There are generally two approaches to measuring and managing your environmental footprint:
SaaS impact accounting solution
Standard Life Cycle Assessments (LCA)
The choice between these two options depends on various factors, including your specific goals, resources, and the complexity of the analysis. Here's when you might choose one over the other:
Simplicity and cost-effectiveness: SaaS impact accounting solutions are typically more straightforward and cost-effective. If you need a quick and relatively simple assessment of your impacts, especially for regulatory reporting, carbon neutrality tracking, or internal sustainability goals, a SaaS solution may be a more practical choice.
Regular, real-time emissions monitoring: SaaS impact accounting solutions are often used for ongoing, real-time monitoring of carbon emissions and sustainability metrics. If your primary focus is on continuously tracking and reducing your carbon footprint, a SaaS solution can provide you with the necessary data and tools in a more accessible and user-friendly manner.
Organisational carbon reporting: Companies looking to report their carbon emissions and environmental performance to stakeholders, investors, and customers may prefer SaaS solutions. These platforms often offer standardised reporting templates and can streamline the process of compiling and sharing data.
Supply chain and operational tracking: If your primary concern is monitoring emissions from your operations, supply chain, and daily activities, a SaaS impact accounting solution is a convenient way to collect, analyse, and visualise data for smarter decision-making.
Data availability: SaaS solutions may rely on readily available data and standard emission factors, making them suitable for organisations with limited access to detailed life cycle inventory data, such as smaller businesses or those with less complex product or service offerings.
Caveat… these findings are off the back of Altruistiq’s capabilities. Good to note that not all SaaS solutions have the same level of functionality. Advice: choose your tools wisely!
Standard LCAs are more appropriate when:
Comprehensive analysis is needed: If you require a very detailed, holistic understanding of the environmental impact of a product or process throughout its entire life cycle, including raw material extraction, production, transportation, use, and disposal, an LCA is the better choice.
Customised assessments: For products or systems with unique attributes or complex environmental considerations, an LCA can be tailored to provide a more precise analysis compared to a SaaS solution, which may offer a more generic approach.
Regulatory compliance: In some cases, regulations or certification standards (e.g., ISO 14044) may require a full LCA to ensure compliance. In such instances, a SaaS solution may not meet the necessary detail.
Research and product development: For in-depth research, innovation, or product development purposes, an LCA can offer a deeper understanding of environmental impacts and guide sustainable design decisions.
Some organisations use a combination of both, employing SaaS solutions for ongoing monitoring and using standard LCAs for in-depth, project-specific assessments. Similarly, a company that develops/produces a handful of products may choose to undertake a standard LCA whereas a company with 1,000’s or 100,000’s of products find a SaaS solution more worthwhile. Take the time to clearly define the goals of your business and use those goals to guide your choice of SaaS solution vs an LCA.
Industry Insight: How to ‘trust’ environmental data coming from your suppliers?
We've had many conversations recently about how to trust supplier data. Here's our take - trust is expensive, and for large supplier datasets there are basically two ways to build trust:
Top down. This means modelling and data science, outlier detection, benchmarks etc.
Bottom up. This means assurance/audit, site visits, soil samples, etc.
Both cost time and/or money, the second is more expensive than the first. So, it pays to be pragmatic. Here’s how to prioritise resources:
Assess the materiality of your suppliers. If you have 10K of them, it’s likely that for 8K trust doesn’t matter. That’s because their environmental contribution to your product is too small to be relevant (even if it’s 3x higher than stated).
For the minority that have a material contribution, use a few simple rules to filter for the ones where there’s a trust deficit. For example: Are these materials or geographies where there are known data gaps and accuracy is likely to be low? Are these smaller companies which may not have had access to independent assurance when creating their numbers? Are these outliers versus their peer group (materials, geographies, size of company)? This is where the top down approach starts to make an appearance.
Finally, prioritise the remaining suppliers based on how much you care about trust right now. This might sound odd, but trusting the environmental data from a specific supplier is important if you’re going to use it. This could be that: You’re beginning to roll out a supplier support program and real money will start to move into the supply chain (e.g., for decarbonisation finance). You’re factoring environmental performance into commercial terms (e.g., volume, pricing).
The fact that there is money on the line means that it should be worthwhile to undertake the expense of building trust through a bottom-up approach. But by this point, you’ve probably brought your 10K number down to around 200.
Policy Pulse | The Latest Sustainability Developments: Ecodesign for Sustainable Products Regulation (ESPR) Framework: Moving to Circular Economy Products
As part of the European Green Deal package, the EU wants to drive a positive sustainability impact through consumer products. The EU passed the Ecodesign for Sustainable Products Regulation (ESPR) in March 2022, which provides a framework for introducing new circular product design requirements. The ESPR sets out two main features:
Regulation for new design standards - the law enables the EU to set new requirements on any product sold in Europe, covering design aspects such as durability, resource efficiency, and end-of-life treatment.
Digital Product Passports (DPP) - this is a new way for all the sustainability information about products to be accessed easily - through a QR code or NFC tag. This will house relevant sustainability data dictated by the design standards, alongside warranty/repair information and carbon footprints.
