Supply Chain Sustainability
Sustainable Business Network 19 March 2021

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd© Carbon Footprint Ltd 2021

Agenda•••SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd

Legal & Market Update - Dr Wendy Buckley, Chair SBN North Hants
Supply Chain Sustainability – Alasdair Silverman & Catherine Westoby, BEIS
Supply Chain Carbon Footprinting – Myles Howard, Carbon Footprint Ltd© Carbon Footprint Ltd 2021

Legislation & Market Trends
Dr Wendy Buckley
Carbon Footprint Ltd01256 592599
wendy.buckley@carbonfootprint.comSBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd© Carbon Footprint Ltd 2021

Are You Measuring your Supply Chain Footprint?

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd© Carbon Footprint Ltd 2021

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint LtdImages courtesy of Andrew Parsons, UNFCCC, GETTY Images and the BBC© Carbon Footprint Ltd 2021

International Energy Agency (IEA) 2020 Global Review•Primary energy demand dropped 4% causing a 5.8% reduction in CO2e– Largest annual % reduction since WW2– Decline of 2,000 million tonnes

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd•

Reduction in oil usage of 8.6% - road transport accounts for 50% of decline with aviation account for 35%•

Have rebounded to pre-lockdown levels© Carbon Footprint Ltd 2021

Significant Environmental Fines & Prosecutions•Thames Water fined £2.3 million– Over 1000 fish and other water life dead after ammonia high sewage
pollution incident in Henley-on-Thames– No adequate monitoring in place and not responding to alarms highlighting
faults in system– Turnover is around £2 billion•Flybe hit with £52m environmental penalty largest corporate environmental
fine in the UK’s history (calculated under the EU ETS rules) to cover planeemissions.

•Lack of action against Farming water violations from the Environment Agency(EA):– 243 violations since 2018 recoded with no prosecutions or fines issued– Aims to prevent water pollution by requiring better water management– Run off from agriculture is the biggest single polluter of rivers– Legislation states that fixed penalties of £100 - £250,000 can beissued

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd© Carbon Footprint Ltd 2021

Streamlined Energy & Carbon Reporting (SECR) & Implications• Companies are now reporting – some about to report for their second year
• Second year report requires making a comparison to the previous year offigures and actions taken.
• Company or LLP qualifies if satisfies two or more of the following
requirements: (exempt if use <40MWh of energy)– Turnover £36 million or more
– Balance sheet total £18 million or more
– Number of employees 250 or more

• Enforced by The Conduct Committee of the Financial Reporting Council

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd© Carbon Footprint Ltd 2021

Upcoming Changes• Environmental Watchdog will be launched on an interim basis in July 2021
– Ahead of formalisation of the Environmental Bill
– Will publish independent assessments of Government’s 25 Year Environmental Plan
– Develop Office for Environmental Protection’s strategy– Dame Glenys Stacy will Chair• UK Carbon Emissions Trading Scheme (ETS) will launch in May 2021
– Will operate in similar way to EU ETS– Stricter – tighter emissions cap and higher fines– Increases risk for miscalculating footprint (as seen with Flybe)– Can register now• Right to Repair – ministers confirm implementation of EU legislation– Manufactures will be obligated to make spare parts– Aims to extend product lifespans to up to 10 years– ‘Summer 2021’

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd© Carbon Footprint Ltd 2021

New Environmental Land Management Schemes Rollout PostBrexit• Aim to reward environmental land management focusing on sustainable farming,
local nature recovery and landscape recovery• Pilot Sustainable Farming Initiative in 2021 for 2022 launch - Submit interest by 11thApril• Local Nature Recovery and Landscape Recovery piloting in 2022 for 2024 launch– Includes large scale tree planting, restoring wilder landscapes and restoring peatland and salt marsh• Funded by gradual reductions in Basic Payment Scheme (BPS) payments (2021 – 2027)– Grants for farms requiring certain land management (e.g. 5% of land for good of environment)• Estimated 100,000 tCO2e additional carbon savings over 2023-2027 up to 300,000
tCO2e between 2028-2032

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd© Carbon Footprint Ltd 2021

