How To Really Hold Business To Account On Their Carbon Footprint

How To Really Hold Business To Account On Their Carbon Footprint Supply chains can add a lot to a company’s carbon footprint. By mariakray / Shutterstock

Donald Trump may not believe climate change is happening, but most business leaders do and it is no surprise to see it top of the agenda at the World Economic Forum in Davos.

Many firms and organisations are now working hard to reduce their carbon emissions. And it is not just good public relations. Pressure is building on firms to lead society in the move towards a sustainable future.

But still too few include their supply chain when considering their environmental impact and this is bad news for the environment. Supply chains contribute significantly to a firm’s carbon footprint and can amount to four times the organisation’s own operational emissions.

The Carbon Disclosure Project (CDP), a charity running the global disclosure system on carbon emissions for investors and other interested parties, found just 29% reported absolute decreases in emissions.

As well as being bad for the environment, this will increasingly cause problems for businesses too. A growing number of regulators worldwide now require publicly listed companies to include measurements of their greenhouse gas emissions in their annual reports. The UK introduced “streamlined energy and carbon reporting” in 2019. This includes supply chains.

Different levels of engagement

By analysing the CDP annual survey data from 2014 to 2017, my colleague Jens Roehrich and I found 1,686 listed companies from all over the world that were actively collecting environmental data and engaging with their supply chain.

Although two-thirds of our sample firms were not doing any of this, we can at least see that engaging with your suppliers is on the rise. The number of firms talking to some or all of their supply chain increased by 57% in the three years we looked at.

We were able to categorise the firms into three levels of activity: basic, transactional and collaborative. The basic level sees companies typically send their suppliers a survey to fill in on their emissions. US software firm Symantec produces an annual report on the greenhouse gas emissions of its suppliers, while Bank of America has done a CDP supply chain survey since 2009.

This is the first step for a comprehensive carbon reduction plan, measuring and collating data. More advanced firms are using that data more productively. At the transactional level firms are calculating their carbon footprint and identifying opportunities for improvements, providing their supply chain with targets and incentives.

The airliner Virgin Atlantic aims to reduce emissions from its supply chain each year. Meanwhile, nuclear power firm Exelon sets goals for its suppliers to reduce energy usage and greenhouse gas emissions.his data is also being used by companies to develop key performance indicators. These can then be used to select a supplier or worked into contracts to assess a supplier’s performance. They can then send warnings to companies who are not achieving the required performance levels and demand improvements. For instance, pharmaceuticals company [Pfizer] benchmarks its suppliers on the basis of their greenhouse gas emissions and water consumption levels and demands corrective action when suppliers fall short of their targets.

At the collaborative level, firms are working with their suppliers to develop shared goals and values around sustainability. This means more direct conversations through meetings, seminars on best practices, as well as establishing online discussion groups designed to foster innovations that reduce their carbon footprint and create greener products and services.

Food multinational Kellogg’s has organised a Sustainability Consortium with its supply chain to advance scientific research and develop standards and tools that have the potential to improve the environmental, social and economic impacts of their products. Similarly, InterContinental Hotels Group is working with the International Tourism Partnership to reduce the environmental impact of the cotton used in its bed linen.

How To Really Hold Business To Account On Their Carbon Footprint Hotels can consider the carbon footprint of how their linen is produced. Shutterstock

Firms at the collaborative level also seek to engage customers and consumers, persuading them, through marketing and public relations, of the benefits of new, greener products and how to use them in a way that is less harmful to the environment.

Chemicals company Ecolab partners with its customers to reduce their energy demands and carbon emissions through innovations. French hospitality firm Sodexo funds a professor of sustainable sourcing at the Euromed School of Management in Marseilles.

If firms have to report all their emissions, from the supply chain to the customer, then what each one does affects the other. This makes the collaborative approach increasingly important. Companies need to understand that they are all part of a system that has to work together, rather than use it as another supply chain management tool.

Tech leading the way

Measuring emissions across the whole value chain can be incredibly complex for a company like Walmart with its thousands of suppliers around the world. The amount of data involved is probably why we see tech companies leading the way in reducing their carbon footprint. Their data analytics skills mean it is natural for them to collate data and put it to good use and work up and down the supply chain.

