Key Findings 

• Throughout its lifecycle, a typical product causes average total carbon emissions at 6.3 times its own weight with substantial variation within and across industry sectors. With the development of global product LCA databases, this figure stands primed for substantiation.

• Our results confirm that a typical product’s upstream emissions (45% of total) are on average twice as high as those from direct company operations (23%). This confirms prior CDP Supply Chain results on a Scope 1 & 2 basis, however it is the first time the findings have been verified on a per product basis.

• Downstream emissions comprise on average 32% of total value chain emissions.

• This value chain breakdown varies by sector, showing that products from different sectors vary not only in the magnitude of CI, but also where in the value chain most emissions arise (hotspots)

• Higher portion of downstream emissions tend to be associated with higher CI, revealing the unique role of downstream processes for identifying and curbing high emissions.

• While companies' achievements to reduce their products' emissions vary widely carrying out LCAs, the more granular the better, clearly pays off.  On average, companies with life cycle breakdowns of their products achieved nearly three times the efficiency achievements as those with only product level footprints (~11% vs ~ 4%).

Key Findings 

• Over two thirds of life cycle emissions occur outside a company’s own operations

• Sectors with low carbon intensity tend to generate the majority of their emissions upstream of company operations, and sectors with high carbon intensity tend to generate the majority of their emissions downstream

• Within sectors, emission hotspots vary widely from product to product, and only individual LCAs reveal each product’s individual opportunities

• Product improvements led to an average annual intensity reduction of 7%, thus ensuring absolute reduction is possible despite growth

Abstract

With a growing global population and an increasing demand for consumer goods, innovation in product design is needed to meet the environmental challenges of resource scarcity, while ensuring a competitive financial edge for multinational consumer companies. Effective design and production of products that “use less to make more” ensures that greater demand can be met in a profitable manner. Further, by considering the life cycle of products, companies can ensure that the re-use of their product materials is factored into their design. Environmental sustainability and conscientious use of natural resources are intrinsic to the long-term growth of consumer companies. To gain a complete view of a corporation’s performance financial fundamentals and sustainability fundamentals must be evaluated side by side. For this reason multiple company departments are funding sustainability projects, especially those pertaining to supply chain, energy, and risk management. Not surprisingly, in 2015 the majority of corporate spending on sustainability consulting did not come from companies’ sustainability teams, but from multiple parts of the organization.1

The behavior of global consumers is shifting, and already a significant percentage are willing to pay more for goods and services from environmentally and socially responsible brands. To capitalize on this shift in consumer preference, companies can benefit from increasing their investment in sustainable product development and marketing. International consumer companies are already reaping the rewards of sustainability initiatives and campaigns. Since 2008, Unilever’s ‘Sustainable Living’ program has saved over $400 million in costs and reduced greenhouse gas emissions by nearly 1 million tons, while increasing global sales by 26%.2

Sustainable supply and demand of consumer goods is on the rise, and this is good news for everyone. 

Abstract

Increasingly, companies and brands are facing scrutiny from stakeholders on their environmental performance. Consumers, shareholders and regulators are demanding greater transparency, particularly from those entities with global and resource-intensive supply chains. In order to address this scrutiny, and identify risks and opportunities, companies are monitoring and reporting on the greenhouse gas (GHG) emissions throughout their supply chains and product portfolios.

An efficient way to begin this process is through comprehensive Life Cycle Analysis (LCA) of products. Product LCA provides a quantitative understanding of potential risks along a product’s life cycle, helping to identify inefficiencies and hotspots in supply chains and develop an inventory of GHG emissions. The use of GHG inventories can inform risk assessment, identify optimization opportunities, and forecast costs of regulation associated with GHG emissions and resource consumption.1 Understanding supply chain GHG inventories can help companies achieve three key business goals:

1. Identify key commodities and practices with the greatest sustainability challenges

2. Inform investment in ‘material’ sustainability issues

3. Improve corporate reputation and accountability through public performance disclosure 

This paper will briefly explore the evolving landscape of these business goals, and discuss the risks and opportunities available to companies when investigating the GHG emissions of their supply chains. 

 Why is it important for companies to understand their carbon emission footprint? There are three major reasons for companies to better understand and manage their carbon emissions:

• Economic drivers

• Regulatory requirements

• 2020 vision

Measuring and managing carbon footprints is a challenge many companies still fail to adequately address. A shift in corporate mindset from “tracking and disclosing” to “actively managing” carbon emissions would result in direct economic gains for companies.