Laura Timlin, Senior Client Manager, Carbon Trust Advisory discusses the challenges of assessing indirect emissions across the whole value chain of a product.
It is worrying how many companies are not aware of what happens to their products after the point of sale. This lack of insight makes it challenging for a company to estimate the real environmental impact of their products and can mean that opportunities to enhance the full lifecycle potential of their products are missed. Both of these oversights can be addressed by analysing a product's lifecycle carbon footprint. This means obtaining an accurate picture of the indirect emissions across the whole value chain of a product, and to do this a company must ensure that it reviews how a product is used, as well as how it is manufactured.
For many companies, the 'downstream' emissions - those generated by a product or service when they are used and disposed of by a consumer - are far more significant than those produced 'upstream' when the product is manufactured. Deciding which part of the value chain to focus on is a challenging task and the work undertaken by Carbon Trust Advisory to help companies understand the indirect emissions in their value chain often results in some surprising revelations. Indeed, expert support from experienced consultants when examining and managing the indirect emissions in the value chain is critical as it is easy to make the wrong decision with regard to which areas should be tackled first to achieve the greatest gains.
PepsiCo Quaker Oats found that by cooking its oats for longer on its own premises, i.e. in the upstream phase, it reduced the cooking time required downstream when the product is used by consumers, resulting in a significant reduction in the product's lifecycle carbon footprint. This highlights how decisions that may seem counter-intuitive can actually make the product more economical to use and environmentally friendly and this ultimately makes your products a more appealing choice for consumers.
In other product categories, for example, when considering the carbon emissions of drinks products, depending on the relative impact of the other stages of manufacturing and the product usage, it is often the refrigeration and packaging that contributes significantly to their total lifecycle carbon emissions. Our work with Coca-Cola found that packaging contributed between 33% and 72% to the carbon footprint of the product, depending on the packaging type and size and the type of product. In contrast, the emissions associated with the packaging of meat products is minimal when compared with the emissions arising from refrigeration and cooking in the use phase, but plays an essential role in minimising waste. The substantial reduction of packaging around a meat product may reduce 1% from the product's footprint in raw materials, but add 25% in increased wastage through damaged goods, demonstrating once more the importance of basing optimising decisions on a view of the impact across the whole value chain.
End-of-life disposal of a product and its packaging can be a significant "downstream" area of a product's value chain emissions. Around 30 million tonnes of household waste is generated in the UK every year*, with 7.2 million tonnes attributed to household food waste, according to WRAP. This wastage significantly increases the carbon footprint of a product due to the emissions resulting from landfill but more significantly the need to have grown or manufactured this amount of extra unused product in the first place. This is particularly problematic in the leisure and hospitality industry where 'all you can eat' buffets encourage consumers to pile their plates high with more food than they can eat, which ends up wasted.
To lower indirect emissions and capitalise on the potential upsides of low carbon products and services, businesses need to work harder to engage consumers and really understand, both at the point of sale and throughout the use and disposal of their products, whether there is more they can do to further enhance products in a way that meets consumers' current needs (price, quality, availability). Businesses also need to work to reduce both the 'cost of ownership' and its lifecycle environmental impact.
Understanding how consumers use your products will help businesses discover new ways of communicating the value of their products. With TVs, for example, 50-70% of emissions come from the use phase. This means, from a cost/benefit point of view that historically, plasma TVs are the greenest and most cost effective for casual viewers, while it would be better for the environment and their pockets for frequent viewers to use LED TVs despite the upfront cost difference. It is these insights that can influence choice and deliver economic and environmental benefits for all parties, businesses and their customers alike.
Consumers need more information presented in a simple to use form to allow them to make informed decisions regarding which products to buy, how to use them, and how to dispose of them, in a manner which reduces their individual carbon emissions without compromising their lifestyle. This could be expressed through a carbon guideline daily amount scheme, or a label such as The Carbon Trust's Carbon Reduction Label. Offering a visible sign and associated information which can help guide consumers' and companies' purchasing decisions.
Alongside these steps, there needs to be a mind shift among industry and consumers towards a preference for high quality durable products, moving away from cheap disposable goods that too quickly end up in landfill sites. There is already a growing trend for companies to offer warranties, maintenance and repair services, and making spare parts available for damaged products. It is encouraging that companies recognise that consumers are keen to take advantage of these services, and that it makes good environmental and economic sense for all concerned.
Looking ahead, consumer demand and government pressure is likely to drive more companies to explore all methods to reduce carbon footprints, so understanding where emissions arise and how they can be reduced will be critical. The companies that have a full understanding of their carbon emissions, including the indirect emissions associated with the use and disposal phases, lifetimes and maintenance, will be better able to measure, manage and reduce them in an environment where carbon emission reduction is an increasingly business-critical issue.
Tackling the indirect emissions associated with the use phase needs to be assessed accurately and rigorously, and partnering with an expert with proven experience in carbon management is a logical first step in reducing the carbon emissions in the value chain.
** Research conducted on behalf of the Carbon Trust Standard Company by Vanson Bourne during February and March 2011. Opinions were sourced from 1,000 adults across the UK.
Laura Timlin is a Senior Client Manager at Carbon Trust Advisory. Laura works with companies to identify their sustainability needs and aspirations, tailoring the advice in order to help these companies become sustainability leaders while deriving economic benefit and reducing carbon emissions themselves and along their supply chains.