Their experience of handling and managing data also means they see this trend and increasing requirement to record and measure emissions for companies as an opportunity. If they figure out and produce a comprehensive software package that does all this effectively, they can then sell that platform to other firms looking to manage their whole carbon footprint. Verizon, for example, now sees its Internet of Things products, designed to reduce carbon emissions, as a significant source of revenue opportunities.

Sustainability has become the issue of this generation. If businesses are to prosper in this climate, they need to include their whole supply chain to claim they are truly on the planet’s side and not be accused of creative carbon accounting.The Conversation

About The Author

Frederik Dahlmann, Associate Professor of Strategy and Sustainability, Warwick Business School, University of Warwick

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Related Books

Climate Leviathan: A Political Theory of Our Planetary Future

by Joel Wainwright and Geoff Mann
1786634295How climate change will affect our political theory—for better and worse. Despite the science and the summits, leading capitalist states have not achieved anything close to an adequate level of carbon mitigation. There is now simply no way to prevent the planet breaching the threshold of two degrees Celsius set by the Intergovernmental Panel on Climate Change. What are the likely political and economic outcomes of this? Where is the overheating world heading? Available On Amazon

Upheaval: Turning Points for Nations in Crisis

by Jared Diamond
0316409138Adding a psychological dimension to the in-depth history, geography, biology, and anthropology that mark all of Diamond's books, Upheaval reveals factors influencing how both whole nations and individual people can respond to big challenges. The result is a book epic in scope, but also his most personal book yet. Available On Amazon

Global Commons, Domestic Decisions: The Comparative Politics of Climate Change

by Kathryn Harrison et al
0262514311Comparative case studies and analyses of the influence of domestic politics on countries' climate change policies and Kyoto ratification decisions. Climate change represents a “tragedy of the commons” on a global scale, requiring the cooperation of nations that do not necessarily put the Earth's well-being above their own national interests. And yet international efforts to address global warming have met with some success; the Kyoto Protocol, in which industrialized countries committed to reducing their collective emissions, took effect in 2005 (although without the participation of the United States). Available On Amazon

enafarzh-CNzh-TWdanltlfifrdeiwhihuiditjakomsnofaplptruesswsvthtrukurvi

follow InnerSelf on

facebook-icontwitter-iconrss-icon

 Get The Latest By Email

{emailcloak=off}

POLITICS

Why Australian Labor’s Climate Policy Is Too Little, Too Late
Why Australian Labor’s Climate Policy Is Too Little, Too Late
by Will Steffen
Opposition leader Anthony Albanese’s announcement on Friday that a Labor government would adopt a target of net-zero…
Stories Of When Your Kids Make You Feel Old! | The Curls
Old Conservative White Men: Pass The Football To Someone Who Will Try To Score
by Robert Jennings, InnerSelf.com
We have had important US elections but this one in November 2020 is undoubtedly the most important. Why? America and…
A Military Perspective On Climate Change Could Bridge The Gap Between Believers And Doubters
A Military Perspective On Climate Change Could Bridge The Gap Between Believers And Doubters
by Michael Klare
As experts warn that the world is running out of time to head off severe climate change, discussions of what the U.S.…
Revolutionary Change Needed To Stop Unprecedented Global Extinction Crisis
Revolutionary Change Needed To Stop Unprecedented Global Extinction Crisis
by Michelle Lim
Nearly a million species face extinction if we do not fundamentally change our relationship with the natural world,…
Countering Climate Denialism Requires Taking On Right-wing Populism.
Countering Climate Denialism Requires Taking On Right-wing Populism
by Richard Calland
History may in due course record 2019 as the year in which the penny finally dropped about the climate emergency…
Yes, More Carbon Dioxide In The Atmosphere Helps Plants Grow, But It’s No Excuse To Downplay Climate Change
Yes, More Carbon Dioxide In The Atmosphere Helps Plants Grow, But It’s No Excuse To Downplay Climate Change
by Vanessa Haverd, et al
The alarming rate of carbon dioxide flowing into our atmosphere is affecting plant life in interesting ways – but…
How CEOs, Experts And Philosophers See The World's Biggest Risks Differently
How CEOs, Experts And Philosophers See The World's Biggest Risks Differently
by Christopher Michaelson
We live in a world threatened by numerous existential risks that no country or organization can resolve alone, such as…
Reliance On Coal Divides European States
Reliance On Coal Divides European States
by Kieran Cooke
Two European states with a traditional reliance on coal are taking radically different paths as the climate crisis…

