Climate change and environmental degradation pose existential threats to our planet. Global efforts are intensifying to reduce greenhouse gas (GHG) emissions, exemplified by initiatives like the European Green Deal, which aims for a sustainable economy with no net emissions of greenhouse gases by 2050.
For businesses, this means minimizing GHG emissions and defossilizing wherever possible. To strategize effectively, companies first need to measure and understand their environmental impact.
While corporate carbon accounting provides a comprehensive overview of total GHG emissions from a company’s activities, it lacks actionable insights for emission reduction on product level. Lifecycle Assessments (LCAs), including Product Carbon Footprints (PCFs), offer in-depth analyses of the environmental impact of products, forming the foundation for effective GHG reduction strategies.
The Critical Challenge of Scope 3 Emissions
Understanding and measuring emissions sources in the context of LCAs is very crucial for targeted reduction efforts. The Greenhouse Gas Protocol classifies emissions into three scopes:
Scope 1: Direct emissions from sources owned or controlled by the organization.
Scope 2: Indirect emissions from the generation of purchased energy.
Scope 3: All other indirect emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions.
According to Together for Sustainability (TfS), an initiative led by chemical procurement specialists, Scope 3 emissions account for over 70% of the total GHG emissions in the chemical sector [1]. These emissions present significant measurement challenges due to the lack of data from external suppliers.
To effectively mitigate Scope 3 emissions, a deep understanding of each product’s environmental impact is essential. This challenge spans various departments – procurement, product development, R&D, engineering and sales – requiring cross-functional collaboration.
The Power of Scenario Analysis
Numerous options exist for cutting GHG emissions, but they vary wildly in effectiveness. Focusing resources on the most impactful measures is crucial, and that's where scenario analysis comes in. Imagine having a crystal ball that reveals the environmental impact of your decisions before you even make them. That's the power of scenario analysis.
This powerful technique allows you to explore different "what-if" situations and see how they affect your GHG footprint. In the following sections, we'll delve into the scenario tool offered by the AllocNow Product Sustainability Platform (PSP). This innovative tool empowers you to identify the most effective opportunities to reduce your emissions, ensuring you get the biggest bang for your buck.
Scenario Tool for Scope 3.1 Emissions
The AllocNow PSP empowers users to assess the environmental impact of changes to Scope 3.1 emissions – the raw materials purchased from external suppliers. By simulating changes in their sourcing strategy (e.g. supplier mix, alternative emissions profiles, etc.) and assessing their impact on specific PCFs, companies can make informed decisions about raw material procurement.
This helps identify and prioritize suppliers that align with eco-conscious goals, significantly reducing Scope 3.1 emissions across operations.
Picture 1: The PSP shows the Impact [kg CO2 eq/kg] in Comparison to the Baseline
Scenario Tool for Scope 2 Emissions
Scope 2 emissions come from purchased energy sources. Green energy adoption offers a significant lever for reducing emissions, but costs remain a concern. The AllocNow PSP allows companies to model the impact of shifting to renewable energy sources on a product-by-product basis. This empowers informed decisions about green energy allocation, maximizing environmental benefits without sacrificing profitability.
By assessing different energy mixes, including shifts to renewable alternatives, companies can visualize the impact on PCFs. This empowers production, engineering, and HSE teams to explore strategies for reducing Scope 2 emissions. Such proactive approaches support informed decisions aligned with climate neutrality objectives and effective green energy allocation, contributing to the company’s sustainability goals.
Picture 2: The PSP shows the New Impact [kg CO2 eq/kg] per Scenario
Scenario Comparison Feature: Collaboration is Key
The AllocNow PSP fosters collaboration across departments. Scenario sharing and comparison features allow teams from procurement, engineering, product, R&D, marketing, sales and finance to jointly evaluate the environmental and business implications of different strategies. This eliminates guesswork and ensures decisions prioritize both sustainability and business goals.
Picture 3: Visualization of Scenario Comparison
Leading the Way in Sustainability
The AllocNow PSP equips companies with powerful tools to navigate the path to a sustainable future. By facilitating effective Scope 3 and Scope 2 emissions reduction, the platform empowers impactful, eco-conscious initiatives.
AllocNow: Your Ally in Achieving Sustainability Goals
If your company is serious about reducing its environmental footprint, the AllocNow PSP is an indispensable ally. Contact us today to learn more about how our platform can help your business achieve its sustainability goals.
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