GHG emissions would be less than in the case with the PV panels) Mobility: efficiency, alternate modes of transport Fuel additives for diesel and petrol vehicles Use of bio-derived emissions-tested or ecolabelled fuel-additives is recommended to be used for all petrol and diesel vehicles owned/leased by the company with the aim of reducing the CO 2 e emissions with subsequent augmentation in fuel efficiency at 15% Use of vehicles with alternate fuel Direct energy conservation potential arises from switching to alternate fuel in vehicles that the company both owns and leases. For example, petrol and diesel run cars and vans can be switched to CNG. This can be also applied to the road trucks used in distribution and delivery of goods and will require stakeholder engagement with suppliers and distribution partners to promote the sustainable practices. Given the long-distance nature of the logistics, the GHG potential for saving is considerable Switching to sustainable marine transport companies 54

64 With marine transport impacting heavily Scope 3 emissions of Gits due to export operations, it is important to examine which companies are available at a similar cost but which have implemented sustainable policies to reduce their GHG emissions. With international shipping carrying more than 90% of global trade, maritime industries are coming under increasing pressure to make their operations more ecofriendly. Supplier charter can be demanded to make sure the supplier does their outmost to minimise their carbon footprint, which will ultimately reduce the indirect emissions of Gits Modification for auto-engine to increase mileage Modified auto engine assembly consists of additional air pre heaters, air intake line to the engine, and engine valve contrary to the conventional two-stroke engine which does not have valve. Part of the exhaust gas is utilized to heat the incoming air and some part is utilized to heat the mixture (air + fuel) before entry to the engine for complete combustion. Through evaluation of the heat recovery system the reported mileage increased by around 33% through the use of this technology. With the engine consuming 33% less fuel for every km, emissions reduction is calculated to be about 10 g CO2e per km driven, which have a significant impact for the sales force travelling by car. Moreover, this could be also recommended to the suppliers using truck deliveries. This recommendation has been taken into account in the Low carbon scenario modelling section to see how much can be saved in terms of emissions with specific reference to this study Consideration of alternative shipping routes Different shipping routes which can reduce the distance required to be travelled by road or by sea would significantly reduce the transport footprint (as depicted in the hotspot analysis section- Upstream logistics and distribution life cycle stage, ranging from 10% to 20%) Promoting the use of bicycles Although the number of employees commuting by motorbike or by car is low (40), for those employees living in the close proximity to the office, the use of bicycles should be encouraged. Moreover, the switch from bus use (210 staff) to daily biking can result yet in further emission cuts, with corresponding health benefits, which can contribute towards fewer sick days and subsequent reduced productivity losses at the company level. 55

65 If an assumed 15% of staff commuting to work by bus or motorbike switch to using bicycles, with half of the daily commuters by car switching to biking (out of 3 people), then an annual saving of 3.6 metric tonnes of CO 2 e will be mitigated, which translates into a substantial 36 tonnes over a course of 10 years. There are many different ways to implement an incentive system, ranging from high upfront investment schemes, where the company purchases a minimum number of bicycles, making them available on a monthly loan to its employees, to an effective campaign where employees are encourage to buy or share a bicycle (e.g. with a neighbour/friend), resulting in a small monthly bonus/benefit made available to the employee. An effective tracking system would then be required and consideration for tax-breaks (if available) Consumer awareness and associated reduction of carbon emissions potential For the end user behaviour change is a key way to reduce GHG emissions arising from the product use life cycle stage, although overall use of LPG is already one of the most efficient ways of cooking in terms of resulting GHG emissions. For example, the following initiatives do not require significant cash outflow to implement (with some element of business process transformation necessary) and can ultimately have a significant impact on the Scope 3 emissions (the highest in the analysis above). Gits should provide advice on packaging and through the company website, increasing consumer intelligence by communicating on: better use of products to reduce unnecessary energy usage, better advice on recycling and disposal of the constituent materials (for instance by composting, using companies such as Daily Dump to supply the necessary materials) o this can be done through insertion of a one pager (printed on FSC certified paper) which will also contain information on the initiatives undertaken by Gits in terms of measuring its ecological footprint. The 1 pager or even the packet itself can indicate the grams of CO 2 e per product. most energy efficient methods of food preparation, for example putting a lid on pot when boiling water, cooking on low flame, only boiling the appropriate amount of water and microwaving rather than oven cooking small quantities of reheatable meals etc. incentivising consumers to purchase more energy efficient products Moreover, customer feedback will need to be captured, with regards to their views on increased sustainability levels at Gits. Such initiatives may result in associated costs being passed on to the consumers, therefore it is imperative that Gits is aware 56