Together these changes are intended to drive higher quality sustainable product designs whilst enabling the consumer to make informed decisions.
What businesses need to know
The ESPR is currently just a framework so any new restrictions on a given product category would have to be passed in their own follow-up law. The EU intends to tackle this by prioritising high-impact sectors first: fashion, consumer electronics, vehicles, construction and chemicals.
ESPR’s sustainability standards:
Product’s circular design - setting requirements that mean products are designed to last longer and are easier to repair or re-use if they break. This could be restrictions on guaranteed lifetime, use of standard components and ease of disassembly.
Resource use - setting efficiency standards for energy, water or other resource consumption. This can be set at any life-cycle stage of a product, including on quantity of packaging used.
Waste and emissions - creating standards for how much pollution a product can make, including on carbon footprints, waste generation and micro-plastic release.
High recyclability - products should be designed so they can be easily recycled, and have standards their recycled content.
The Digital Product Passport will encode information on all the above themes. This will allow customers, suppliers, manufacturers, repairers, and public agencies to transparently access products’ environmental data.
What businesses need to do
The full details of the regulation are expected to be released sometime in 2024. This means the first companies in priority sectors would have to start complying in 2026.In the meantime, there are certain actions that companies can prepare for:
Phase out banned practices - This includes planned obsolescence and the destruction of unsold products (particularly for textiles, footwear and electronics).
Collect environmental data - a key part of the Digital Product Passport will be displaying life cycle assessment (LCA) information of products. LCAs take time and money, so now is the best time to start collecting environmental data.
Start incorporating circular design principles - the overarching circularity themes of durability, repairability and re-usability have clear lessons but hard-to-design features. Product manufacturers can get ahead of requirements by conducting R&D now.
The most exciting, and most uncertain, aspect of ESPR is the Digital Product Passport. This is because the EU has not yet specified a technology - just technical requirements to be open-access and secure.
The EU will set out different requirements by product line, such as by starting with laptops and moving to clothing. Exactly how the regulation gets implemented will be clearer as design requirements are added, and details on digital passports finalised.
Sustainability Trailblazers: Optimising your Climate Labelling Strategy with Shaunagh Duncan, Head of Sustainability, Europe & International Markets at Oatly
From imperfect beginnings to iterative success, Oatly was one of the (if not the…) first brands to add climate labels to their products in 2019. Today, Oatly's European product range proudly boasts carbon labels, extending this transparency to North America earlier this year. Yet, product carbon footprints on packaging are meaningful only when people have something to compare it to.
Enter, stage right: Oatly’s Dairy Deal Campaign, offering free advertising space to dairy companies in exchange for disclosing their carbon figures. This campaign is also a platform for constructive discussions with government bodies about labelling standards.
We chat with the AMAZING Shaunagh Duncan, Head of Sustainability, Europe & International Markets at Oatly, who shares her advice to fellow professionals setting up (and transforming) a climate labelling strategy:
What are some of the challenges to expect?
Lack of standardisation. There is no agreed methodology on how to measure the environmental impact of food. Oatly uses a Life Cycle Assessment approach, but few LCAs are the same, which makes it challenging for people to accurately compare their food and beverage choices.
Logistically complex. Creating labels that work in different markets (e.g., the EU and the US), whilst maintaining similar pack formats and artwork is logistically challenging. On top of this, the ever-evolving labelling landscape adds to the complexity.
Resource intensive. Getting hold of data is always an imperfect science, requiring dedicated efforts (in Oatly’s case, a dedicated LCA team). Once you collect the data, run the calculation you also want to get it independently verified (this is also expensive).
How can businesses benefit from carbon labelling?
Innovation: It helps to hold the whole business accountable and makes it easier for sustainability to be considered at every stage of product development, encouraging product efficiencies and innovations.
Team alignment: With the carbon numbers, Oatly sets clear targets, tracks progress and aligns the company behind its overall ambition to reduce its climate footprinting by 70% per litre of Oatly produced by 2029.
Brand equity. Packaging serves as prime real estate for marketing. By displaying carbon numbers on every carton, Oatly showcases transparency, building brand image and consumer trust, even if the numbers aren't fully understood.
Advice for sustainability professionals:
Invest in internal collaboration:- Bring your branding and creative team on board. Look for industry examples to show that it can be additive to the look and feel of the brand (check out DEYA as an example).- Establish a process with the product team. Try and get hold of the data before the development or launch of a product. Use this data to inform a lower-impact option. So often teams do it retrospectively and risk ending up with higher numbers that aren’t aligned to your overall sustainability objective.
Practise smart prioritisation. Set guidelines for updating data. Oatly used to update their numbers every year. This sometimes resulted in minimal changes, not justifying the time spent on recalculations. After trial and error, Oatly now prioritises recalculations when there is a dramatic change that will impact the numbers (e.g., supplier or sourcing changes).
Explore existing labelling schemes. Piggyback on established schemes that exist and are gaining traction e.g., Foundation Earth, rather than establishing your own method.
Engage with peers. Get a coffee (with Oatly). Speak to others and learn from their experiences.
The window to be a pioneer brand in climate labelling is closing. It is likely that you are going to have to do it one day, you might as well get ahead of the curve and benefit from first-mover status.