Climate Action In The Value Chain
Traditional Coatings’ Journey to Net Zero
The world is calling for governments, businesses and communities to combat the climate crisis.
However, the Australian Government’s policy commitments about reducing our Greenhouse Gas emissions has made insufficient progress towards creating the necessary climate-resilient roadmap that will limit our contribution to global warming and its impacts.
Businesses, on the other hand, with their scale, reach, and resources, have a vital role to play in the effort to limit global warming to 1.5°C in line with the Paris Agreement targets.
For organisations – particularly those within the energy and resources sector - to reach ambitious climate targets is to go beyond direct company operations and tackle value chain emissions in their extended scope of responsibility.
In so doing, companies will be able to rapidly respond to internal and external pressures for climate action, and better manage environmental and market risk across complex supply chains.
Carb Zero (a certified Climate Active consultancy) believes that a transition to a
low-carbon economy is growing momentum and that companies that are aligning their strategies with this step-change are opening themselves up to a world of opportunity.
By setting science-based targets, key business benefits include improving the environmental landscape, mitigating anticipated regulatory risks, building a stronger brand, responding to investor pressure, initiating innovation, generating efficiencies and savings, and achieving a competitive advantage.
More and more companies are eyeing net zero emissions by 2050 and aiming for even more ambitious and comprehensive goals. For example, FMG has set a net zero emission target by 2030.
So, how can Tier 1 companies like Monadelphous, AGC, UGL, Downer (and others) and their contract suppliers support the big resource and energy sector companies to align their carbon emission reduction strategies and move toward net zero emissions?
This article outlines the roadmap by which Carb Zero mentored Traditional Coatings through its ambitions to gain carbon neutral accreditation from Climate Active (CA) by June 2022.
The process aims to assist an organisation reach zero carbon emissions, not only from its own operations, but ultimately, through that of its value (or supply) chain as well.
Phased Approach
To reduce value chain emissions, a threephase process was undertaken.
The first phase entails mapping the upstream and downstream organisations within the value chain.
Phase two entails initiation of pilot projects to demonstrate effective emission reduction strategies while phase three focuses on engaging and collaborating with suppliers.
In the first step to achieve and maintain a valid and credible carbon neutral claim against the CA’s Organisation Standard, the responsible entity must:
• Calculate its own Scope 1, 2 and 3 emissions
• Develop and implement an emissions reduction strategy
• Purchase offsets to compensate for remaining emissions
• Arrange independent validation
• Publish a public statement of the carbon neutral claim.
Once calculations have been assessed and reductions put in place, the remaining emissions can be offset by purchasing credits that further reduce an organisation’s carbon footprint. Carb Zero has partnered with Ecoprofit, specialising in the procurement and sale of carbon offsets to help organisations achieve net zero emissions.
Once the reporting entity has monitored its own carbon footprint and engaged in effective decarbonisation strategies, assessing the Scope 3 landscape within the value chain is the next big challenging task. By assessing the Scope 3 Landscape an organisation must:
• Define business goals and review accounting principles, identify emissions activities and set the boundary,
• Identify and understand risks and opportunities associated with value chain emissions,
• Identify GHG reduction opportunities, set reduction targets, and track performance,
• Engage value chain partners in GHG management and
• Enhance stakeholder information and corporate reputation through public reporting
Companies must identify their most significant greenhouse gas (GHG) reduction capabilities and reduce emissions across their own operations (Scope 1 and 2 as defined by the GHG Protocol) as well as across upstream and downstream value chains (Scope 3 emissions, which overlap with the suppliers’ Scope 1 and 2).
To make significant impact on a reporting company’s emissions reduction strategies, they need to focus beyond the activities of their Tier 1 suppliers and target the wider value chain.
This becomes difficult for the reporting company to accurately assess the emissions produced within their value chains and is why Traditional Coatings has taken the initiative to become carbon neutral itself; to assist reporting entities engage with their suppliers to set their own science based targets and mitigate the impact of climate change.
Data Details
One of the most challenging aspects of assessing value chain emissions is the collection and calculation of accurate data. This becomes increasingly difficult to assess because of the shifting landscape for supply of materials, goods and services.
Carb Zero has the capacity to mentor organisations and their value chain operatives design a data management plan which documents the GHG inventory process and provides a means by which organisations can negotiate these hurdles.
In order to accurately make sense of energy consumption and carbon emissions for clients, Carb Zero – in collaboration with Carbon Training International – uses Simble’s Simblesense + IoT business energy monitoring platform and its Carbonview
carbon accounting and management platform software.
The business energy platform allows businesses to understand its energy usage and reduce consumption remotely using IoT technology.
Features include circuit level monitoring and control, data analytics, measurement and verification and multi site comparison.
The Carbonview platform is an all-in-one dashboard to track progress towards sustainability targets which meets International Standards of compliance - GHG Protocol, and NGERS - and offers a cost-effective solution for businesses which have to comply with the Australian Govt’s compliance framework.
The platform provides businesses with advanced analysis for informed decision making and transforms energy and resource data into insightful reports and results.
It connects directly with multiple information sources to collect, track and manage energy consumption and carbon emissions across the entire entity.
It provides a single database for all sustainability data in an organisation offering intelligent analytics and allows businesses to identify opportunities to mitigate greenhouse gas emission as well as calculate and report with confidence on their carbon footprint.