Reducing carbon emissions is undoubtedly one of the greatest challenges for companies to combat climate change. “Carbon is the new calorie”, says Bracken Darrell, CEO of Logitech, and hits the nail right on the head. A transparent approach to carbon emissions is therefore first and foremost a question of responsibility for companies towards society and towards their own employees, owners, investors, and other stakeholders. But there is more behind carbon transparency.
Goals and Benefits of Carbon Transparency
The transparency of carbon emissions and the climate impact of individual products is always accompanied by a commitment to reduce them. This creates trust, but also motivates to further promote decarbonization. If this strategy is implemented farsightedly, it also increases the profitability of the company. Since climate change is a global problem, decarbonization of the economy can only be realized collaboratively.
Carbon transparency plays a key role here: only if more and more data and information on the climate impact are made available publicly, it will be easier to compare them. The quality of the company’s own reports is constantly improving thanks to improved transparency.
Perspectives of Carbon Transparency
If companies want to communicate their climate impact to the public, taking into account the different perspectives and appropriate instruments becomes even more important. Corporate and product carbon footprints play a central role in this process. The Product Carbon Footprint (PCF) is the best-known method to analyze the climate impact of a product. Greenhouse gases are emitted during the entire life cycle of a product. The PCF helps to identify and analyze them in order to reduce or avoid greenhouse gas emissions. Similarly, the Corporate Carbon Footprint focuses on the climate impact of the entire company.
In addition, the common standards – such as the Greenhouse Gas Protocol or ISO 14064 – distinguish between three different scopes of greenhouse gas emissions. Scope 1 considers all emissions that are directly caused by the company. Scope 2 analyzes the indirect emissions generated by external providers of electricity, heat, cooling, or steam. All other indirect emissions that occur either in the supply chain or during product belong to Scope 3.
Challenges for Companies
This creates enormous challenges for companies that cannot be overcome overnight. Typically, companies establish carbon transparency in six steps:
- first public declaration on the reduction of greenhouse gas emissions
- first-time reporting, with a focus on selected business areas
- setting reduction targets, aimed at short-term, step-by-step improvements
- improve reporting, identify hotspots, and extend the focus on supply chains and product usage
- completion of reporting combined with certification
- setting new long-term targets for reducing greenhouse gas emissions
Transparency is not only crucial in customer communication, but has an effect in all areas, on your own employees, on the supply chain, and it also influences product usage.
What Do Companies Learn?
The path to carbon transparency is always accompanied by a learning curve. Thus, you can observe a development from what is easy to measure to what is important to measure. The ambition to set goals also evolves hand in hand, typically from short-term tactical to long-term strategic goals that increasingly impact core business processes, product design, and supplier partnerships.
iPoint’s Solutions for Carbon Transparency
Understanding the challenges involved in tracking and achieving climate targets, iPoint has developed solutions that support companies throughout the entire product life cycle. With our software iPoint Product Sustainability, we make it possible to analyze and reduce the climate impact of products faster. Automating the provision of carbon footprint data is an important concern for us to make scaling and implementation a reality for all products of a company.
Our team of experts is currently supporting Logitech International S.A. on the way to Carbon Impact Transparency. Logitech determines and verifies the climate impact of its products using our LCA software Umberto and thus supports customer communication in the form of a carbon label.
iPoint Product Sustainability is an application within the iPoint Suite, which is a central platform that enables the integrated use of sustainability and compliance information already in the product design phase in order to overcome knowledge silos within your own organization and beyond and achieve shorter innovation cycles.
In industries such as medical technology, electronics, or the automotive industry, supplier networks are often very complex. This complexity makes tracking and collecting data for the carbon footprint of these products throughout the supply chain challenging. This is why we have developed the innovative solution CarbonBlock together with our start-up CircularTree and in cooperation with the high-performance car manufacturer Porsche, the multinational chemical company BASF, and the automotive supplier Motherson.
Blockchain technology enables users to exchange product-specific carbon footprint information in the supply chain. The supplier remains the owner of their data and can easily provide access to their customers and, if desired, to their customers’ customers. Since all information is stored in a standardized format in the CarbonBlock network, the effort between suppliers and customers is significantly reduced.
