Even the longest journey begins with the first step. That – or using words to that effect – is how the Chinese philosopher Laozi put it as far back as more than 2,500 years ago. In view of the climate crisis, a present-day Laozi might put it like this: knowing and evaluating one’s environmental footprint is the first step on the long journey toward more eco-friendly products. What’s more: the carbon footprint is increasingly becoming a vital benchmark of entrepreneurial action because only businesses that break down the environmental impacts of their portfolios in detail can precisely and effectively counteract them.
Green scores on many playing fields
Word that the journey toward greater eco-friendliness pays off not only from an environmental perspective but is increasingly turning into an economic necessity has gotten around by now because in view of climate change a small carbon footprint is a more and more compelling sales proposition – both with consumers at the cash register and within the supply chains. In addition, a small carbon footprint helps companies improve their position on the labor market. Green scores in either case – with consumers, with customers, with colleagues.
In addition to image and reputation, there’s another factor playing an increasingly relevant role: carbon emissions become measurable costs, for instance because of the EU’s emissions trading system. It attaches a price tag to the CO2 emissions of energy-intensive industries such as oil refineries, steel production, or aviation. Starting in 2026, companies will have to buy emission certificates via the Carbon Border Adjustment Mechanism for many of the carbon-intensive goods imported into the EU. Through this taxation system greenhouse gas emissions generated outside the EU are supposed to receive a CO2 price corresponding to the one of the European Emissions Trading System. China, the United Kingdom, and South Korea are using similar approaches and other countries are going to follow suit. Consequently, products with a large carbon footprint will become clearly more expensive. At the same time, a small carbon footprint puts businesses in a position to offer a lower-cost portfolio – climate-conformant action increases competitiveness in the medium and long run.
It takes more than a quick glance to correctly interpret the traces of a carbon footprint. Instead, the greenhouse gas (GHG) emissions of a product that are generated during its entire lifecycle and/or selected stages must be broken down. That provides a company with insights into the emissions relating to raw material extraction, manufacturing, transportation, storage, utilization, and disposal of the product and enables it to act in relevant areas.
The carbon footprint also includes all other GHG emissions such as nitrous oxide (aka laughing gas, a waste product of chemical and combustion processes) and methane. Their emissions are converted into so-called carbon dioxide equivalents (CO2e) and added to the carbon footprint. That’s why the term GHG footprint is frequently used as well.
Overview of selected greenhouse gas emissions along the supply chain
Scope 3 upstream:
Scope 1 and 2:
Scope 3 downstream:
A jigsaw of thousands of datasets
The precision at which a carbon or GHG footprint can be captured decisively depends on the quantity and quality of the usable data base along the entire supply and production chain. The simpler, albeit still complex part encompasses the per-unit emissions that are generated during the production process. It’s a complex effort because product development, logistics, or even administration must be factored into the calculations as well. That means that even emissions from the oven in the company’s cafeteria or air conditioning of the offices would need to be allocated to the product.
These GHG emissions from sources owned or controlled by the reporting company are allocated to Scope 1 and Scope 2. Scope 1 encompasses all GHG emissions caused by primary energy sources consumed directly by a company’s activities. That may be a gas-fired forging process just like the oil heating system for the factory floor, or the vehicle fleet using IC engines. A leak of refrigerant from the air conditioning system is included in Scope 1 emissions as well. Scope 2 encompasses indirect GHG emissions resulting from the production of the purchased energy. Examples of such secondary energy sources are district heat or electric power. Hence, unlike the vehicles with IC engines in the fleet, an electric vehicle falls under Scope 2. This example alone shows the complexity of the matter.
The situation becomes even clearly more complex when factoring in the upstream and downstream processes, i.e., Scope 3, of the product creation process. Upstream processes, among other things, include purchased raw materials, goods and services, manufacturing of the production machines, delivery logistics as well as business trips and commutes of all the people involved in making the product. Downstream processes, among other things, must include downstream transportation, potential further processing of the reporting company’s product as well as its utilization and recycling at the end of its lifecycle.
About 90 %
of worldwide emissions are supposed to be reduced to net-zero.
