Measuring corporate environmental footprint

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Courtesy of thinkstep

Nuno DaSilva, Managing Director of PE Americas, reveals the best methodologies for measuring an organization’s environmental impact. Frequently I get asked for guidance on the best methods for measuring an organization's environmental footprint. Questions tend to be about 'should measurement be based strictly on collecting emissions and energy use data from operational and facility sites?' How best to determine green house gases (GHG) emits and is tracking other environmental outputs like water important? 'Should a product based approach be used so as to understand the footprint each product has considering not only the manufacturing process but also how customer usage and disposal?'

Pressures on the world's environment require every company to realize their entire direct and indirect environmental impact and to become more sustainable. A company's impact on the environment however doesn't stop once their product or service is delivered to the customer or distribution channel. The environmental impact of how a product is used and ultimately disposed of is typically controlled or heavily influenced by the product's design, recommended use and disposal methods. Companies therefore need to integrate an enterprise wide emissions based approach with an assessment of product/services to fully understand their complete environmental footprint. By identifying all direct and indirect environmental impacts your organization will be able to target 'hot spots' or key areas to implement sustainable initiatives.

The GHG (green house gas) protocol established by the World Resource Institute (WRI) and World Business Council for Sustainability (WBCFS), which categorizes GHG emissions into three scopes; 1,2 3. This approach to identifying and measuring GHG emissions is being adopted by many companies worldwide. Scope 1 represents the direct GHG that companies emit, Scope 2 is the indirect activities that produce GHG emissions such as electricity and Scope 3 category is for all other company consequences that indirectly add to GHG. I point out the GHG protocol because it reflects the expectation that watch groups, government and consumers have for environmental corporate responsibility. The market realities are that a company's environmental responsibility doesn't stop when its product or service leaves the dock. Measuring beyond the 'gate' (manufacturing/assembly of products) and analyzing distribution, use and disposal (landfill, incinerated, recycled, material returns) can in some cases have a larger impact on the environment then the manufacturing process itself. The most popular technique for measuring environmental impacts of a product or service is Life Cycle Assessment (LCA). LCA methodology considers the environmental outputs for the manufacturing processes and materials that go into producing a product but could also include distribution, use and disposal. A classic example is Levi's jeans. Levi's conducted a well publicized cradle to grave life cycle assessment for a pair of cotton jeans measuring all environmental inputs/outputs associated with growing and harvesting cotton, jean production, distribution, customer use and ultimate disposal. What Levi's discovered was the use cycle was by far the biggest contributor to a pair of jeans environmental footprint due to the water and laundry detergents used in cleaning. Subsequently Levi's launched a campaign to educate customers on the negative effects of detergents and effective methods for cleaning jeans.

Establishing initiatives, setting goals and monitoring results are the natural next steps once your organization has compiled a complete environmental footprint assessment. There could be initiatives that quickly reduce environmental emissions or implement sustainable practices. There will also most likely be opportunities to reduce the footprint through product design changes and uses that have a long-term effect on the lowering of your company's footprint. All these actions have positive impacts including lowering costs, enhancing sales to 'eco' oriented consumers and improving relations with government agencies and environmental watch groups.

The global business community has a tremendous and long-term challenge to make significant changes in the way we design, manufacture, distribute and influence the use and disposal of our products/services. The first step however is to understand all the environmental impacts on local, regional and global arenas through a comprehensive approach to measuring the corporate footprint.

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