66 of consumer reaction. This can be captured via an interactive app (to automate the feedback process), which cbalance can help build and implement. In terms of fuel efficiency gains when already cooking with LPG, still significant reductions are possible, translating into lower GHG emissions. For example, experiments conducted have revealed a saving of 25% fuel when the flame was reduced after boiling had started. Furthermore, using the small burner of the stove consumes 6% to 10% less gas than the big burner. The use of higher efficiency ISI marked LPG stove (the thermal efficiency level of which is 68%+) saves up to 15% of gas. Other good practices such as using only clean cooking vessels, using a clean burner, putting the lid on to avoid heat losses, using shallow and wide vessels for cooking- all can contribute further 6%-10% of fuel saving. To further maximise efficiency of the cooking process by the final consumers, usage of solar cookstoves can be recommended, although a suitable low-cost alternative is required for consumers to replace their LPG cookstoves Implementation of Supplier Scorecard in operational processes and establishing of partnership with Suppliers Scorecard process of assessing and selecting suitable suppliers which can help contribute towards reducing Gits Scope 3 emissions is recommended to be implemented for review of the existing and selection of any new suppliers. Vendor scorecards strengthen supply chain relationships and help focus your suppliers on what matters most to you. Scorecards set goals for your vendors to reach for so they can become your vendor of choice. You can clearly see where each vendor ranks against each other, which helps you decide which supplier to work with on complex projects. When it comes to suppliers, they can represent critical partners in improving the environmental sustainability of Gits end-to-end supply chain. The scorecard with its Key Performance Indicators (KPIs) helps measure and track supplier performance on dimensions important to Gits- in this case carbon footprint and overall sustainability management. Key Process Indicators can be used in measuring level of suppliers eco and sustainable credentials, which can contribute towards Gits ecological footprint, and these indicators need to be selected carefully, so as to present a coherent and complete picture without raising the complexity levels. Such supplier scorecards can be used within the organisation not only for selecting eco-suppliers, they can also be helpful in maximising supply chain efficiency with the focus on areas such as Quality, Product Development, Payment terms, Product Pricing, Weighted Average Lead Time. For further advice on constructing a suitable Supplier Scorecard kindly reach out to cbalance Pvt Ltd. Example of the Supplier Scorecard form, modelled on that of Procter & Gamble, is 57

67 given below: Table 8: Example of a Supplier Scorecard Core Measure 2015 (Current Year) 2014 (Past Year) Jan - Dec Jan - Dec (Electric) Energy Usage (Fuel) Energy Usage (Input / Withdrawal) Water Usage (Output / Discharge) Water Usage Hazardous Waste Disposal Non-Hazardous Waste Disposal Kyoto Greenhouse Gas Emissions Direct (Scope 1) Kyoto Greenhouse Gas Emissions Indirect (Scope 2) Fines & Sanctions Environmental Mgt. System Scope Data Scope Data Optional Measure Renewable Energy Kyoto Greenhouse Gas Emissions Indirect (Scope 3) Potential Waste Material Recycled, Reused, Recovered Transportation Fuel Efficiency (Transportation Suppliers Only) Furthermore, in addition to the above scorecard approach, suppliers of Gits can be requested to perform energy audits with appropriate follow ups to ensure the most optimal energy consumption, reduction of energy and carbon emissions where possible, as well as water and waste saving opportunities are taken advantage of. Such collaborative efforts ensure that the positive impact that organisations and businesses can have on the environment will be maximised further! 58