Source: International Carbon Action Partnership
As described above, it’s a complex matter. To help clarify things, let’s walk through the GHG emissions in Scopes 1, 2, and 3 of a leather shoe. There’s the cow in the barn. The barn is illuminated, perhaps even heated. The cow needs fodder the digestion of which causes a lot of methane to escape. At some point, the cow will be sent to a butcher, after which its leather is tanned and dyed before being sent to the shoe manufacturer. There, the animal’s skin is cut, sewn, and glued to a rubber sole. Metal eyelets and textile laces, plus a cardboard box are part of the package as well – all of it produced by commuting employees and shipped by diesel-powered trucks. Now the finished shoe starts traveling, first to a wholesaler, then to a retailer, and finally to the consumer. Ships, trucks, cars, buses, trains – whenever the shoe is on this journey greenhouse gases are emitted. And they won’t be the last emissions because at the end of its life, the shoe must be recycled or disposed of, which generates further emissions. How many in total? That’s hard to say. During our research we found statistics between 7.34 and 55.12 kilograms (16.18 and 121.51 lbs.) of CO2e per pair of leather shoes. Each source referred to further sub-sources and considered other sources within the Scopes. Or in common parlance, your guess is as good as mine.
For Schaeffler’s sustainability expert Dr. Johannes Möller that’s exactly where the greatest challenge lies. He says, “Of crucial importance for the calculation of a product-specific carbon footprint is a transparent, high-quality, and easily accessible data basis.”
In the absence of verification, there must be trust
It’s just that there’s no legal framework for collecting the data and calculating the carbon footprint of a product. What does exist is a myriad of standards and certificates such as the Publicly Available Specification 2050 (PAS 2050), the Greenhouse Gas Protocol, and ISO 14067.
The Greenhouse Gas (GHG) Protocol is based on the resolutions of the 1997 Kyoto Protocol with which the international community agreed on binding goals and actions to combat climate change. With the help of more than 30 partly complex tools and databases that the GHG Protocol website (ghgprotocol.org) makes available, companies can determine the carbon footprint of their products and their entire organization and reference those results to the GHG Protocol. That’s complicated as well, but at least it’s feasible.
CO2 calculation systems offered by various providers are somewhat more convenient and simpler. These tools, which are typically fee-based, require information about material selection, structure of the supply chain, the factory floor, logistics, transportation, and administration as a minimum. The calculation of the individual carbon footprint of a product is then based on the millions of individual data items that have been assembled in their databases.
Ensuring that data are truly reliable and verifiable requires internationally applicable standards, statutory standards, and potential sanctions.
That’s why Schaeffler is currently using a three-pillar principle to err on the side of caution. “We exchange data with our suppliers, use external databases as well as internal expertise in the CO2 assessments of our products,” explains Schaeffler’s sustainability expert Möller. Based on this elaborate procedure, Schaeffler has already determined carbon footprints for a large part of its products. Combined with anticipated sales figures, these data also help the motion technology company develop and prioritize emission reduction actions.
Raw materials have the largest carbon footprint
The key area for adjustments has already been localized in almost all manufacturing sectors: the raw materials utilized account for the lion’s share of GHG. This share includes all emissions from the extraction of raw materials to staging and hauling them to the downstream processing company. Let’s look at the example of the shoe again. The Italian outdoor footwear brand Aku has localized 80 percent of its carbon footprint in the materials used, responded accordingly, and now preferably uses recycled microfibers. That sounds like a simple solution but is simple only to some extent because Aku’s product and sustainability manager Giulio Piccin feels that the negative carbon footprint of leather reflects only part of the truth. On the industry website fashionunited.de he said, “Looking realistically at the subject, we must say that leather is a waste product of the meat industry. No cows are bred because of leather. If the shoe industry stopped using leather the leather would still exist, it would be waste, and would have to be disposed of. But that’s not factored into the calculation.” In his view, it would be fairer to start capturing the carbon footprint only from the moment when skins are processed into leather because those are processes that his industry could affect.
That’s another chain of arguments emphasizing that the complex calculation as well as the realistic assessment of a carbon footprint remain a complex matter – but that makes it no less important, “because the carbon footprint is a key control parameter for efficient reduction of greenhouse gas relevant emissions,” says Schaeffler’s sustainability manager Michael Lehanka. Whether they’re a footwear manufacturer or a motion technology company: businesses around the globe are working on minimizing their carbon footprints to the point where they’re beyond recognition. It’s still a long journey, but at least the first steps have been taken.