I had the pleasure of speaking with Kevin Rabinovitch, Chief Climate Officer and Global VP of Sustainability at Mars at GreenBiz earlier this year. Kevin emphasized the importance of aligning corporate and product footprints by utilizing high-quality process life cycle assessment (LCA) data. He explained why doing so is the best way to gain visibility on scope 3 emissions, which for most companies represent 90% of emissions; and why such visibility would enable companies to better allocate their resources for reaching sustainability targets like Net Zero.
I have heard Kevin speak at conferences for over a decade. He has always struck me as a sophisticated thinker on sustainability matters, ahead of the curve in terms of understanding how to lead an organization with solid analytics. And he is so right on this point!
Yet the importance of grounding corporate footprints on detailed product LCAs is too often overlooked, leading organizations to fall short of their targets, put unnecessary reporting demands on their suppliers, face accusations of greenwashing, and deal with frequent re-baselining. This article outlines the four main benefits of developing corporate footprints based on process-based life cycle assessments for every product sold and line-item purchased.
Setting a climate target is the easy part. But how is an organization to achieve its target, particularly when the bulk of their emissions are embedded in the supply chain? Where should an organization focus its time and resources? Gathering primary data from suppliers is tedious and virtually impossible beyond direct suppliers, leaving outside-in modeling as the only viable option.
Identifying the specific industrial and agricultural processes that cause the most damage is essential; but it is impossible to do so with high-level emission factors based on input/output LCA or generic process LCAs based on products that bear little resemblance with the actual products that the company sells. Process life cycle assessment tailored to an organization’s specific products is the only approach that can swiftly identify the industrial and agricultural processes requiring attention.
It’s hard to find a supplier who won’t complain about the lengthy and generic questionnaires they receive from their customers. Sadly, it’s also hard to find customers who leverage supplier responses in a way that helps both parties advance sustainability goals. Lot of paper pushing. Little impact.
Starting with granular process LCA data to understand where the hotspots reside in the value chain enables organizations to move away from carpet bombing suppliers with uniform demands to surgical interventions that actually move the needle. It enables meaningful collaboration where suppliers focus on complementing modeled data with primary data and identifying opportunities to reduce emissions for these hotspots.
Organizations without good data frequently stumble when claiming credit for emissions reduction initiatives implemented within their supply chain. Many organizations fail in doing so because they are not able to quantify the environmental impacts of specific processes before an intervention, and how an initiative affected those specific processes. This simply cannot be done without process-based LCAs of an organizations’ products in place.
Furthermore, having the corporate footprint derived from the sum of product level assessments enables seamless, streamlined, and audit-proof tracking of progress.
Let’s face it, re-baselining is a pain. Unfortunately, it also is becoming the norm as it is required by CDP when new information leads to a variance in total emissions exceeding 5%. Companies most vulnerable to frequent re-baselining rely on high-level estimates when setting targets and developing their annual footprint. In such cases, primary data collected tends to be far off the initial estimates. What else would one expect when modeled emissions are not based on the specific products sold by an organization?
Conversely, starting with product level, process-based LCA models that are in sync with one’s corporate footprint will dramatically improve year-over-year stability and reduce the need for re-baselining.
Aligned Incentives was created to empower companies with thousands of ever-changing products and suppliers to swiftly build product and corporate footprints that are aligned and leverage the latest available process-based LCA.