Unveiling the secrets of carbon footprint in the Supply Chain: regulatory standards, measurement, and scoping

In an era where sustainability and environmental awareness are paramount, organizations worldwide are increasingly recognizing the importance of reducing their carbon footprint. The Supply Chain, representing 11% of CO2 emissions worldwide, holds immense potential for emission reduction and sustainability. Many shippers or freight forwarders have already committed to be carbon neutral by 2040 to 2050. This transformation will create new challenges and opportunities for companies. In this captivating article, we will delve into the intriguing world of carbon footprint in the Supply Chain, exploring the regulatory standards, measurement methodologies, and scoping techniques that drive this transformative journey.

Navigating the Regulatory Maze

In the realm of carbon footprint management, an intricate web of regulatory frameworks and standards has been woven to guide organizations towards a greener path. Take, for instance, the influential Paris Agreement, which has set emission reduction targets to combat global warming. Moreover, internationally recognized standards such as:

ISO 14001:2015 - Environmental management systems - Requirements with guidance for use: This standard provides a framework for organizations to establish, implement, maintain, and improve an environmental management system (EMS). While it does not specifically focus on carbon emissions measurement, it includes requirements for identifying and managing environmental aspects, which may encompass emissions measurement and reduction efforts.

ISO 14083:2023 - Greenhouse gases — Quantification and reporting of greenhouse gas emissions arising from transport chain operations. The latest ISO standard shall be used thoroughly for accounting of carbon emissions.

Illuminating Measurement Methodologies

The quest for accurate carbon footprint measurement has birthed ingenious methodologies that shed light on emissions data. One prominent approach is the greenhouse gas protocol, a powerful tool that categorizes emissions into three distinctive scopes:

Scope 1: Includes direct emissions from sources that are owned or controlled by the company. This could include emissions from combustion of fossil fuels in owned or leased vehicles used for transportation of goods, emissions from owned or controlled warehouses or distribution centers, and emissions from owned or controlled industrial processes such as manufacturing or production facilities.

Scope 2: Includes indirect emissions associated with the generation of purchased electricity, heat, or steam that is consumed by the company. This could include emissions from the production of electricity used in company-owned or leased facilities, such as offices, warehouses, or data centers.

Scope 3: Includes all other indirect emissions that occur in the value chain of the company, beyond its owned or controlled sources. This could include emissions from activities such as purchased goods and services, transportation and distribution, employee commuting, business travel, and waste disposal, among others.

Science Based Target Initiative – Validating companies decarbonation pathway

The Science-Based Targets initiative (SBTi) is a collaboration between CDP (formerly known as the Carbon Disclosure Project), the United Nations Global Compact (UNGC), the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). It was launched in 2015 with the aim of mobilizing companies to set science-based targets (SBTs) for reducing their greenhouse gas (GHG) emissions in line with the goals of the Paris Agreement.

It sets the criteria and guidelines for companies to align their emissions reduction targets with the latest climate science and ensures that these targets are ambitious enough to contribute to the global goal of limiting global warming to well below 2 degrees Celsius and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius.

Companies that set and achieve SBTs in line with the SBTi criteria can benefit from several implications, including:

  • Enhanced reputation among stakeholders, including customers, investors, employees, and other stakeholders.
  • Risk management: adapting to the changing regulatory and market landscape related to carbon emissions, ensuring that companies are well-positioned for the transition to a low-carbon economy.
  • Competitive advantage: Companies that are early adopters of science-based targets can gain a competitive advantage by differentiating themselves as leaders in sustainability and climate action, potentially attracting more customers, investors, and talent.
  • Access to capital: Some investors and financial institutions are increasingly considering climate-related risks and opportunities in their investment decisions.
Overall, the SBTi provides a credible and recognized framework for companies to set science-based targets, demonstrating their commitment to addressing climate change and contributing to the global efforts to mitigate the impacts of climate change.

Other collaborative organizations can have tremendous value in supply chain decarbonation including Smart Freight Center that helps companies applying the Global Logistics Emissions Council (GLEC) framework.

MyTower TMS is using EcoTransIT as a methodology for calculation of every shipment carbon footprint. EcoTransIT was founded as part of the GLEC and provide calculation methodology that are compliant with ISO 14083 and European Standard EN 16258.

Paving the Way to a Greener Future

The pursuit of sustainable supply chains requires a commitment to continuous improvement and innovation. Organizations can embark on this transformative journey by implementing sustainable practices such as optimizing transportation routes, adopting energy-efficient technologies, responsibly sourcing materials, and collaborating with eco-conscious suppliers. By consistently monitoring, analyzing data, and evaluating progress, organizations can steer their supply chains towards a more sustainable and environmentally friendly future. That is specifically the challenge that shippers are facing today, transportation data remains fragmented and carbon emissions data related to transport even more. Unfortunately, without a robust and consolidated data it is not possible to assess and set an efficient and realistic strategy to become carbon neutral.

In our next TMS article we will further talk about this topic providing you insight and recommendation to resolve your data gap in transport carbon emissions reporting through the implementation of MyTower TMS.

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