A standardised method for calculating the carbon footprint of chemicals products has been developed to boost sustainable procurement.
Together for Sustainability (TfS) is a group of 37 chemicals companies, and developed a standardised chemical modelling system to accurately track carbon footprints.
The system was developed through bringing together several methods of calculation to simplify emissions reporting across the supply chain and help buyers assess climate impacts. The model is just one more example of the growing trend towards using technology to meet ESG requirements. With the objective geared at informing potential buyers as to Scope 3 emissions, client carbon footprints will be firmly brought into the realm of key performance indicators.
Traditional commercial considerations were exclusively focused on 'the bottom line'; which meant basic profit margins. These changed with the introduction of 'the triple bottom line' to include financial, social and environmental considerations. In the same vein, as traditional 'performance indicators' were solely financially-oriented, emerging indicators of performance now include ESG factors as key determinants.
This reorientation of commercial focus to include environmental and social elements has led to a surge in efforts to identify commercial sustainability markers using tech. These methods of identification are fast-changing the face of procurement as we know it.
The system developed by TfS is the latest example of this move to red and green flag commercial actors throughout the supply chain.
Steven Brughmans, SVP global direct and logistics procurement at BASF and steering committee member for TfS and scope three emissions programme sponsor, said the guidelines would allow carbon footprints to become an effective KPI for procurement. He said, “that will definitely impact your procurement decision”.
“Once companies get transparency on the real carbon footprint of their purchased goods, they can start choosing and selecting suppliers based on it. This will really bring the supplier base of chemicals producers to start investing even more in reduced carbon footprint materials.”
In the past, chemicals carbon footprints were assessed based on the broad standards of the International Organisation for Standardisation (ISO), which meant that two companies could come to very different conclusions.
The system developed by TfS relies on higher levels of calculation leading to equalisation and consistency in determining carbon footprint outputs.
“Comparability will make a fair, level playing field of competition," says Brughmans. "If you go to your suppliers and ask for carbon emissions numbers calculated under TfS guidelines, and one has a lower number, you know it’s an apples-to-apples comparison. You can base your purchasing decision on that.
“In the past there was limited supplier specific comparative data available for scope three. A lot of companies used generic databases to calculate the scope three upstream parts of their product footprints. For chemical products, typically over 70% of emissions are scope three – we’re replacing that generic data with real, live data, boosting the quality of product carbon footprints (PCFs)."
According to Brughmans, carbon reduction is going to be one of the main drivers of the chemicals industry for the next 20 years. This will drive the increased use of renewable energies, renewable raw materials and recycled raw materials.
"The real work, of course," he says, "is going to be implementation of the new standard.”
Technologies and data are leading to a major shift in the way that procurement is, and will be carried out. As systems for determining accurate carbon footprints are developed, the entire supply chain will automatically reconfigure itself to accommodate these transformations, and TfS is leading the way on these cutting-edge and paradigmatic changes.
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