UK Extension To Green Grants•

Desire for green recovery•

Domestic Renewable Heat Incentive (RHI) and Green Homes Grant extended till March 2022.
– Vouchers for energy efficiency upgrades– Funds up to 2 thirds of the cost of green home improvements up to £5,000, or 100% of the cost for homeowners onlow incomes, up to £10,000•

National Infrastructure Bank– National Infrastructure Bank will support regional growth– Aims to tackle climate change by renewable energy, carbon capture, storage and transportation– £12 billion initial capitalisation and is expected to support at least £40bn of investment•Net Zero Innovation Fund
– Provides funding for low-carbon technologies– Competitions for funding will be launching throughout 2021 including £20 million competition to develop floating
offshore wind projects)– £1bn fund•Sovereign Green Bond to be released Summer 2021 (£15bn of green gilts to be released)•UK’s Net Zero goal will be added to the remit of the Bank of England

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint LtdImage courtesy of GETTY Images© Carbon Footprint Ltd 2021

References / Useful Links•••••
•
••
•
•
•••
•
•
•

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd

Race To Zero Campaign | UNFCCC
Thames Water fined £2.3m for environmental offence – BCL Solicitors LLP
Revealed: no penalties issued under 'useless' English farm pollution laws | Farming | The Guardian
Airline hit with £52m environmental penalty (endsreport.com)
Environmental land management schemes: overview - GOV.UK (www.gov.uk)
Interim Office for Environmental Protection to be launched - GOV.UK (www.gov.uk)
Global Energy Review: CO2 Emissions in 2020 – Analysis – IEA
Covid-19 paused climate emissions – but they're rising again - BBC Future'Right to repair' law to come in this summer - BBC News
Participating in the UK ETS - GOV.UK (www.gov.uk)
UK carbon emissions trading scheme to launch in May (businessgreen.com)
Budget 2021: UK Infrastructure Bank to be based in Leeds - BBC NewsNet Zero Innovation Portfolio - GOV.UK (www.gov.uk)
Budget 2021: Key climate and energy announcements | Carbon Brief
The ten point plan for a green industrial revolution - GOV.UK (www.gov.uk)
Green Homes Grant extended for extra year - GOV.UK (www.gov.uk)© Carbon Footprint Ltd 2021

Agenda•••SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd

Legal & Market Update - Dr Wendy Buckley, Chair SBN North Hants
Supply Chain Sustainability – Alasdair Silverman & Catherine Westoby, BEIS
Supply Chain Carbon Footprinting – Myles Howard, Carbon Footprint Ltd© Carbon Footprint Ltd 2021

Thank-you & Get Involved in Further Sessions!

SBN – Carbon Offsetting 8th January 2021
Carbon Footprint Ltd© Carbon Footprint Ltd 2021

Your business & theRace to Zero
Catherine Westoby, SME Net Zero Eng Lead
Alasdair Silverman, BEIS COP26 Biz EngWhat is COP26?
Paris
COP21

Glasgow
COP26

1-12 Nov
2021

Actions andtreaty ‘gap’

Presidency &Net Zero 2050

Dec 2015 theWorld agreed theParis Agreement– limit global
warming to 1.5C.

Summit marks
deadline to aligncurrent actions
with this legallybinding treaty.

UN climate
negotiations inGlasgow. 196
countries + EU.
Major focus ofHMG.

Expect majorinternational
agreements–
implications forpolicy andmarkets.

UK & Italy
President foryear postCOP26. UK’slegal 2050 NZ
goal.

16

UN’s global campaign to rally
leadership and support for azero carbon recovery
Largest ever alliance committed
to net zero by 2050 at the latest
UK’s year of climate action

National campaign committing UK
organisations to Race to Zerobefore COP26

Net Zero public engagement

Net Zero business engagement
17

Andrew Griffith MP
Net Zero Business Champion – appointed by
the PM to support the UK business community
to commit to & take action on Net Zero aheadof COP26

Big businesscampaign

Small & microbusinesscampaign

Race to Zerorecruitment

Massmobilisation

Global Green
Investment
SummitShowing
leadership18

Large business &the Race to ZeroA step-by-step guide (V1)19

What is the Race to Zero?
UN-backed global
campaign to rally
leadership andsupport from nonstate actors on
climate change.

