Climate change is occurring. Looking at a million years of historical data, global temperatures have increased by 1°C since the industrial revolution, and atmospheric CO2 concentrations are at their greatest level ever.
Although it might be challenging to know where to begin, businesses should take actions to minimise, eliminate, and offset their carbon footprint.
This manual will provide you with the tools to assess, comprehend, and mitigate the carbon emissions caused by your packaging.
What are carbon emissions?
As a greenhouse gas (GHG), carbon dioxide traps heat on Earth and prevents it from escaping into space when it is present in the atmosphere. Although not the sole GHG, it is the one that is emitted the most frequently. For instance, methane (CH4), which is released from the decomposition of materials in landfills among other sources, has nearly 21 times the potential for warming as CO2.
You measure all gases and evaluate how much more impactful they are than the same amount of CO2 over a defined period of time to determine the total GHG potential for warming. The gases are then changed into a CO2 equivalent so that a single number can be obtained.
The terms "GHG" and "CO2e" are sometimes used interchangeably since this figure represents the total carbon dioxide equivalent of all GHG gases. To determine the amount of warming that CO2 would cause over a 100-year period, temperature change estimates are computed using GHG potential and CO2e, which is quantified in tonnes.
A company's overall GHG emissions can be divided into three scopes, which are referred to as components. Anytime you discuss emissions, it's critical to understand what scope you're referring to. True carbon neutrality encompasses all three scopes, yet when people talk about becoming carbon neutral, they only mean Scopes 1 or 2.
Direct Emissions: Scope 1 These are emissions produced by your business, such as those from boiler combustion or company vehicles. This has the smallest reach of the three because the majority of businesses buy power rather than producing their own.
Scope 2: Energy Indirect Emissions: Your business's energy purchases for direct usage are the source of these emissions. This scope takes into consideration the energy that is bought for things like operating an office or internal fulfilment facility.
The other indirect emissions that your business is accountable for fall under scope 3: upstream, downstream, and end-of-life emissions. This has by far the broadest span, is the most amorphous, and is the hardest to monitor. In your product's manufacturing supply chain, from raw material extraction and processing to final production and distribution to your warehouse, Scope 3 essentially accounts for all embedded emissions.
It is crucial to assess your scope 3 emissions to avoid drastically underestimating the influence you are having on the planet because footprint tends to grow rapidly from one scope to the next.
Calculating scope 1-3 CO2e emissions
Now tell me how you figure out your scope 1-3 CO2e emissions. There are several approaches, but a Life Cycle Analysis is by far the most popular (LCA). Process LCAs and Economic Input-Output (EIO) LCAs are the two primary categories of LCAs. Each has benefits and drawbacks.
Process LCAs start from the ground up, whereas EIO LCAs work from the top down.
You track the production and sale of all your goods as well as all of your business activities, such as travel, office supplies, utilities, snacks, etc., in a process life cycle analysis (LCA). Follow the supply chain all the way back through manufacturing and transit until you reach the raw material extraction.
Track everything forward and determine the impact on emissions based on actual upstream and downstream supply networks, as well as disposal. For instance, your product decomposes in a landfill after two years of usage, producing CO2 and methane as it does so.
For a situation like business travel, you would have to take into account the passenger's share of fuel burn, the snacks they consumed, and the embedded emissions of the aircraft via the percentage of the aircraft's total use that your employee used.
This kind of LCA is the most thorough. A third party is needed, the LCA process can take months, and it can cost tens of thousands of dollars. A process LCA frequently undershoots emissions by as much as 50% since it is so detailed. Model leakage is what happens when you use an approach like this, and it is unavoidable because you can't reasonably keep track of every potential emission thread.
An Environmental/Economic Input-Output (EIO) model is a different kind of LCA. With a top-down approach to estimating emissions, EIO LCAs give you a high-level estimate of your footprint by considering the economic value of your company's products and services as well as industry- or material-specific emission factors. Imagine doing this by looking at an industry's GDP and total carbon footprint, then utilising that data to calculate the emissions per dollar of economic activity. There are frequently nation-specific modelling techniques that make use of public data, such the Producer Price Index (PPI) from the Bureau of Labor Statistics. The United States Environmentally Extended Input-Output model (USEEIO) by the EPA, which we shall return to in the instances, is one of the most reliable.
