How much would you pay to know the Embedded Carbon Footprint of a Product?
Many customers are now widening their focus on carbon emissions from their own operations, to those of the companies they partner with. It is quite common for Cisco to be asked about its environmental policy and initiatives, or for specific metrics to illustrate progress of our sustainability programmes. Communicating these matters between neighbours in the supply chain is recognised as an acceptable and constructive conversation. However, a few customers are taking a giant leap, not just asking for information on our own performance, but of those beyond us in the total supply chain. The most extreme form of this is a request for information on the “embedded carbon footprint” of individual products or a specific bill of materials in a proposed transaction.It is remarkably easy to ask this question, simply by inserting it into a Request for Proposal document. However, coming up with an answer, of sufficient quality to be used in the assessment of suppliers’ responses, is decidedly tricky. The sheer size of Cisco’s product portfolio, combined with the complexity of our outsourced supply chain operations, means that a massive computational service would be required. This begs the question: how much would you pay if you did not expect the answer to be supplied “free of charge” in an RFP response from Cisco?Supply chain sustainability is a complex enough subject in its own right. There are plenty of reference documents to describe approaches to “Life Cycle Analysis” (LCA), the detailed process of all the steps taken between obtaining the raw materials, through to delivery, use and end-of-life processing of a supplied product. A good example is PAS 2050 “Specification for assessment of the life cycle greenhouse gas emissions of goods and services”, published by BSi British Standards.Reading through the associated guidelines however, reveals the sheer complexity of this exercise. It takes seven pages of calculations to illustrate how to arrive at the life cycle emissions associated with one product – a croissant. Just imagine how complex that becomes to encompass thousands of Cisco products, many available in module-based customer-specific configurations. For true accuracy, especially to reflect ongoing improvements in processes, we would need real-time data feeds from a myriad of different suppliers. Sure, it is possible, but so is travelling to the moon -it is just not very practical today.It is easy to see therefore, why Cisco is not alone in being unable to specify the embedded carbon footprint of a given product – only a very few companies have attempted this on a small number of product lines today. Even if we could, another question arises: does knowing the embedded footprint of the product actually help your own sustainability aims?For instance, you could not use the emissions number to compare one supplier with another, as there is no common standard for us to follow. You could not “trade” allowances against that carbon footprint without third party certification of the supplied CO2 number -involving more cost and complexity. Nor could you actively influence our deepest supply chain partners, because you have no commercial relationship with them.You could learn, for example, how significant the emissions from manufacturing appear, compared against the in-use emissions from your use of the product over its lifetime. The Society of Motor Manufacturers and Traders publishes an assessment of the life-cycle emissions of a car, showing manufacturing at 10%, in-use at 85% and end-of-life recovery at 5%. However, this model does not distinguish between an Audi and a BMW, nor between different models from a single manufacturer, so it does not help you differentiate in a purchasing decision. It only tells you what you already know: that you are responsible for the in-use emissions and that is where you should focus your attention. So if the information supplied is not much gain to you, why ask for it in the first place?So long as carbon accounting is not governed by clearly understood standards and tools, industry-wide, that seemingly simple RFP question can only be answered by a bespoke response. That means that we cannot automate it cost effectively. We could respond by offering you a consultancy service to calculate the embedded emissions that you have asked for. But if you knew up front that we might charge you for that, maybe tens or hundreds of thousands of dollars, would you still want to ask the question in that RFP?