I firmly believe that the engagement of the business sector in fighting climate change is crucial.
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With climate change rapidly moving to the top of the agenda for both governments and businesses, there is now a tangible opportunity for companies to take a leadership position. To achieve this business will need to develop innovative strategies that challenge the way in which consumer demands are satisfied and that move beyond tackling direct operational emissions to make incremental improvements in process efficiency. Key to business grasping this opportunity will be its ability to tackle indirect emissions and manage the entire carbon footprint across the supply chain.
Over the past three years the Carbon Trust has been working to build an understanding of how carbon emissions across a supply change can be comprehensively measured, systematically reduced and this information then communicated through a carbon label.In 2006, we published the findings from our work on supply chain emissions in two groundbreaking reports.The first report, The carbon emissions generated in all that we consume, turned the traditional view of business carbon emissions on its head by showing that all the emissions across the economy are generated to meet the needs of the end consumer. It highlighted for the first time that businesses could use a supply chain approach to look for new ways of reducing carbon emissions.Building on these findings, the second report, Carbon footprints in the supply chain: The next step for business, used case studies with Walkers Crisps and Trinity Mirror to show how a product carbon footprinting methodology developed by the Carbon Trust could be applied to measure supply chain emissions and highlight significant savings in both carbon emissions and energy costs.
Measuring the carbon footprints of products and services
Having completed detailed pilot projects with three leading UK companies - Walkers, the UK’s largest snack foods manufacturer, Boots The Chemist, the UK's leading Health and Beauty retailer and Innocent Drinks, the leading fruit smoothie brand - to test the rigour and applicability of its life cycle assessment based measurement method, we recognised that for this approach to become widely adopted by business, a single accepted standard was needed.
The development of a single standard is crucial not only to give business the tools and confidence it needs to tackle this complex area but also to create a level playing field that allows business to communicate the carbon footprints of products and services in a simple, understandable and comparable way.To develop this standard, the Carbon Trust has partnered with the UK Government Department for Environment, Food & Rural Affairs (DEFRA) and BSI British Standards. The draft standard, the BSI Publicly Available Specification (PAS) 2050, has as its basis the Carbon Trusts initial life cycle assessment methodology. This standard will draw on best-practice from a wide range of experts, via a number of independent steering groups, working groups and two rounds of open consultation. The final version of PAS 2050 will be published in summer 2008 as the first step towards creating an internationally accepted standard.The Carbon Trust is now working with 13 companies, including multinationals Tesco, Coca-Cola, Cadbury Schweppes and Kimberly Clark with global supply chains, to further test the current draft of the PAS and to make sure the final version is both robust and yet practical to use by business of all sizes and geographies.
To ensure consistency in the reduction and communication aspects of product carbon footprinting, the Carbon Trust is pursuing two further initiatives in this area. These initiatives will build on the measurement method set out in PAS 2050, and will establish a standard (or framework) for the calculation of carbon emission reductions over time, and guidance on the communication of results from product carbon footprinting.
The Carbon reduction label
Running in parallel with the standards development, the Carbon Trust is piloting a carbon reduction label for use by different consumer brands. The aim of this label is to allow companies to communicate both the carbon footprints of their products and services but also to make a commitment to reduce those footprints over the next two years Research in the UK has indicated that 66 per cent [needs a source] of consumers want to know the carbon footprint of the products they buy, and climate change is increasingly becoming an issue that will impact upon the corporate reputation of business Further research conducted in July 2007 concluded that 44 per cent of consumers would switch to a product with a smaller carbon footprint (The L.E.K. Consulting Carbon Footprint Report 2007 (research conducted by YouGov, Representative sample of 2,039 UK consumers)).
It is clear that while business is being driven from the top down to act on carbon by factors, such as current and future legislation, shareholder pressure and cost-efficiency, there is increasing pressure from consumers for products and services with a reduced climate change impact. This represents a new opportunity for business to compete on the carbon footprints of products and services as it does already on cost, quality and other factors.
The carbon reduction label, see Figure below, includes three main elements of note:
Measured embodied GHG emissions
The first is a measurement of the embodied greenhouse gas emissions of the product or service. At present, while there are still only a few products on the market displaying carbon footprint information, consumer understanding of what this number means is understandably low. We have however found that the number is important as it gives consumers confidence that the issue is being taken seriously. Research conducted by Boots with 1,000 of their consumers in September 2007 has shown that 72 per cent think it is important to show the actual number of grams of carbon per product on a carbon footprint label.
Over time as more and more products and services take up the label we envisage consumers being able to compare products and make informed purchasing decisions based on this information. We also expect companies to use this as a tool to make further reductions to the footprint of their products and to 'choice-edit' their ranges to reduce their carbon footprint over time. 
A committment to reducing carbon
The second important element of the label is the downward arrow in the centre of the label. This denotes that not only has the company measured the footprint of the product but it has also committed to reduce this over a two year period. Any company we work with will be subject to re-accreditation every two years. If at this point the company does not show that it has reduced the emissions of the product or service, the label will be removed.Again, Boots consumer research has shown 65 per cent of its customers would be more likely to buy a product where the label indicates that the supplier is working to reduce the carbon footprint so we are confident that this element meets an important need.
Maintaining credibility
The final element of the label is the statement that the company is 'working with the Carbon Trust'. Research by LEK Consulting found that consumers remain sceptical of green claims made by business; nearly 60 per cent say claims by manufacturers or retailers are either ‘not very’ or ‘not at all’ credible. In another study by researchers GFK NOP 71 per cent of consumers value the independent assessment of companies’ carbon footprint claims. Use of the Carbon Trust name on the label, gives the authority and objectivity that the consumer is looking for. As with the measurement standard, it is important that we develop a single consistent way in which to communicate this complicated information to consumers. We are currently trialling the carbon reduction label with a number or corporate pilot partners including Walkers, Boots and Innocent to see how business and consumers react to it so that we can develop the best possible means of communication.
Currently these three companies have all approached the use of the label from very different perspectives which reflect the interaction the have and want develop with their customers. Walkers Crisps has chosen to use the label on the front of its packets with some additional information on the rear of the packet explaining what the label means. This has been rolled out across all of its products in 2007 and will appear on 500 million packets this year.
Boots have created point of sale material that included the label along with more detailed information on reductions already made and what steps consumers can take to reduce the impact of their use of the product. Finally Innocent placed the label and a lot of detailed information on what it means and what has been done by the company to achieve it on its website where they felt that could establish a more meaningful dialogue on the issue with consumers.The response to these different approaches to the carbon reduction label, along with future label trials with other companies, will over the coming months help us to develop a standard method for communicating the carbon footprints of products and services in such a way that engages consumers and allows them to use this information to make informed purchasing decisions that will drive change right across the supply chain.
The future of product carbon footprinting and labelling
While both the PAS 2050 to measure the embodied greenhouse gas emissions of products and services and the carbon reduction label are still very much in development, we have seen widespread interest from governments, businesses and other organisations around the world. This unprecedented level of interest gives us real hope that we will be able to work collaboratively to develop accepted standards for both measurement and communication that will applicable not only in the UK or the EU but globally.
It is our hope that in the future the carbon reduction label will act as a bridge between carbon-conscious companies and their consumers, and not only provide a carbon measure, but also demonstrate a corporate commitment to manage and reduce the carbon emissions of the product. As empowered consumers, we believe we will make informed purchasing decisions based on the carbon content of the things we buy and companies will increasingly compete to reduce their emissions and reap the dual rewards of improved performance and profits.
