Sometimes the Greatest Impact is Somewhere Else

During my career I’ve spent a lot of time helping company’s identify their carbon footprint, that is to say what are their carbon emissions.  Like most things, the difficulty of this task is heavily dependant on how broadly you want to look.  Staying in a tight circle makes the analysis much easier, for example, how much electricity does each building owned by the company use?  Not to say this doesn’t involve a lot of work and company introspection, but just that the tighter the circle the more direct the analysis.  But do the direct actions of a company truly reflect their carbon footprint?

Based on the efforts by the leading global companies on the carbon emissions from their supply chains (e.g., transportation sources, raw material providers, etc.) the answer is a resounding NO!

There are countless of images on supply chains, many of them very complex diagrams of all the possible sources of a company’s carbon emission sources, I couldn’t resist the simpler lego-like version.  Thanks to the University of Maryland Baltimore Campus (UMBC), Computer Science and Electrical Engineering, March 10, 2011 for their great image.

Based on the nature of global markets and the influence that successful company’s now have over so many other businesses and sectors, a look at their complete carbon footprint must include the carbon emissions from sources all over the world that are not owned by the company outright.  For example, what impact does Apple have on global carbon emissions?  How do the carbon emissions from processes that Apple directly controls versus the carbon emissions of independent manufacturing and transportation sources that supports Apple, as well as those from the usage of their products, compare?  Apple’s direct emissions pale in comparison.  This is not a unique situation, if you look across all business sectors, from electronics, pharmaceuticals, store chains and even car manufacturers, a significant portion, if not the majority, of their carbon footprint comes from sources outside of their direct control.  But how do you accurately measure the carbon emissions from these wide-spread sources?  This is a question that many of us have struggled with for a while, and for which we’ve relied on the pioneering efforts of others to help guide us. 

Recently the World Resources Institute (WRI) released the final volume of their guidance documents to allow global corporations measure and report their carbon footprint (the preceding volumes dealt with the more direct sources of emissions).  This document titled “GHG Protocol Corporate Value Chain (Scope 3) and Product Life Cycle Standards” is meant to serve as the defining source for the identifying and accounting for the carbon emissions from sources outside of a company’s direct control, but very still very much within their sphere of influence.  Having previously worked with WRI on this issue and just having read the document I’m excited about its release.  The document represents a coming together not only of a lot of intellectual energy but also real world experiences by some of the leading practitioners in the business.  Two thumbs up and a must read for anybody in this business, though I warn you based on my experience it will take you at least 2 cups of coffee to get through it in one sitting.