Trial schemes for carbon labelling consumer products began around 2007-8. Tesco committed in 2008 to carbon label all products by 2012 as part of a government-backed pilot scheme. At the time its product range comprised around 75,000 different items. They carbon labelled about 100 products then realised that, at the rate they were carbon auditing them, it would take around 500 years to label the rest, so they abandoned the programme. Carbon auditing products across the supply chain was also found to be an expensive exercise. Boots carbon-labelled 8 shampoos and it cost quarter of a million pounds.
Efforts were, nevertheless, made at the time by organisations such as the Carbon Trust to standardise the measurement of product carbon footprint. Some developed carbon footprinting software – tools for enabling the calculation and recording of direct (scope 1) and indirect electricity-related (scope 2) emissions in accordance with the Greenhouse Gas (GHG) Protocol. The collection of scope 3 emissions from upstream suppliers and logistics providers presented a bigger problem, particularly for companies with complex, global value chains. Over the past decade, however, many businesses have strengthened their ability to collect, disaggregate and report emissions across all three scopes.
Interest in the subject is now rising again but there is still the issue of validation. Who will be responsible for this? Government agencies? Carbon auditors? There is the risk that if companies feel that they can derive a financial advantage from offering lower carbon goods and services, they will be tempted to under-report their emissions, especially if nobody is monitoring this.
Added to this, there are differences in the seasonal sourcing of a product – for example, Pepsico carbon-labelled its Walker crisps, but did not vary the CO2 figure to reflect the sourcing of potatoes from different places at different times in the year.
A big concern is, would carbon labelling induce a big enough consumer response? Choice of product is often price associated. When buying fruit juice for example, if one carton costs £3 and produces 50g of carbon per litre and one is £1 and produces 70g of carbon per litre, would the average consumer go for the lower carbon product or the cheaper one?
Is there a way forward?
The measuring of carbon emissions is advancing – Blockchain can track carbon emissions across the supply chain and start-ups such as Tracks based in Berlin have developed software that measures transport emissions and collects primary data in real time. The challenge lies in disaggregating this vehicle emissions data. The break down is from truck to pallet to case to individual product. There is a big difference between a carton of orange juice and a fridge for example. With electrical appliances, most emissions come from the use of the product, not from its manufacture and delivery.
A better way of reducing carbon emissions in the supply chain could be through ‘choice editing’, focusing on the behaviour of retail buyers rather than the consumers, so looking upstream rather than downstream. Buyers could source products from lower carbon producers, looking at their overall carbon efficiency and finding suppliers that use renewable or low carbon energy and transport, so railways instead of trucks for example. In this way, they take more responsibility for reducing the CO2 which is embedded in products.
In conclusion, the prospect of carbon labelling is being met with understandable scepticism. As Alan McKinnon stated in a letter to the FT on the 25 November 2020 ‘’We definitely need to increase carbon transparency across supply chains but should be wary of attempting this on a large scale at product level’’.
Source: Foundation for Future Supply Chain, November 4th, 2021
Author: Julia Swales