Model aims to keep each link in the chain strong
Reducing carbon emissions has become an integral part of corporate thinking, but keeping suppliers onside can be difficult. Paul McNeillis and Frances Darton take a look at a programme that offers a practical solution for both buyers and suppliers.DESPITE TOUGH economic conditions, climate change remains high on the agenda for most corporate boards. A social responsibility to reduce carbon emissions is now widely woven into corporate policy with ambitious targets set to reduce greenhouse gas emissions, both within internal company operations and through external supplier networks.
The problem facing many major companies is how to achieve these targets, and, in particular, how to engage and involve suppliers in measuring, managing and reporting their carbon footprints.
A significant barrier to bringing suppliers in line with buyer corporate policy has been a lack of clarity over the practical mechanisms by which collaboration can be established between buyers and suppliers within an industry, and on the standards, measurement techniques, reporting tools and management methods needed to achieve this common aim.
Many companies that operate internationally are confused by the multifarious national standards that exist and are daunted by the prospect of developing the means by which to measure carbon consumption within their supply chains.
Although national standards organisations in many countries are active in creating standards around the reduction of carbon emissions, practical approaches to establishing workable sustainable procurement practice within an industry have to be based on emerging international normative standards.
Companies therefore need to feel confident they are aligning their carbon reduction programmes to standards that are going to be valid on an international basis.
Establishing an environment in which practical progress can be made requires a collaborative approach by an industry on a collective basis so that the challenges of interpretation and implementation can be clearly understood and used to develop best practice methodologies that may be shared throughout the community.
After all, it makes little sense for suppliers to work independently, each measuring in their own way and coming out with slightly different figures. By working together they can ensure buyers are offered a true comparison and, what is more, the cost burden can be shared.
But it is important that these processes be properly audited, verified and appropriately certified against international standards so that both supplier and buyer are assured that standards have been met and due process has been followed.
For this purpose, a professional independent auditor should undertake a site audit.
Self-certified information is of dubious value, as has become all too apparent in the mortgage sector.
The industry that is actively engaged in tackling these issues, and that is at the forefront of this practical collaborative approach to reducing carbon emissions in the supply chain, is the utilities sector.
Taking a procurement perspective, leading utilities in the UK - United Utilities, Scottish and Southern, National Grid, E-ON, Anglian Water, and Northumbrian Water - identified a tremendous opportunity to work together on achieving their carbon emission goals by being early adopters of an innovative and practical programme developed by the international services company that manages supplier information, Achilles Group.
The carbonReduction initiative is a collaborative model developed for international use across all industries. At the moment the utility sector leads the way with early adopters including Outward Bound, Elster Metering, Mott MacDonald, May Gurney, Clancy Docwra, Radius Systems, Biwater, Black & Veatch, Laing O'Rourke, MWH, Balfour Beatty, McNicholas, Utilise Training Development Solutions and Flygt.
CarbonReduction offers a practical facility for buyers and suppliers to work together in meeting their greenhouse gas emission targets based on CEMARS (Certified Emissions Measurement and Reduction Scheme); an established international programme connected to both, International Organisation for Standardisation (ISO) and World Resources Institute (WRI), committees.
With a certification process closely linked to emerging international standards, those involved in carbonReduction may be confident that their carbon management processes are current and pertinent to global trading markets.
The CEMARS standard itself is built around the carboNZero certification programme run by New Zealand-based Landcare Research, developed over 10 years of research into greenhouse gas emissions and carbon monitoring. So this is a tried, tested and highly successful certification programme which has an established pedigree.
CarbonReduction helps both suppliers understand how to consistently measure, manage and reduce their carbon footprint, and also provides buyers with the verified information they need to make informed purchasing decisions.
Through this industry-recognised certification process suppliers are also equipped to provide data for reporting their own corporate responsibility for schemes such as the Global Reporting Initiative and the Carbon Disclosure Project. From a buyer's perspective, carbonReduction aligns suppliers with a buyer's carbon reduction strategy, offering visibility of carbon-related supply chain risk and enables managers to make informed purchasing decisions that meet their sustainable procurement goals.
Suppliers can start the process of getting involved in the carbonReduction initiative by registering with Achilles. A starter pack takes suppliers right through the process from the very first steps and offers guidance on issues such as: Who in my organisation needs to be looking at this? What kind of things do we need to be looking at - electricity bills, transport and the like? Following guidance from Achilles on setting the boundaries, E-Manage - an online tool for recording and managing emissions data - is used to set KPIs, produce a baseline carbon footprint measurement and create emissions inventory reports.
Essentially, E-Manage is a data repository, so once a supplier collects information on, say, their transport, mileage or electricity bills, they can enter that data into E-Manage and it will do all the necessary back office conversions and calculations and will generate figures on carbon emissions for those specific activities.
As part of carbonReduction the supplier has to put together three specific documents. One is an emissions inventory that details everything that they have collected, all areas that they have looked at, what kind of boundaries they have drawn around the business, what business units they have included and any that they might have excluded.
Suppliers also have to put together a management and reduction plan to say what sort of actions and activities they are going to engage in over the coming year to reduce that footprint. This plan of action has to come with senior management support to ensure that it really is embedded within the business and that it is not just a greenwash where they are just talking the talk without really getting involved.
The programme allows suppliers to manage their emissions, set targets and develop a long-term strategy.
Finally, Achilles undertakes the audit and certification process and makes this available to buying organisations.
Importantly, for buyers and suppliers alike, gaining visibility of carbon risk within the supply chain helps identify areas of inefficiency and by tackling those hot spots, financial savings result as carbon consumption strongly equates to energy usage. The stringent auditing programme helps suppliers identify and tackle these inefficiencies and, of course, reassures buyers that standards are being met.
Only Achilles employed auditors make site visits. A focus of the visit is to check that a supplier has included everything that they should within a footprint, ensuring that the supplier has gathered all the correct data, followed the right processes and made accurate calculations.
In short, verifying that the supplier has done everything necessary to comply with CEMARS requirements. Only then will a supplier be certified and published as such for the buying community.
CarbonReduction offers the opportunity for buyers and suppliers in every industry
sector to work together on securing set corporate objectives on reducing carbon usage, all within a framework geared to the emerging international standards on greenhouse gas emissions.
CEMARS certification of suppliers and a fully audited process creates a sound
environment for sustainable procurement and the attainment of corporate goals.