Reducing the climate change impact of everything we buy Food & Drink Innovation Event: Carbon Footprinting versus Labelling Euan Murray 17 th October 2007

Agenda Background to supply chain engagement Carbon Trust’s pilot product footprinting & labelling work The Future: standard development, industry engagement & pilot projects

The Carbon Trust Who we are: Independent company, funded by UK Government Our role: Help organisations reduce their carbon emissions and develop commercial low carbon technologies Last year we: Worked with >5,000 companies across UK Identified savings of 4.6 million tCO2 worth £0.5 Billion in cost savings per year

What is good carbon management? Stage 1: Direct Company Emissions Reduction Stage 2: Supply Chain Emissions Reduction Stage 3 (Optional): Offsetting

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

Agenda Background to supply chain engagement Carbon Trust’s pilot product footprinting & labelling work The Future: standard development, industry engagement & pilot projects

Supply chain emissions reductions §Supplier energy efficiency – encouraging them directly §Calculating product carbon footprints – identifying hotspots §Trinity Mirror example

Why the “product view” is key Targets >50% of emissions –Individual carbon footprint of 11 tonnes CO2 p.a. The UN/IPCC, Kyoto Protocol and China The market – consumers and brands

The business need is growing Further energy cost savings –e.g. 20% reduction on Boots Shampoo project Cost-saving strategy Consumer demand for companies to take action on climate change –GfK NOP (Oct 2006): 60% of consumers want to buy from companies doing the right thing on climate change Consumer desire for low-carbon products –Globescan (March 2007): –60% of UK consumers want companies to provide more PoS information on climate change impacts –77% want independent assurance of company claims on climate change New market strategy The word “VERSUS”: Footprinting AND/OR labelling

March launch of our work Product Carbon Footprinting Methodology Product Label Standard development & consultation Defra & BSI British Standards Pilot Development Projects Launch focussed on 4 key things:

Pilot carbon reduction label §Independent measurement §“Reduce or lose” commitment

Carbon labelling: the only solution? Businesses need to communicate through different channels: –Explanation of climate change impacts and product impacts –Explanation of how consumers can act Labelling is not a panacea but can be part of the solution: we will learn more through the pilot projects Independent market research shows positive trends GfK NOP & Globescan YouGov (Sept 207): 44% would switch to a product with a smaller carbon footprint even if it was not their first preference Populus Consumer Survey July 2007 –85% concerned consumers have heard of the carbon reduction label –68% of all consumers say the label measures ‘The amount of carbon emitted during the whole lifecycle of the product – from ‘seed’ to ‘store’’ –49% say ‘It makes me more likely to buy their products’ when the label is displayed on pack –69% agree ‘It demonstrates that the company is committed to reducing its carbon emissions’ –62% agree ‘It helps me to reduce the carbon footprint of my regular shopping’

Agenda Background to supply chain engagement Carbon Trust’s pilot product footprinting & labelling work The Future: standard development, industry engagement & pilot projects

Standard Development BSI are leading the work to develop the PAS Standard –Appointed a Steering Group from business, NGO, academics and government –First draft prepared, using the CT methodology as base –First of two consultations commenced –Details on the BSI website: Food & Grocery supply chains heavily involved: –2 representatives on the BSI Steering Group –Support from IGD, FDF, BRC and NFU –Lots of members of those organisations Engagement, support and efforts invaluable

CT looking to test the draft BSI standard with different products and in different sectors The companies will work with us to reduce their emissions and explore the best way to communicate the results New Pilot Projects 10 new projects: Aggregate Industries Hard landscaping products Cadbury Schweppes Dairy Milk bars Coca-Cola A still and a sparkling beverage The Co-operative Group Strawberries Halifax Halifax Web Saver Account Kimberly-Clark Andrex and Huggies nappies Marshalls Hard landscaping products Mϋller Dairy Yoghurts Scottish & Newcastle Fosters lager & Bulmer’s cider Tesco5 different product categories We will do further pilots throughout the year

Making Business Sense of Climate Change QUESTIONS