Any EIO device has the advantage of being rapid, affordable, and practically leakage-free. The disadvantage is that, because it just considers averages, it is indifferent to nuances of your company's supply chain or business procedures. In a global economy, it can also be regionally specific, which is challenging. This model will be more precise and more suited to the particulars of your business if you can identify more specific buckets for your industry or substance. Finally, no incidental GHG sequestration is taken into account by this particular model. Even though it's rare, inadvertent sequestration frequently occurs during the lifespan of different items. This sequestration is actually significant in the case of plant-based goods like paper. Any carbon emissions that are emitted at the plant's end of life are mostly countered by the carbon that was absorbed during the plant's growth in this case, a tree. Since this model does not account for the sequestration, paper might really perform better than it would seem.
The USEEIO is the greatest model to use as a starting point since it can show you exactly where you stand in terms of your carbon footprint now and where you can make improvements. We'll use this model to analyse packaging, but bear in mind that your company's entire footprint may only include a small portion of packaging.
Calculating your packaging footprint
Let’s look at the spend of the hypothetical company, Shipping Things. Currently they are spending $1.43 on domestically produced corrugated boxes and shipping about 10,000 units a month. To do the math, we’re going to use the EIO calculator from Carnegie Mellon University based on the USEEIO model.
$1.43 / box × 120,000 boxes/year = $171,600/year
For the corrugated boxes, we selected the latest model with the applicable sector: US 2007 PPI; Wood, Paper, and Printing macro sector; Cardboard Containers detailed sector. To use the calculator, we have to convert the Shipping Things annual box spend into millions of dollars. The $171,600 annual spend is $0.1716m. We select Greenhouse Gases as our category, then run the model.
The results show that the CO2e impact of Shipping Things annual box spend is 138 tonnes. It would take 180 acres of forest a year to sequester that much CO2e!
138 tonnes ÷ $171,600 annual box spend = 1.78 lbs CO2e/dollar spent on corrugated boxes in the US
As the company grows, we can scale this model easily by calculating the CO2e impact of each dollar that Shipping Things spend on corrugated. By dividing the annual tonnes of CO2e (138) by the annual spend ($171,600) we get a factor of 1.78 lbs of CO2e per dollar we spend on corrugate. This factor is very useful for comparing average emissions across packaging categories to guide better decisions.
Let’s say that Shipping Things is considering switching from domestic boxes to poly mailers made in China. The tool we are using is US-specific, but we can add more information to get a rough sense of how producing in China would compare to the US. By finding the GHG per dollar of Gross Domestic Product, we can see that on average, China is currently emitting about 4x the GHG per dollar of economic value vs the US.
1.78 lbs CO2e/dollar spent on US corrugated boxes × 4 = 7.02 lbs CO2e/dollar spent on China corrugated boxes
The CO2 calculator also breaks out contributing sectors. This is great because it can help you identify areas to improve your supply chain footprint. For the Shipping Things boxes, we see that electricity is the biggest contributing factor, followed by processing of the input materials of the corrugated and paper.
You can do this same exercise for the rest of your business, or just jump straight to your end product if there is an appropriate sector. Use your selling price, and see the total emissions for your company. From there keep calculating to get a better idea of where all of your emissions are coming from.
Decreasing and offsetting your emissions
What can you do about it now that you are aware of your packaging footprint? The obvious first step would be to use less packaging. The EIO method's ability to reduce emissions while also cutting COGS is one of its many wonderful features.
Consider moving to packing that has less of an impact as a second alternative. Consider poly mailers if you are delivering clothing in corrugated boxes. Even though per-dollar emissions for poly mailers made in China are far greater than those for domestic corrugated boxes, when you consider cost, it can be an excellent alternative based on our prior examples and the unique category criteria. The footprint of each item would decrease by more than half if we switched from corrugated boxes to poly mailers!
Third, consider ways to improve your supply chain so that it uses fewer emissions than the industry average. Corrugated was mostly affected by the electricity required to build containers, therefore Shipping Things might partner with businesses that generate their own solar power or another form of renewable energy. Direct transport accounted for just under 7% of the total emissions for corrugated containers. The number of miles (and corresponding emissions) travelled between the factory and the distribution hub is reduced when local production is chosen.
And lastly, reduce your emissions! Although carbon offsetting merits its own in-depth examination, it is a fantastic strategy to combat climate change as we transform supply chains to become carbon-neutral. Through a trusted marketplace like The Degradable, Shipping Things may reduce the impact of their use of corrugated cardboard for just a few thousand dollars a year. Examine the carbon impact of your business and consider what you might do to make the future a little bit more promising.
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