Product Carbon Footprinting: Assessment, standard development and application

Transcription

1 Product Carbon Footprinting: Assessment, standard development and application Sujeesh Krishnan NSF Conference: Session 1: Supply Chain Carbon Footprint Measurement Washington DC, October 14 th 2010 This presentation should be used for your information only, and you are not permitted to reproduce it for dissemination to any third party. Whilst reasonable steps have been taken to ensure that the information contained within this presentation is correct, the presenter, the Carbon Trust, its agents, contractors and sub-contractors and the Government give no warranty and make no representation as to its accuracy and accept no liability for any errors or omissions.

2 Agenda Carbon Trust overview Introduction to product carbon footprinting Benefits of product carbon footprinting Case studies Carbon Trust services Conclusions

3 The Carbon Trust Our mission is to accelerate the move to a low carbon economy Independent not-for-profit company backed by UK Government with offices in the UK, US and China Business-minded approach to deliver cost-effectively with 9 years experience o Worked with over 30,000 companies o Since 2001 helped customers cut 29 million tonnes of C02 and save $4.1 billion Cutting carbon emissions now By providing business and the public sector with expert advice, finance and accreditation By stimulating demand for low carbon products and services Cutting future carbon emissions By developing new low carbon technologies through project funding and management, investment and collaboration By identifying market failures and practical ways to overcome them Insights Solutions Enterprises Investments Innovations

4 Agenda Carbon Trust overview Introduction to product carbon footprinting Benefits of product carbon footprinting Case studies Carbon Trust services Conclusions

5 What is product carbon footprinting? 5 Innocent Smoothies

6 What about transport miles? BUT Cutting transport miles is important Transport miles is a poor indicator of the overall impact Walkers 34.5g Cheese & Onion Innocent 250ml Mango & Passion Fruit Total = 75g CO2e Disposal: 2% Distribution: 10% Packaging: 34% Manufacturing: 17% Growing: 34% Total = 294g CO2e Disposal: 2% Distribution: 10% Smoothie-making: 21% Making the packaging: 30% Raw materials transport: 14% Growing & Packing: 23% Source: Carbon Trust

7 Analysis generates the carbon footprints and identifies areas of carbon emissions reduction kg CO 2 / kg product CO 2 emissions per kg product consumed Product C Disposal Use Distribution Manufacture RM Distribution Raw Materials High Impact on carbon emission levels Low Low Replacement of fossil fuels with clean energy sources in Shift product manufacturing portfolio towards less carbon intensive products Increase use of gas versus electricity Upgrade to less energy intensive manufacturing technology Smaller opportunities, e.g. distribution re-engineering Commercial alignment Reduce moisture content of raw materials Zone of feasible opportunities High ILLUSTRATIVE Source: Dummy Data

8 Measurement based on the life cycle approach using PAS 2050 as the underlying guidance PAS 2050: Specification for the assessment of the life cycle greenhouse gas emissions of goods and services Provides an agreed method of assessing product GHG emissions Common approach to supply chain carbon assessment Links to existing (ISO , & 14025) standards PAS 2050 was co-sponsored by the Carbon Trust and the UK Department for Environment, Food and Rural Affairs (Defra) Steered by independent steering groups of academics, NGO, government and business Specialist working groups Consultative process with feedback from over 1000 national and international stakeholders (including several hundred from the US) The Carbon Trust supported additional activities Tested of draft PAS with 20 pilot companies Establishing expert workgroups on specific topics Code of Good Practice, Guidance and Business case The Carbon Trust sponsored a pilot accreditation for six verifiers though UKAS.

9 International penetration of PAS 2050 (internet downloads) 9 PAS 2050 received input from over 40 countries during its development. PAS 2050 has been downloaded over 21,000 times in over 100 countries. (Direct downloads only; does not include informal distribution: eight months to March 2010)

10 Reduction & Communication Guidance Development of Code of Best Practice for Reduction and Communication Developed to promote further consistency in carbon footprinting Details reporting requirements and viable claims Requirements for demonstrating reduction over time, including banking What does a meaningful carbon footprint reduction look like? Absolute targets: XgCO2e or X% Business systems & management How should the information be communicated? Where?: On pack, point of sale, website, annual report, other What?: Current footprint, historical reduction, intent to reduce, other How?: numbers, rounded numbers, traffic lights, A-G, Guidance for PAS implementation Aimed at the non-expert; Facilitates implementation of the PAS

11 Supporting international standards & guidance development activities Standards Development PAS 2050 WRI/WBCSD ISO Review Working to ensure that there is consistency between the different initiatives. Sector Guidance Development Currently working with:

