Ian A. Gentis
Reclipse Group
Monday, May 14th 2012

While the science of global warming is being debated, there is no doubt about a new metric coming to your supply chain: the carbon footprint. The measurement of greenhouse gas (GHG) emissions has become another plank in companies’ Corporate Responsibility platforms, and there is a good chance that you will be asked to provide your carbon footprint data in your next RFP response.

Here’s good news: Companies large and small that have decided to focus on reducing greenhouse gases as responsible policy, are finding out that they can save money.

The basic approach is to conduct a study of the carbon footprint of your supply chain as part of your product life cycle analysis (LCA).

Here’s some bad news: There is a lot of “junk science” and snake oil being offered up and some companies making honest efforts to understand their carbon footprint have had poor results.

Over the course of the next several blogs, we’ll explore the progress being made, offer resources and suggestions, and help you navigate through the hype to reach your goals.

So what is this all about?  A definition of carbon footprint

Our friends at Carbon Trust (www.carbontrust.com) in the United Kingdom (UK) helpfully offer this definition:

A carbon footprint measures the total greenhouse gas emissions caused directly and indirectly by a person, organization, event or product.

A carbon footprint is measured in tonnes of carbon dioxide equivalent (tCO2e). The carbon dioxide equivalent (CO2e) allows the different greenhouse gases to be compared on a like-for-like basis relative to one unit of CO2. CO2e is calculated by multiplying the emissions of each of the six greenhouse gases by its 100 year global warming potential (GWP).

A carbon footprint considers all six of the Kyoto Protocol greenhouse gases: Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6).

There are two types of carbon footprinting

The main types of carbon footprint for organizations are:

1. Organizational carbon footprint

Emissions from all the activities across the organization, including buildings’ energy use, industrial processes and company vehicles.

2. Product carbon footprint

Emissions over the whole life of a product or service, from the extraction of raw materials and manufacturing right through to its use and final reuse, recycling or disposal.

To get to a carbon footprint of the supply chain we will draw on both types of footprints.

What outputs can I expect from a carbon footprint? Some examples of carbon footprints

Let’s take a look at a recent carbon footprint study at Sprint Nextel (To review and download the full study, registration is required, but is free).

Sprint Nextel spends $13.5B annually on the 162 suppliers in its supply chain. Economic consultants Trucost (www.trucost.com) conducted a supply chain carbon footprint. A summary of their findings:

The carbon footprint of the Sprint Nextel supply chain is very concentrated in a few suppliers.

• The top 5 suppliers contribute to 58% of the total carbon footprint of the supply chain.
• The top 50 suppliers account for over 94% of the total carbon.
• Manufacturing is the most carbon intensive sector, accounting for 83% of the total carbon emissions and 67% of the expenditure.
• A total of 121 suppliers from Sprint Nextel’s supply chain are located within the top three sectors.

What can I do with this information?  Make plans to reduce your carbon footprint

Turning again to the Trucost Sprint Nextel study:

Measuring and understanding carbon footprints is the first step to towards managing and reducing them. Sprint Nextel can play a role in promoting emission reductions in the supply chains of its suppliers:

Develop low-carbon procurement strategies:

• An understanding of the main sources of emissions within supply chains could inform low-carbon procurement strategies.
• Baselines can be used to set carbon reduction targets for procurement.
• Include a requirement in tenders for suppliers to report carbon emissions data. Greater transparency can help identify opportunities to reduce emissions and demonstrate improvements in carbon performance.
• Carbon prices can be applied to emissions data to inform procurement decisions.
• Identify opportunities to monitor and share cost savings achieved through improvements in energy and carbon efficiency with procurement.

Inform engagement with suppliers:

• Identify the companies and sectors where engagement could be most effective to reduce supply chain emissions.
• Engage with suppliers that contribute most to carbon footprints, and are carbon-intensive compared with sector benchmarks, to encourage improvements in carbon efficiency.
• Ask suppliers to develop action plans to manage GHG emissions and monitor their performance. Encourage them to focus on improving the efficiency of fuel and electricity use so that they benefit from both carbon and cost savings.

For further reading, here is an interesting white paper from our friends at Carbon Trust which is no longer hosted on their website. (Understanding & Optimizing SC Carbon Footprints PDF)

All is growing well in California following the substantial rains during the winter and spring everything in the garden is growing and blooming.

The same applies in our Reclipse World. I like to call it “moving into the light”. It is exciting times with our Reclipse team and key partnerships building with experienced and innovative top talent and real pragmatic Vision to Action programs. We are developing both internally to fertilize our growth and externally as we prepare and present “value proposition” offerings for clients and potential new clients.

Exciting – Next Generation

It is a fact that most things we currently work on are confidential and we pride ourselves in working ahead of current curves to help our clients be the “Best Next”! Personally I really dislike the terms like “Best in Class” and “Benchmarking” as that really means trying to catch up and become normal or true examples of JIT vs. JIC vs. JTL (Just Too Late)

An Example: Apple and the iPod, iTunes, iPhone current realities really were “game changing” thought leadership and innovation to action and world changing success! Now the iPad has instantly become a “fashion statement” that sells like hot cakes and has created a whole new product, market and community category.

At Reclipse we prefer to work on innovating and creating “next generation” happenings for and with our clients.

Exciting – An all Electric Vehicle

One project I can mention is in our Sustainability, Clean and Green, category. This is a Company that has built a “Zero Emissions” electric vehicle that charges rapidly, has a long range between charges and can and does drive on the freeway as it goes fast enough to be able to. We are developing the Vision (s), Mission, Values, Strategies and Tactics for this entity and a business model that can bring most value for all. The working concept vehicle is operating and very exciting and very real!

We have also developed some compelling Business Chain Management offerings as although we are proven experts in all aspects of cradle to cradle (we borrowed that term from someone) Global demand/supply chain management, integrated logistics, operations and asset management practices we also know that its time for a next level of thought leadership thinking and actions to suit the world we are in and the one ahead of us. To many experts SC terminology for example has become a misused catch all and nothing phrase that has created and not integrated Company stovepipes/silos versus produced real “Business” Sales, Cost, and Profit and Innovation success results. Our Business Chain (Change) thinking, methods and actions help build a wave of change towards true “next generation” customer, people and talent centric collaborations and business innovations results successes.

Exciting – Outsourcers, the 3PL’s (4PL’s)

One of these next generation offerings is targeted at the current 3rd Party Logistics Outsource providers who have to keep up with the ever increasing demands and expectations of the Brand designers/ODM’s who outsource to others to get things produced and delivered for them to an ever increasing and demanding Customer and Cost reduction expectation. How do the 3PL’s survive and compete to thrive in this very demanding arena. Our offering, value enhancing propositions and know how to methods and “how to’s” are targeted to pragmatically help companies in this arena.

Exciting Times

So “lots going on” and it truly is an exciting time and opportunity for us all. Let the Sun shine and the gardens grow!

- Nigel