How much CO2e is that product in the window?
The days of simple corporate roll-ups of greenhouse gas (GHG) emissions are fading into the past. Historically, a company could be viewed as proactive by tracking and disclosing aggregate, enterprise-wide GHG emissions. Today, competitive advantages are going to those organizations that can provide transparent carbon accounting details at product, activity and process levels.
Wal-Mart made headlines in 2009 by requiring 100,000 vendors to disclose energy, carbon, and sustainability metrics for products sold by the global retailer. However, this concept of pushing a company’s climate and sustainability initiatives onto its upstream supply chain extends far beyond Wal-Mart. Businesses are now beginning to view carbon as a proxy for efficiency and have integrated carbon management strategies into their supply chains.
New standards have emerged to help businesses understand the environmental impact of their supply chains. Initiatives from the Carbon Disclosure Project (CDP) and the World Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD) are currently in pilot phases with over 100 participating companies representing more the 20 industry sectors.
Participants in these programs are asking for details that cannot be addressed using a corporate summary of energy usage:
- Allocations of GHG emissions by customer according to the goods or services sold
- Efforts to verify GHG inventory records and reduce uncertainty
- Forecasts of how GHG emissions will change over the next 5 years
- Future plans to improve capabilities for allocating emissions based on specific products and services
- Measures to reduce GHG emissions in the lifecycle of products
- Climate change related business strategies to take actions on risks and opportunities; including emissions reduction targets, public policy engagement, and external communications.
- Strategies for engaging suppliers on their GHG emissions
It’s clear that this issue has tremendous momentum when a Google search for “green supply chain” yields over 15 million results. A February 2010 Fast Company Magazine article effectively articulated the completive side of this issue – “When every package is awash in claims of using less plastic and water, a standardized measure would separate sustainability lightweights from products that truly deserve their green halo”.