12 The benefits of a single standard Standardisation means common approaches to key questions in product GHG assessment. For example: which greenhouse gasses should be included? This may appear trivial, but different decisions will fundamentally alter the results for similar products Where results are disclosed publicly, such an approach would result in confusion Standardisation delivers benefits for organisations Simplified implementation Common assumptions and boundaries Supports data transfer though the supply chain Clearer understanding and improved comparability when publicly disclosed The beginnings of international harmonisation towards a common approach can already be seen Innocent smoothies example Chinese manufactured products sold in Europe Multinational companies evaluating implementation Other export-led countries looking for a single solution

13 Consistency simplifies information transfer and comparability An internationally accepted method for assessment will support the transfer of information between businesses This transfer of historical information improves accuracy and comparability, but it can only happen if all stages in the supply chain use the same method of assessment Business to business Business to consumer The addition of future downstream emissions information delivers the carbon footprint seen by consumers

14 Agenda Carbon Trust overview Introduction to product carbon footprinting Benefits of product carbon footprinting Case studies Carbon Trust services Conclusions

15 Business benefits of product carbon footprinting Opportunity for companies to identify and reduce carbon emissions across the supply chain Cost savings opportunities throughout the supply chain (e.g. waste, energy, materials, logistics savings, etc.) Minimizing risk Price volatility/supply risk arising from energy security/changes in climate Possible carbon legislation Shareholder, stakeholder, customer, consumer, and media scrutiny Opportunity to differentiate company/brand/products and be seen as market leaders through credible communication (external certification/carbon Reduction Label) Develop more long-term collaborative relationships with suppliers Internally helps to motivate employees and provides know-how to design low-carbon, innovative and sustainable supply chains and product portfolios

16 Examples of companies deriving both emissions reductions and supply chain related cost savings Walkers, a potato chip manufacturer owned by PepsiCo: Identified $1.8MM per annum savings in the supply chain 7% reduction in product carbon footprint from: Reduced energy consumption in manufacturing Simpler packaging Better logistics Innocent Smoothies, a smoothie maker: 55% reduction in carbon emissions Cost saving from 14% reduction in materials by: Switching to 100% recycled plastic bottles Working with suppliers reduce land-filled waste Trinity Mirror, a newspaper publisher: Identified $2.3MM cost saving Carbon savings of 10,000 tonnes by using: Recycled paper Lower emission energy sources for manufacturing

17 Increasing Customer / Stakeholder Expectations Customers are increasingly starting ask for metrics E.g. Wal-Mart Packaging Supplier Scorecard Supply chain emissions reductions programs that retailers like Wal- Mart are developing Stakeholders and NGO are increasingly scrutinizing company actions, external reports E.g. CERES, WBCSD Investment banks as part of risk assessments Investors as part of investment decisions SEC ruling that requires public companies to disclose climate related risks and opportunities Executive order requiring all federal agencies to use environmentally preferable products and services (impacts over 600,000 suppliers) US EPA requiring carbon emissions reporting from the largest emitters (over 10,000 facilities with emissions greater than 25,000 metric tonnes of C02-e annually)

18 Agenda Carbon Trust overview Introduction to product carbon footprinting Benefits of product carbon footprinting Case studies Carbon Trust services Conclusions

19 Boots & Continental Clothing Boots: Shampoo UK s leading pharmacy chain 8 shampoos, 4 packaging types and 2 distribution options 90% of footprint from consumer use Identified 33% savings opportunities in supply chain Boots implemented 20% 10%: recycled bottle 10%: distribution upgrade Working with the Carbon Trust has enabled Boots to measure and subsequently reduce the carbon footprint of everyday products such as shampoo by as much as 20 per cent. With Boots as the most trusted brand in the UK, providing this information and advice to customers on reducing personal carbon footprints will raise public awareness about the part we can all play in combating climate change and protecting the environment. - Andrew Jenkins, Sustainable Development Manager, Boots Continental Clothing: T-shirts B2B wholesaler of clothing for corporate, leisure and promotional wear Footprinted supply chain of 7 t-shirts & tops Sponsored building of wind farm to power the India factory Yielded 90% saving to the B2B carbon footprint As the first business to business (B2B) company to work with the Carbon Trust to footprint textile products, we have seen first-hand the benefits that this can deliver when talking to customers such as Adili.com who demand rigorous environmental standards within their supply chain. I believe other brands and retailers will greatly benefit from joining the carbon labelling scheme at this early stage, and show leadership and social responsibility. - Phil Charles Gamett, Director, Continental Clothing

