Delivering sustainable solutions in a more competitive world Carbon Footprinting: Methodological Approaches, Challenges & Opportunities Simon Aumônier Environmental Resources Management 4 October 2007

Delivering sustainable solutions in a more competitive world Outline What does a carbon footprint measure and report? How do we go about footprinting? Sources of uncertainty Data and assumptions What resolution is fit for purpose? Beyond carbon?

Delivering sustainable solutions in a more competitive world Everything Has A Carbon Footprint Person Product New product formulation Service Business or organisation Project Choices/alternatives Hotspots Opportunities for benefit

Delivering sustainable solutions in a more competitive world What Does A Carbon Footprint Measure? The WBCSD / WRI GHG Accounting Protocol: a ‘basket’ of greenhouse gases both direct and indirect scopes for reporting

Delivering sustainable solutions in a more competitive world The Carbon Footprint and the Value Chain INDIRECT DIRECT Retail TransportProductionDistribution Storage & Retail Transport Storage & Consumption Disposal Raw Materials The product life cycle is a series of ‘direct footprints’ Controlling one single direct footprint can lead to ‘burden shifting’ and may be counter-productive or not cost-effective

Delivering sustainable solutions in a more competitive world Direct Emissions Where regulation affects the business Under a business’ direct control Most obvious link to costs associated with energy consumption Data generally available electricity consumption fuel consumption refrigerant use A small part of the overall product footprint

Delivering sustainable solutions in a more competitive world Indirect Footprinting Business interacts with environment across the supply chain, not just its direct activities Indirect footprinting calculates all of the GHG emissions associated with a product, process or service activity, including: raw materials extraction; processing; manufacturing; retail; use; and disposal At each stage, natural resources are consumed and GHGs are released into the atmosphere = a ‘carbon footprint’

Delivering sustainable solutions in a more competitive world Calculating a Carbon Footprint Source data to describe greenhouse gas (CO 2 equiv) impacts for each input and output Map the product life cycle Identify and quantify inputs and outputs at each stage Balance mapped flows (inputs and outputs) to reflect one unit of product Multiply flows by greenhouse gas impacts to generate a carbon footprint (expressed in CO 2 equiv)

Delivering sustainable solutions in a more competitive world What Methods Already Exist? The WBCSD/WRI Protocol Life Cycle Assessment (LCA) ISO and – full LCA is peer reviewed ‘streamlined’ or simplified LCA Environmental Product Declarations (EPDs) Input/Output Analysis The Carbon Trust method The emerging BSI PAS 2050 Web-based footprinting tools

Delivering sustainable solutions in a more competitive world Carbon Footprint of a Food Product Processing and packaging Retail and use End of life 22% 68% 10% 0.2% P roduction and transport of raw materials Total footprint = 7.3 kg CO 2 equivalents per 500g of product

Delivering sustainable solutions in a more competitive world Carbon Footprint of a Textile Product

Delivering sustainable solutions in a more competitive world Footprinting Challenges Access to specific data – particularly with complex supply chains and manufacturing facilities Which generic data sets (electricity etc.)? Temporal boundaries do we footprint for 2006/07, or 2007/08… and revise how often? No two products actually have the same footprint Equivalence – where ‘like’ products differ Interpretation, reporting and communication

Delivering sustainable solutions in a more competitive world Further Sources of Uncertainty Complexity in raw materials sourcing Seasonality Variation in the performance of equipment from line to line, site to site, country to country… Soil carbon sink issues Direct emissions from livestock Consumer and post-consumer behaviours (cooking, waste disposal etc.)

Delivering sustainable solutions in a more competitive world Data and Assumptions Old data Data in Input/Output models - the basis of some carbon footprints - is already 12 years out of date ‘Allocation’ how can emissions from a source shared by 2 or more products be fairly distributed? Data collection is time-consuming (and expensive) The greater the resolution required, the more onerous the exercise, and the more frequently it must be repeated

Delivering sustainable solutions in a more competitive world What Resolution is Fit for Purpose? Trying to inform? the footprint directs supply chain improvement Seeking to communicate with consumers? the challenge is in labelling as much as footprinting Attempting to discriminate between products? can we deal with the sources of error? can we manage ‘equivalence’? Looking to compete between brands? can the numbers stand up to challenge?

Delivering sustainable solutions in a more competitive world What Do We Find? Food miles are misleading transport is often insignificant air transport isn’t always bad Non CO 2 emissions are important in food and drink products N 2 O and CH 4 from soils and animals these are highly uncertain Streamlined approaches sufficient to identify hotspots and inform improvement Peer review allows flexibility (prescription doesn’t)

Delivering sustainable solutions in a more competitive world Beyond Carbon Climate change is the most significant environmental threat that we must deal with But: resource depletion toxicological effects (human and ecosystem) water pollution (nutrification) social and landuse impacts… There will be a trade-off, and society will continue to emit greenhouse gases

Delivering sustainable solutions in a more competitive world Opportunities and Conclusions Consumer, City and retailer demand emerging First mover advantage – a value for carbon Cost reduction through energy, material and logistic efficiencies across the supply chain Climate stability Footprinting is achievable, deliverable and valuable …but it’s subject to many sources of error Labelling is either: broadly indicative, expensive or inaccurate