Lowering the Cost of Carbon Footprinting

Despite the proliferation of carbon accounting tools on the market today, calculating carbon footprints—especially product footprints–is still very time-consuming. According to David Walker, Director of Environmental Sustainability at Pepsico International, most tools “pick up the automation at the point that most of the work as been done.” The work Walker refers to is the painstaking gathering of data. Since Pepsi wants its carbon foot prints to meet the standards of third-party certification organizations such as Carbon Trust, it aims for a relatively high standard of accuracy and methodological transparency.

While carbon footprinting may seem like it’s mostly about counting carbon, many companies have found that conducting corporate or product-line carbon footprints deepened their understanding of their own operations. This in turn exposed opportunities to lower carbon emissions, increase efficiency or cut costs. If carbon footprinting is costly and time consuming, complying with carbon regulations is burdensome. And companies will be slower to adopt it voluntarily, deferring its benefits to companies and to the environment.

Pepsico’s Basket Approach

Pepsico is keenly interested in understanding the carbon footprint of its products but has to reckon with the high costs of doing so and limited resources available for the task. The company’s strategy is to be selective rather than exhaustive. Pepsi defined a “basket” of some 25 products to analyze (out of some 6000 product varieties it sells globally). The products were selected to enable the company to draw broad conclusions from a limited sample size. In some cases, for example, Pepsi chose a single product and computed its footprint for multiple markets in which it is distributed. That allows the company to isolate the effects of variations in sourcing and distribution on the products’ carbon footprint. In other cases Pepsi has looked at unlike products in the same market, which can reveal the impacts of raw materials and manufacturing processes. The company works with the Earth Institute at Columbia University to perform the footprinting.

This approach, coupled with the company’s focus on “compressability”—the Pepsi term for the potential to reduce a product’s carbon foot print—will help the company prioritize its carbon reduction efforts on the products that will yield the greatest return on their effort.

A Path to Better Tools

While Pepsi’s approach is smart, there is still room for improvement in lowering the costs of carbon footprinting and life cycle assessments in general. Some groups are taking innovative approaches to this problem. The Applied Sustainability Center at the University of Arkansas is developing an open-source lifecycle assessment tool. The idea is for companies to contribute what they learn about their own processes to a database. The tool will aggregate the information submitted and overtime will provide increasingly precise models of the environmental impacts of different processes. As adoption of the tool grows, its usefulness should grow, and the costs of conducting lifecycle analyses should drop. Significantly, the tool aims to capture the value of aggregating this information while keeping proprietary, company-specific information private.

Another group with an approach to lowering the cost and improving the accuracy of carbon footprinting is AMEE, a small venture capital-backed firm that has built a Web-accessible database of carbon models and emissions factors. AMEE seeks to be the clearinghouse for the most accurate and up-to-date information about carbon emissions to enable companies ranging from enterprises to carbon accounting software vendors to lower the cost of calculating accurate carbon footprints.  Want to know how much carbon was emitted to generate the 3 megawatt hours your plant in Scotland used during the night shift? AMEE aims to be able to tell you.

Eventually, I suppose, carbon will be as easy to meter as electricity. But that is years off. Until then, it’s interesting to see the innovations that are getting us closer.

If you have thoughts about how to bring down the costs of carbon footprinting, please consider leaving a comment and sharing your thoughts.

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2 responses to “Lowering the Cost of Carbon Footprinting

  1. I completely agree that there’s a lot of painstaking work involved to get data at the product and process level from which to calculate a carbon footprint. The majority of service providers seem oriented to take either a financial view (“Send us your classified financial transactions and we’ll apply the factors.”) or require a company to collect all the data themselves and summarize it first (“Send us your numbers and we’ll apply the factors.”). Frankly, the hard work is to get down to the process level which is where the fuel is combusted or the electricity is used. The detailed focus on process of lean manufacturing is an excellent complement to a green initiative. See EPA’s “Lean and Environment” or “Lean and Energy” toolkits at http://www.epa.gov/lean

    Working from the process level to capture the details of energy use is the only way to change energy use – by changes at the source. Other methods may produce an overall carbon footprint but don’t provide any insight into where and how to make reductions. The point of a carbon footprint isn’t to get to a number but to change the number.


    • David Schatsky

      Phil, great point about the purpose of the number. I’ve seen organizations set up programs to gather and report on business metrics only to discover that the numbers they were gathering were not “actionable.” Good measurement programs have implications.

      I will note, though, that if regulations on carbon emissions take hold, markets for carbon continue to develop and carbon prices rise, even knowing the number will have some value, as companies will need to be able to report it accurately for compliance and to participate in emissions trading programs.

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