20 PepsiCo Walkers: Potato Crisps Footprinting has had a positive impact on opinion about Walkers Walkers cut footprint by 7% (savings of $600K) in 2 years Reduction in mfg. gas (40%) and electricity (35%) Source: Millward Brown 10% from light-weight corrugate boxes 5% from transport - bio fuel, reduced mileage, fuel efficiency 5% from packaging changes 2%from product distribution efficiencies "We're delighted that Walkers is the first company to retain the use of the Carbon Trust's Carbon Reduction Label, as consumers have told us that they welcome the Label and the commitment it represents. The 7% reduction is a joint achievement with our suppliers and Walkers will be building on this achievement as part of PepsiCo UK's wider commitment to reduce energy consumption by 20% by 2011." - Salman Amin, President of PepsiCo UK & Ireland

21 Agenda Carbon Trust overview Introduction to product carbon footprinting Benefits of product carbon footprinting Case studies Carbon Trust services Conclusions

22 Carbon Trust s footprinting related service offerings Measurement Advisory Services Certification* Reduction Communication Expert advice and peer review for reduction-oriented value-chain carbon measurement for products, product categories, or product portfolios Toolkit for measurement efficiency Standard Guidelines for measurement consistency and accuracy Carbon Footprint Training Independent certification to ensure measurement accuracy and compliance with measurement Guidelines Gap analysis Model accreditation Recertification to validate carbon reduction activities Technical and strategic carbon reduction advice Public commitment from companies and recertification scheme to ensure carbon reduction Information provided to consumers to help them choose carbonresponsible products/brands & use products in a lower-carbon way Carbon Trust endorsement via Carbon Reduction Label that products or brands are making a legitimate commitment to act on climate change Flexibility to meet specific needs of individual companies * Delivered via independent, UKAS (UK sister organization to ANSI) accredited certification company

23 Developed Footprint Expert TM to help companies with key building blocks needed to develop footprints Calculators to model/inventory emissions of common elements of the product lifecycle Database, calculators and model framework are integrated Reference Data including continuously up-to-date emissions factors for common emissions events, and activity data, offering multi-region coverage for key areas. A Model Framework which provides a pre-built structure for modelling product carbon footprints. A Guide to product carbon footprinting documenting practical guidance for managing projects, specific methodological rules and best-practice in modelling and communication Model Framework Calculators Database The Guide

24 External Communications of Carbon Footprints On Pack Point of Sale Brochure / Consumer Education Website CSR Report or Press

25 Worked with over 75 companies and certified over 5500 SKUs Food & Beverage Bread Sugar Carbonated Beverages Fruit Beverages Bottled Water Wine Fruit Smoothies Potato Chips Milk Clothing T-shirts Pullovers Bags Other Products Plastic Packaging Chemical Solutions Household & Electronics Irons (electric) Home insulation Light bulbs Bio-based Dishware Detergent Tissue Paper Microprocessors Agricultural Oats Potatoes Meat Fruit Pulp & Paper Magazines Tissue Paper Paper Pulp

26 We have developed carbon footprints in many different industries

27 Agenda Carbon Trust overview Introduction to product carbon footprinting Benefits of product carbon footprinting Case studies Carbon Trust services Conclusions

28 Product carbon footprinting can drive changes in market behaviour Enabling companies: To improve their efficiency and influence up the supply chain To begin to switch away from carbon intensive products To compete fairly on green credentials Enabling consumers: To understand the carbon footprints of their products To differentiate between specific products on the basis of their carbon content

29 Future of product carbon footprinting Adoption of a standardized global methodology: Short-term, companies using published standards to conduct measurements Long-term, a single consistent global standard Industry collectives aiding companies within individual sectors develop consistent and economical product carbon footprints: Sector guidance documents Measurement tools and databases Common communications mechanisms Companies usage of product carbon footprinting to: Identify focus areas for carbon emission and cost reductions Enhance reputation of brands with stakeholders Increase supply chain collaboration External communications of carbon footprints through: Marketing / awareness building campaigns around carbon footprints, reductions achieved, etc. Labelling (potential variations of current label) Increased focus by regulators: On public communications (could help consumer education) Through tie-ins to carbon taxes or cap & trade schemes

30 Making Business Sense of Climate Change Sujeesh Krishnan Head of Carbon Footprinting Carbon Trust LLC 1375 Broadway, 3 rd Floor, New York, NY Phone: sujeesh.krishnan@carbontrust.com