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Why Companies Can’t Ignore Carbon Footprint Outside Operations

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Posted August 19, 2016

More than two-thirds of a company’s total greenhouse gas emissions could occur outside its direct operations with consumer end having a significant impact on energy consumption.

Carbon capturing and storage has potential of significantly reducing human-caused air pollution. Image credit: Uwe Hermann via Wikimedia, CC BY-SA 2.5

Image credit: Uwe Hermann via Wikimedia, CC BY-SA 2.5

While increasing focus on carbon footprint reduction is providing corporates with tangible results in terms of energy cost savings, most of them are addressing their own carbon emissions and don’t consider green opportunities outside their operations. The actual reward could be much larger for companies if they looked at their indirect carbon emissions as well—according to Hugh Jones, managing director, Business Advice, Carbon Trust. These indirect emissions (to the environment) could range from the development of a product or service through to supply chain, logistics, sales and distribution, and customer usage.

Surprisingly, indirect emissions are one of the most significant contributors to a company’s carbon footprint. British pharmaceutical company GlaxoSmithKline, for example, discovered that 80 per cent of its overall carbon footprint came from indirect emissions and 40 per cent of this was from consumer end use. US-based food company General Mills too has found that almost two-thirds of its total greenhouse gas emissions occur beyond its direct operations.

While companies can work with suppliers, distributors and other industry partners to reduce their carbon emissions, they can explore opportunities at consumer end as well. In fact, companies can reduce the carbon footprint of their supply chains and improve customer satisfaction by giving consumers information and tools to make green choices, according to a research conducted by the Energy Department’s National Renewable Energy Laboratory (NREL) and published in the Proceedings of the National Academy of Sciences.

The findings are drawn from a series of experiments designed to measure consumer preference of various approaches to making more environment-friendly purchase decisions in online transactions. Researchers looked at methods of presenting carbon footprint information–a practice commonly referred to as eco-labeling. The research team also looked at the impact of offering consumers the option to add carbon offsets to their bills. The experiments focused on four sectors: online retailing, ride sharing, video streaming and short-term lodging.

“Consumers who wish to reduce greenhouse gas emissions embodied in their purchase decisions can be stymied by lack of reliable and accessible information,” NREL’s Steven Isley, the lead author of the report said. “Our experiments indicated that by taking simple steps to gather and share emissions data at the point of purchase—and offering greener alternatives—vendors can increase the likelihood that consumers will make greener choices. We also saw indicators that providing such options can increase satisfaction of green-minded consumers.”

“Our findings indicate that the ways in which we design, deliver, and optimize consumer services can have a major impact on our energy consumption in the 21st century, and that is in part due to the vast scale of the consumer services sector,” said Doug Arent, who leads the area of work for NREL and is executive director of the Joint Institute for Strategic Energy Analysis.

Written by Uma Gupta, Contributing Author for Technology.Org

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