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Reducing supply chain GHG emissions

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With legally binding climate change targets in the UK, companies are under increasing pressure to reduce greenhouse gas (GHG emissions). In the past this has focused on direct GHG emissions, for example by increasing energy efficiency within a factory or retail store.  However, organisations are starting to recognise that for changes to happen elsewhere in their supply chain they need to take responsibility for the embedded supply chain emissions. To demonstrate action on reducing supply chain GHGs, companies need to know what the emissions are, develop a plan and targets for emissions reduction and monitor progress to show actions are having an effect.

Reducing supply chain GHG emissions

Introduction

The 2008 Climate Change Act established the world’s first legally binding climate change target – for the UK to reduce Greenhouse Gas (GHG) emissions by at least 80% (from 1990 baseline) by 2050.  In autumn of this year the United Nations Climate Change Conference in Paris aims to achieve a binding and universal agreement on how to reduce global GHG emissions in order to limit average global temperature increases to just 2 degrees above pre-industrial levels.  All individuals and organisations have a role to play in helping to reduce global GHG emissions in order to limit climate change.

In the past many companies have focused on the GHG emissions that are immediately within their control, for example, increasing energy efficiency within a factory or retail store.  However, a number of organisations are starting to take responsibility for embedded emissions in their supply chain too.  The Carbon Trust states as much as 80% of a company’s total carbon impact lies outside its direct operational control. For food manufacturers, processors and retailers this often means tackling emissions from agricultural production, which can be significant for certain food types such as meat.

In order to demonstrate that an organisation is taking action to reduce supply chain GHG emissions, it is important to know what the emissions are, identify the most cost effective areas to target emissions reduction, develop a plan and targets for emissions reduction and then monitor progress to show that the actions are having an effect.

ADAS is the UK’s largest independent agricultural and environmental consultancy and is working with a range of big brands and suppliers in the agri-food supply chain. We have developed a specialised programme that can help food manufacturers, processors and retailers work with their supply chain to reduce GHG emissions.  Reduced GHG emissions can reduce costs both for the supplier and the manufacturer, processor or retailer, enhance the brand, make a positive contribution to the national and global GHG budget and reduce environmental impacts.

Benefits of supply chain GHG reporting

A recent IEMA survey[1] indicated that those companies undertaking GHG reporting identified the following benefits:

  • Identification of cost savings within the supply chain| 90% of those undertaking GHG reporting identified a cost benefit.

  • Assess where emissions hotspots are within supply chain| enables cost effective spending on the GHG reduction actions with the biggest carbon benefit.

  • Improved reputation| 80% said GHG reporting improved their reputation amongst stakeholders, customers and investors. Supply chain GHG reporting demonstrates a pro-active and advanced approach to carbon management by targeting the area with highest emissions. Engaging suppliers is key, for a company to truly be viewed as low carbon it needs to have a low carbon supply chain, this also enables finished products to be certified as low carbon.

  • Meeting supplier expectations| 40% of professionals surveyed in 2010 said they were already facing supply chain requests concerning carbon / GHG Emissions.

  • Identification ofsuppliers that need additional support| prioritise resources towards those suppliers who are behind industry benchmarks in terms of their sustainability performance.

  • Identification of resource and energy risks in their supply chain| if suppliers are using a disproportionate amount of resources this is likely to affect their resilience in a changing climate.

Identify the supply chain

Many food businesses have multiple ingredients so targeting of particular groups of major suppliers or those that are high risk suppliers is likely to be more cost effective than trying to get all suppliers to act at once.  A value chain approach could be taken to prioritise supply ingredients by biggest spend. By selecting the ingredients with the highest spend, or largest volume, you can identify those ingredients which have the potential to have the greatest impact on your particular product. Both national and international supply chain emissions can be assessed. In order to engage effectively with suppliers it helps to have a dedicated supply chain or at least good links with suppliers.  With a dedicated supply chain it is possible to engage closely with suppliers and work with them to increase their understanding of GHG emissions and then actions to take to reduce emissions, measuring and monitoring processes can be put into place.  A different approach is needed to reduce emissions from a raw material bought on a commodity market, as there is little influence over production practices. Understanding the differences between supply chains can be complex and understanding which approaches will be effective in which supply chains is vital for tracking GHG emissions.

Engage the supply chain

Members of your supply chain are likely to have reservations about being asked to tackle reducing GHG emissions from their production systems, a lot have limited understanding and are naturally sceptical.  The first step, therefore, is to demonstrate that reducing GHG emissions can benefit their business as well as yours.  This can be done through training sessions and workshops to help supply chain members understand what is required and what the benefits are, as well as why they are being asked to take actions in the future. Conversely some proactive suppliers may be pleased to be given the opportunity to demonstrate the work already underway to reduce GHG emissions.  Engaging the supply chain on GHG emissions can have further benefits in other environmental areas such as water or waste once these communication channels are open..

Establish a baseline and set targets

ADAS are able to work with farmers and supply chain partners to assist them in capturing the information needed to measure GHG emissions from production.  We currently work with the Cool Farm Tool (http://www.coolfarmtool.org/) to measure product level emissions, or use the AHDB EaGRET tool to measure farm level emissions and other environmental impacts, such as water use and land use.  Once data is captured in either of these tools it is possible to set a baseline of emissions and understand where the emission hotspots are.  The baseline emissions and hotspots can be used to develop targets for emissions reductions, set a carbon budget and a strategy for how this might be achieved.  It is important that any targets set are challenging, yet, realistic and to recognise how natural variations in yields (e.g. from flood/drought year) are accounted for in reporting. To achieve targets the key is to work with the supply chain to consider how they can reduce waste and improve energy efficiency and, importantly, to get their buy in to the process.  We do this by developing a carbon management plan with individual suppliers that sets out actions, barriers and costs for the year and identifies how much of a reduction this will achieve. 

Monitor progress

It is not enough to just set targets and hope that they are achieved.  Once suppliers have actions it is important to monitor their progress towards completing those actions, providing support as required.  It is also important to measure and monitor emissions reductions over time to determine progress towards targets.

Report achievements

Reducing GHG emissions is often an important public relations tool.  The process identified above can be used to support a communications strategy that demonstrates the actions that a company is taking towards reducing GHG emissions from its supply chain.  ADAS can provide validation of numbers recorded, providing an independent assessment of emissions to aid in marketing exercises.  For further information about reducing the impact of your supply chain on climate change contact sarah.wynn@adas.co.uk.

 

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RSK

ADAS is part of the RSK Group. RSK is the UK’s largest privately-owned multi-disciplinary environmental consultancy and one of the fastest-growing companies of its kind in Europe. With operations in Europe, Africa, and the Middle East, our solutions-led consultancy services help organisations conduct business in a compliant, and environmentally-responsible manner

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Adas

ADAS is the UK’s largest independent provider of agricultural and environmental consultancy, rural development services and policy advice. We have a unique combination of practical experience, underpinned by science-based data, which allows us to meet the needs of our clients. Our great strength is our breadth and depth of expertise spanning the entire environmental sector.

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