LATEST VIDEOS

How These Three Financial Firms Could Change The Direction Of The Climate Crisis
How These Three Financial Firms Could Change The Direction Of The Climate Crisis
by Mangulina Jan Fichtner, et al
A silent revolution is happening in investing. It is a paradigm shift that will have a profound impact on corporations,…
PBS Nova's Polar Extremes
PBS Nova's Polar Extremes
by PBS
In this two-hour special, renowned paleontologist Kirk Johnson takes us on an epic adventure through time at the polar…
A huge iceberg just broke off West Antarctica’s most endangered glacier
A Huge Iceberg Just Broke Off West Antarctica’s Most Endangered Glacier
by Madeleine Stone
Huge blocks of ice regularly shear away from Antarctica’s ice shelves, but the losses are speeding up.
The Rise Of Solar Power
by CNBC
Solar power is on the rise. You can see the evidence on rooftops and in the desert, where utility-scale solar plants…
World's Largest Batteries: Pumped Storage
by Practical Engineering
The vast majority of our grid-scale storage of electricity uses this clever method.
Hydrogen Fuels Rockets, But What About Power For Daily Life?
Hydrogen Fuels Rockets, But What About Power For Daily Life?
by Zhenguo Huang
Have you ever watched a space shuttle launch? The fuel used to thrust these enormous structures away from Earth’s…
Fossil Fuel Production Plans Could Push Earth off a Climate Cliff
by The Real News Network
The United Nations is beginning its climate summit in Madrid.
Big Rail Spends More on Denying Climate Change than Big Oil
by The Real News Network
A new study concludes that rail is the industry that's injected the most money into climate change denial propaganda…

LATEST ARTICLES

Why Australian Labor’s Climate Policy Is Too Little, Too Late
Why Australian Labor’s Climate Policy Is Too Little, Too Late
by Will Steffen
Opposition leader Anthony Albanese’s announcement on Friday that a Labor government would adopt a target of net-zero…
How These Three Financial Firms Could Change The Direction Of The Climate Crisis
How These Three Financial Firms Could Change The Direction Of The Climate Crisis
by Mangulina Jan Fichtner, et al
A silent revolution is happening in investing. It is a paradigm shift that will have a profound impact on corporations,…
Green Ammonia Could Slash Emissions From Farming And Power Ships Of The Future
Green Ammonia Could Slash Emissions From Farming And Power Ships Of The Future
by Bill David
For the past 100 years, a simple molecule has had an immensely positive impact on our world. Ammonia, which comprises…
Ideal US Cities To Survive Climate Change
Ideal US Cities To Survive Climate Change
by Johnna Crider
Climate scientists have shared where they think would be an ideal place to live in the United States in order to avoid…
Stories Of When Your Kids Make You Feel Old! | The Curls
Old Conservative White Men: Pass The Football To Someone Who Will Try To Score
by Robert Jennings, InnerSelf.com
We have had important US elections but this one in November 2020 is undoubtedly the most important. Why? America and…
How Tiny Microbes Are Revolutionizing Big Agriculture
How Tiny Microbes Are Revolutionizing Big Agriculture
by Mathew Wallenstein, Colorado State University
Walk into your typical U.S. or U.K. grocery store and feast your eyes on an amazing bounty of fresh and processed…
Uk’s Nuclear Future Hangs On Electricity Tax
Uk’s Nuclear Future Hangs On Electricity Tax
by Paul Brown
The new British prime minister, Boris Johnson, must soon decide whether to save the UK’s nuclear future with an…
Extreme Weather Could Push The U.S. Into Recession
Extreme Weather Could Push The U.S. Into Recession
by Karen Nikos
Physical climate risk from extreme weather events remains unaccounted for in financial markets, a new paper warns.