Introduction to Product Carbon Footprinting Sujeesh Krishnan VII Inter-American Conference On Corporate Social Responsibility Punta Del Este, December 2, 2009 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.

The Carbon Trust Established by the UK government as independent, not-for-dividend company We help organisations reduce carbon emissions and develop low carbon technologies InsightsInnovationsInvestmentsSolutionsEnterprises Last year we: Worked with >5,000 companies Identified savings of 4.6 million tCO2 per year worth £500 million

Aim of our product carbon footprinting work To build a globally accepted initiative to measure, reduce and communicate the carbon footprint of goods and services Aim Objectives Core Objective: Emissions Reductions Relying on: Information to allow sound decision-making Collaboration to achieve lasting impact

Agenda What is product carbon footprinting? PAS2050 standard for product carbon footprinting Carbon Trust work with companies Summary

What is the footprint of a product?  Aluminium Production  Sugar farming  Cola production  Packaging  Transportation  Chilled storage  Refrigeration  Can collection  Recycling or disposal Disposal & recycling Consumer use Raw material Product manufacturing Total carbon footprint of the can of cola (illustrative) Supply chain / value chain of a can of cola Distribution & retail

6 What is the footprint of a product? (Contd.) Innocent Smoothies

Why try to understand and reduce carbon footprints? Financial benefit: A low-carbon product is a low energy product is a low-cost product Employee engagement: They know that it is the right thing for you to do Customer demand: Consumers and businesses are starting to ask questions Risk management: Threat of future regulation and supply- chain disruption

Agenda What is product carbon footprinting? PAS2050 standard for product carbon footprinting Carbon Trust work with companies Summary

PAS 2050: 2008 Background and development 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, IPCC, etc PAS 2050 was co-sponsored by the Carbon Trust (author) and the UK Department for Environment, Food and Rural Affairs (Defra) –A Steering Group was established (decision-making authority); workgroups established –The Carbon Trust and Defra had joint sign-off; BSI was the project manager The Carbon Trust supported additional activities aimed at consistency –Code of Good Practice for Reduction and Communication –Further guidance for reduction (eg force majeure & banking) and communication (eg rounding) –Guidance for PAS implementation (with BSI and Defra) –Aimed at the non-expert; Facilitates implementation of the PAS The Carbon Trust is sponsoring a pilot accreditation for six verifiers though UKAS.

10 Overall international exposure (consultation, download and supply chain) PAS 2050 received input and experience from over 40 countries, across six continents, during its development. PAS 2050 has been downloaded over 15,000 times in over 110 countries. (Direct downloads only; does not include informal distribution: to August 2009)

Standards and supporting information PAS 2050: Product carbon footprint measurement standard Carbon Trust Code of Good Practice for Product GHG Emission and Reduction Claims: Guidance for communicating carbon footprint results, and for setting and assessing GHG reductions over time Business Opportunity: Highlights our experience with carbon footprinting, including six case studies. PAS Guide: Implementation of PAS 2050, written for non- experts

Agenda What is product carbon footprinting? PAS2050 standard for product carbon footprinting Carbon Trust work with companies Summary

Companies have a menu of options Measurement Certification Reduction Communication PAS2050 published in October: WRI & ISO UK & International projects (75 product types) “CT Footprint Expert” Starter Pack Independent certification using PAS, Templates, Comparability Rules & Data & Calculators Separate team gives impartial decision Support advice using models (e.g. Innocent) Baselining: Showing reductions over time (when other things are changing too e.g. PAS & data) Range of options and channels Use of the Carbon Reduction Label Assurance: independent & authoritative body Public commitment to reduction Marketing & Awareness

We have developed comparable carbon footprints in many different industries

On Pack Point of Sale CSR Report or Press Website Brochure / Consumer Education External communications of carbon footprints

Case studies of emissions reduction efforts by companies Boots: ShampooContinental Clothing: T-shirts 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 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

Agenda What is product carbon footprinting? PAS2050 standard for product carbon footprinting Carbon Trust work with companies Summary

Ultimately, this initiative 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

Adoption of a standardized global methodology: –Short-term, increased adoption of PAS 2050 –Long-term, PAS 2050 rolled into a more global standard like an ISO standard 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 Future of product carbon footprinting

© The Carbon Trust, 2009 All rights reserved The Carbon Trust is funded by the U.K. Government. Any trademarks, service marks or logos used in this presentation are the property of the Carbon Trust (or its licensors). Nothing in this presentation shall be construed as granting any licence or right to use or reproduce any of the trademarks, service marks, logos, copyright or any propriety information in any way without the Carbon Trust’s prior written permission. The Carbon Trust enforces infringements of its intellectual property rights to the full extent permitted by law. Making Business Sense of Climate Change Sujeesh Krishnan US Business Development Manager