International trends impacting locally
The move towards greater business sustainability constantly evolves and one area where we are seeing particular change is in the area of carbon footprinting.
Most significant, says carboNZero Holding CEO Professor Ann Smith, are international moves away from simply measuring a company’s operational carbon footprint to instead addressing the contribution of the supply chain to the company’s emissions profile.
This has significant implications for New Zealand businesses.
Previously, measuring and mitigating your organisation’s operational carbon footprint was the “norm”. Now the emphasis will shift to the supply chain – suppliers and contractors. These are called scope 3 emissions, the ones that your business doesn’t have operational control over, while scope 1 and 2 emissions are those directly applicable to your business.
“Scope 3 emissions are someone else’s problem that have suddenly become your opportunity to work more collaboratively with your supply chain,” says Ann.
“Imagine that your business has undertaken a carbon footprint, it’s been audited and lo and behold a lot of the carbon is in your supply chain. Where do you start? And in a way that is clearly beneficial, because the hotspots in your supply chain are also opportunities for cost savings for your supplier and in turn for you as their customer.”
Not only do you need to measure and manage your own footprint but you need to influence the other players in your value chain to do the same. It’s one thing understanding your own footprint but quite different helping others to understand their footprint and how it impacts on your business.
Here in New Zealand, Meridian Energy has taken up this challenge already by undertaking an inventory of its Scope 3 emissions.
Ann says work to influence your supply chain will take time and the key is to involve stakeholders early and explain the benefits to them. And increasingly, accurate measurement with robust verification is vital for reporting and disclosing carbon footprint information from the international scale to individual companies.
Players in the supply chain are asking for or including requirements in contracts for embodied emissions in goods and services purchased, loading and fuel consumption data for deliveries and distribution, volumes and electricity consumption for warehousing and retail, and weight of waste collected, distance transported and management of the landfill.
Your footprint could be a liability or an opportunity for your customers and stakeholders, Ann says.