The transition of business management towards product ... - GVces

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energy distribution service. Retail pair of jeans pants. Food chicken (for consumption). Telecom 4G data package. Mining
The transition of business management towards product management: the use of the carbon footprinting tool Beatriz C. Koszka Kiss , Ricardo Mattos e Dinato 1

2

Researcher of the Centrer for Sustinability Studies of Getulio Vargas Foundation´s Business School – FGV-EAESP, [email protected] 2 Researcher of the Centrer for Sustinability Studies of Getulio Vargas Foundation´s Business School – FGV-EAESP, [email protected] 1

Introduction

Results and discussion

Since the launching of the Brazil GHG Protocol Program in 2008, the Center for Sustainability Studies from Getulio Vargas Foundation (GVces) has been creating awareness and building capacity within diverse business sectors for the development and publication of corporate greenhouse gas (GHG) emissions. Today, this Program is the largest voluntary platform for measuring and reporting organizational GHG emissions.

From the 11 pilot projects developed, only 6 were completed within the prescribed period (April to November, 2015), representing 55%. Several aspects contributed to these results, but the main issues that generated negative impacts in the pilot’s development process can be resumed in three types: i) difficulties in collecting supplier data – 1 company In most of the cases, critical suppliers didn’t have the needed data available for the development of the study. This issue is directly related to the fact that most of these suppliers don’t know their own product’s carbon footprint. This reflects also the lack of knowledge about LCA and the difficulty in understanding the applicant’s needs and future usage of data. Another challenge faced by the pilot developers was the relationship with suppliers: many are quite distant in the supply chain (tier 2 and 3), where no previous contact was established.

The GHG Protocol method (WRI & WBCSD, 2004) is the most widely used method in the world to account for GHG emissions. It focuses mainly in the climate impacts caused by a business, where the report of Scope 1 (direct emissions) and Scope 2 (electricity indirect) emissions are mandatory. Other indirect emissions along the business’ value chain (Scope 3) can also be reported as additional information. As companies evolved in this process, these indirect emissions have become more relevant to the emissions management and resulted in the launching of a specific method for accounting and reporting of these emissions (WRI & WBCSD, 2011a). But even when a company accounts for the majority of its direct and indirect emissions, the corporate GHG inventory does not reflect all climate impacts of its activities, specially the ones related to the products (goods and services) offered. Also, companies usually only report the emissions occurred in tier 1 and tier 2. Thus, the corporate inventory is not the adequate tool for businesses to manage their products’ emissions. In this context, the life cycle approach - as presented by the norms ISO 14040 and 14044 (ABNT, 2009a; ABNT, 2009b) – enables a more embracing and complete and analysis of all potential environmental impacts of a product. When considering only the climate change impacts, the norm ISO/TS 14067 (ISO, 2013) sets the rules for measuring the product´s GHG emissions through its whole life cycle: the product’s carbon footprint.



ii) difficulties in collecting internal data – 3 companies Many project developers had difficulties in determining the people and sectors responsible for a specific data, which generated lack of primary data in many studies. Other companies had difficulties in assessing data that was not collected or controlled. An additional aspect reflected the need for a better communication among business areas, since many internal data suppliers didn’t understand the urgency and the reasons for the need of data, resulting in delays and mistrust.



iii) other internal affairs (ex.: team management, availability of people and loss of interest in the project) – 1 company This aspect is not explored in this article since it regards company’s policies and decisions, not having a direct relation with the project analyzed.

This scenario motivated Gvces to launch a new initiative in December 2014 called Applied Life Cycle – CiViA (in Portuguese, Ciclo de Vida Aplicado). CiViA’s goal is to help businesses incorporate the life cycle thinking (LCT) within their management strategies. Among other activities, CiViA promotes the LCT through capacity building, working groups and by offering technical assistance to companies that are willing to measure the environmental impacts of their products. The methodological proposal of the project is a gradual construction of knowledge, which allows business to assimilate the conecpts and develop its own strategy regarding LCA and product impacts’ management.