68 12. Low Carbon Scenario Modelling This section depicts possible savings in terms of greenhouse gases emitted throughout various lifecycle stages of the four products based on the total average emissions across FY and FY Assumptions have been noted down and are purely indicative, were the company to undertake the interventions and initiatives as mentioned in the recommendations section. For further details on each intervention, please refer to the section Recommendations of the report. Emissions offsetting The combined GHG emissions to be neutralized from four products are approximately 10,294 tonnes CO2e annually. The option is given below to offset the full emissions of the four products through high density afforestation. Table 9: Low carbon alternative interventions Transport Electricity and power usage Greening of the supply chain Intervention Fuel efficient road -transport vehicles through modification of auto engine, leading to 33% increase in mileage Use of bio-derived emissionstested or ecolabelled fueladditives for all petrol and diesel vehicles owned/leased by the company. Switch to renewable energy (for example through purchasing of solar power and wind) Milk farms/milk powder suppliers carry out energy audits and implement energy saving initiatives Rice and rice powder suppliers integrate energy efficient practices GHG Scope Carbon Savings (MT CO2e average per 100% switch to organic wheat 3 26 Assumptions year) 1 16 Only company owned cars are taken into account, thus there is greater scope to reduce supply chain emissions by collaborating with the suppliers 1 29 Includes company owned cars as well as the motorbikes used by the sales team % switch to renewable energy supply of power (where emissions from T&D losses and fugitive emissions are still present) Assume a conservative rate of possible reduction of 10% (due to limitations of implementation) 3 59 Assume a conservative rate of possible reduction of 15% (due to limitations of implementation) Use of Recycled materials in production Use of recycled/corrugated and composted cartons for packaging of products Gits is using virgin carton paper, received from its suppliers 59

69 Behavioural Change Consumer Level Efficient cooking practices communicated on the product packaging: reducing flame, small Burner and high efficiency LPG Burners Increased consumer packaging recycling ratereminders communicated through packaging Total annual carbon emission savings possible with the above interventions Saving as a % of total average annual product lifecycle emissions for Gulab Jamun, Khaman Dhokla, Idli and Dosai Assume a conservative consumer uptake (perhaps initially) at 20%. Assume only some practices are followed thus only reducing LPG consumption by 25% (As opposed to 54% potential) 3 27 Initial recycling rate assumed to be 10%. Through consumer awareness raising this rate increases further by 10% MT 2,120 High Growth Rate Forrest Plantationmitigation option Maximum mitigation scope 10,294 Metric tonnes per year Sequestration Rate with Miyawaki Method 6 7,500 Metric tonnes Avoided emissions with 0.5 hectare afforestation a year Avoided emissions with 1 hectare afforestation a year 21% CO2e/lifetime/hectare 3,750 36% 7,500 72% The above analysis shows that with only a few interventions it is possible to achieve a significant reduction in both directly controllable (Scope 1) and indirect emissions (Scope 2 and Scope 3) of Gits. Taking into account that some interventions require upfront investment, further analysis (Marginal Abatement Cost Curve analysis) needs to be carried out in order to establish the most financially viable ways of reducing product life cycle greenhouse gas emissions. However, initial review above does show that relatively inexpensive ways can still lead to substantial emission reductions (such as switching to recycled/composted carton for packaging or promotion of efficient cooking and disposal practices by consumers). 6 The Dr. Miyawaki Method is a rapid forest growth method that works according to the principle of Potential Natural Vegetation and involves planting of native specifies in high density grids of 300 trees per 100 sq.m. It is estimated that this method could sequester approximately 7,500 tonnes / hectare during an assumed lifespan of 25 years. Estimation is based on 10 kg CO2e/year sequestration capacity per tree and 25 year lifespan, leading to 0.25 tonnes CO2e sequestration during the lifetime of a typical mid-growth stage tree 60

70 Figure 49: Emissions reductions through use of recycled carton Figure 50: Emissions reductions through use of renewable energy Total annual emissions from renewable electricity (grid) (MT CO2e) 1,500 1,000 1, Grid electricity (current) 440 Grid electricity (renewable) 61