What do Nestle, Proctor & Gamble, Unilever, and Dell have in common? Theyve all put their suppliers on notice to provide concrete, meaningful data on their carbon footprint. Why? These companies are seeing real business value in measuring energy use and carbon emissions upstream to gain business efficiencies, reduce costs, forge closer links with supply chain partners, and make the most cost-effective reductions in their total carbon emissions. By Phil Berry

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Knowing - and being able to communicate - the carbon baseline of your owned business operations (also called Tier 1 or Scope 1) is quickly becoming an expected part of doing business, regardless of your place in the supply chain. While assessing the climate impact of your supply chain (or your company's products) is not yet expected, it soon will be. Here's what you need to know to get started:

 

1. Baselines do not need to be costly or overly complicated. A baseline can begin as an estimate based on a one-time survey. (Concentrate on key metrics first, and leave the rest for later.) Just be certain to structure the survey in a manner that facilitates the necessary move to on-going measurement.
2. Begin by drawing a map of where carbon emissions come from in the business and the supply chain: operations, employee travel, manufacturing, transportation and logistics, retail, use, and recycling/disposal.
3. Roughly identify the largest source of emissions; progress in this area will have the most meaningful benefit for your business. For some organizations (i.e. retail, offices, governments) that may be in buildings and operations. Many businesses may find the real impact comes from manufacturing. Others will find the largest impact in the energy consumed when their products are used (i.e. appliances, cars).
4. Always include the cost of energy use in the baseline of your owned business operations , oil, gasoline, diesel, natural gas, coal, electricity.
   
5. Include indirect costs as a core element of measurement. Certainly energy use rules, but dont ignore related costs such as the total cost of storing fuel onsite.
   Remember that accuracy is just one consideration. A baseline should also be able to inform and empower the decision-making process. Balance accurate reporting with simplicity and accessibility.
6. The most useful way to look at the output of the data is to calculate it in amount of carbon (pounds or kilograms) per unit of production.
7. Be sure your thinking is compatible with international standards. Your initial baseline doesnt need to be perfect , just on the road to meeting the standard.
   

The day is fast approaching when your carbon baseline will have to consider all elements of your supply chain, including the raw materials used in your products. Creating a baseline now is both a leadership position and a smart, forward-thinking business decision.

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Phil Berry has spent the past 30 years implementing corporate sustainability and lean manufacturing programs at companies large and small, most recently for a global apparel manufacturer. He has worked with more than 400 organizations on five continents (particularly in India and southeast Asia), advising on core product design functions such as waste minimization and toxics reduction. Phil is SLM's expert-in-residence on sustainable product sourcing and innovation, as well as the host of Sustainable Sourcing Update.