CiViA - Results of the carbon footprint pilot projects (2015)

Chart 1: CiViA’s methodological proposal: gradual construction of knowledge

Methodology In its first year (2015), CiViA had 14 member-companies from various business sectors: mining, energy, agribusiness, food, telecommunications, chemical, steel and retail. Considering that the majority of these companies have not worked with LCA before, but had already some knowledge on corporate GHG inventories, a simplified approach was used, focusing only in one impact category: climate change. Among them, 11 businesses volunteered to develop a pilot project to measure one of its products’ carbon footprint – see Table 1 with the complete list of products selected. To help companies in the pilot projects, business managers received a 16 hour training in the carbon footprint methodologies (listed below). CiViA’s team developed the training materials, as well as an Excel calculation tool to help in the accounting process. • • •

PAS 2050:2011. Specification for the assessment of the life cycle greenhouse gas emissions of goods and services (BSI, 2011) ISO/TS 14067:2013. Greenhouse gases – Carbon footprint of products – Requirements and guidelines for quantification and communication (ISO, 2013) The Greenhouse Gas Protocol: Product Life Cycle Accounting and Reporting Standard (WRI e WBCSD, 2011b).

In the development of the pilot projects, the companies were responsible for mapping the product’s life cycle stages and processes, as well as for collecting and processing data (from primary and secondary sources). Companies were bundled in sectoral groups and held workshops to discuss technical issues and share their progress. They also received technical support from CiViA’s team and used the calculation tool to get to the GHG emissions from each process of the product chosen. To get more precise results, companies were able to choose among the more than 200 emission factors adapted by CiViA from Ecoinvent (v.3) to the Brazilian scenario. Table 1: List of sectors and products selected for the carbon footprint pilot projects.

Agribusiness

soybean meal and oil in bulk bottled soybean oil

Industry

cement

Energy

light switch wind power plant energy distribution service

Retail

pair of jeans pants

Food

chicken (for consumption)

Telecom

4G data package

Mining

ferronickel alloy

Steel

steel can

Conclusions The experience gained by CiViA in its first year with the development of the pilot projects evidences the importance of capacity building and the alignment of expectations with companies when developing an LCA study (regardless if it concerns only one impact category or many). It is essential to translate and explain technical and methodological concepts into practical lessons, so that companies can assimilate and implement the life cycle thinking into its management procedures. During the elaboration of the pilot projects, companies could learn about the importance of organizing data and the challenges that had to be faced to get to the expected results. In future studies, it is likely that a new processes will be implemented to facilitate the data transaction, as a result of this learning process. Nevertheless, suppliers will also have to be trained in the specific methodologies in order to understand the need for data and the possibilities of benefiting from an LCA study. Companies have an important role to play in this scenario, creating incentives and reducing the communication gaps between different supply chain links. References ABNT (2009a). ABNT NBR ISO 14040:2009. Gestão ambiental – Avaliação do ciclo de vida – Princípios e estrutura. ABNT (2009b). ABNT NBR ISO 14044:2009. Gestão ambiental – Avaliação do ciclo de vida – Requisitos e orientações. BSI (2011). PAS 2050:2011. Specification for the assessment of the life cycle greenhouse gas emissions of goods and services. Available at: http://shop.bsigroup.com/en/forms/PASs/PAS-2050/ ISO (2013). ISO/TS 14067:2013. Greenhouse gases — Carbon footprint of products — Requirements and guidelines for quantification and communication. WRI & WBCSD (2004). The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard. Revised Edition. Estados Unidos. Available at: http://www.ghgprotocol.org/standards/corporate-standard WRI & WBCSD (2011a). The Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard. Supplement to the GHG Protocol Corporate Accounting and Reporting Standard. Estados Unidos. Available at: http://www.ghgprotocol.org/standards/scope-3-standard WRI & WBCSD (2011b). The Greenhouse Gas Protocol: Product Life Cycle Accounting and Reporting Standard. Estados Unidos. Available at: http://www.ghgprotocol.org/standards/product-standard