Central goal:
Reducing
emissions to zeroby 2050 at thelatest

Our priority ask ofbusinesses for theCOP26 Climate
Summit in Glasgow
in November.

Already members
span 454 cities, 23
regions, 1,397
businesses, 74 of
the biggest
investors, and 569
universities.

Largest evercoalition ofcredible (peerreviewed) net-zero
initiatives.

20

Race to Zero – The Business Case
Investors and shareholders increasingly want to see action on climate.

Consumers, employees and other businesses will view your company more positively.
Procurement based on climate impact is increasing. Motivate your workforce via green action.

Get the most ‘bang for your buck’ – in positive exposure and in climate impact.

Set the policy and market direction – Governments have committed to a 1.5ºC so regulationand financial incentives are only going one way.
Low carbon businesses are more efficient and resilient. Also a 1.5ºC world is more stable andprosperous.

21Three steps to Join the Race toZero via the Business Ambition for 1.5ºC
Step 1:
Understand your emissions
profile across scopes 1, 2 & 3.

Step 2:CEO to sign this letter
stating that they understandthe need to reach a 1.5ºC world
and will set their business on a
1.5ºC path

Step 3
Be accepted into the Raceby the SBTi and Climate
Champions.

Congratulations!

Work with the SBTi to set your emission targets (SBTs, Science-Based Targets) within 24 months. Once these areapproved, complete the recording requirements to stay on track.
Does your business have fewer than 500 employees? You can enter via the SME Climate Hub.
To note, these steps are to join via the Business Ambition for 1.5ºC. A full list qualifying of initiatives are found here.

22

T&Cs: What am I committing to?
Work with the SBTi to understand thiscriteria and your options. The SBTi verify
emission reduction plans as ScienceBased Targets (SBTs). We can introduce
you to our contact there.

You are committing to aligning to a 1.5ºC
pathway*. There is flexibility - youremissions can reduce more slowly
initially:

Scopes 1 and 2:
Must be well-below
2Cº pathway.

Set detailed targets
to cover next 5 to 15years.

Go net zero across all
three scopes no later
than 2050.

Scope 3: Only included if >40% of total
emissions.
If included, SBT to cover two thirds of scope 3
emissions & align to a 2Cº pathway.

Climate Leader:
Advocate for change& champion yourown action.

*To note: Emission cuts consistent with holding global
temperature rises at 1.5ºC, the stated aim of the Paris Agreement
and seen as the safe boundary by the majority of scientists.
Following a pathway of above 1.5ºC initially will have to becompensated by sharper emission cuts later – although costs ofthis are expected to fall sharply.

23

Additional ways to support COP26
Key ask of Business: Join the Race to Zerothrough Business Ambition for 1.5ºoC
Finance

Energy Transition

NatureClean Transport● Join Race to Zero via
relevant initiative,aligning portfoliowith a 1.5ºC future● TCFD disclosure● Align with Powering
Past Coal Alliancefinance principles● Invest in low carbon
and resilient projects.
● Expand open source
data sets to improverisk models● Commit to renewable
power via RE100.
● Commit to coal freeenergy via Powering
Past Coal Alliance● Boost energy
productivity via EP100● Invest in clean energy
with NZ Asset Owners
Alliance & CA100+● Support the Just
Transition via the BTeam● Support theForests,
Agriculture andCommodity Tradedialogue and commit
to due diligence on
supply chains● Buy only high-quality
nature-based carbon
credits as part of acredible net zero plan
● Sign the Leaders
Pledge for Nature● Commit toelectrifying yourfleet by 2030 andinvesting in EV
infrastructure byjoining EV100● Commit to 100%
ZEV production by2040 or earlier.

Adaptation &Resilience● Join the Race toResilience● Increase A&R
investments indevelopingcountries● Join the Coalition
for Climate
Resilient
Investment andthe Adaptation
Action Coalition

Events and Engagement
Be a part of the conversation and ensure
your company gets the exposure it
deserves by joining the Race to Zero.
Announce your entry to the Race at anevent in the lead to COP26 to stay ahead ofcompetitors.
Events currently include the Business
Ambition Summit and the Global Green
Investment Summit.
25

Small businesses &the Race to Zero
UK COP26 Campaign

Why SMEs?
Business & industry = 25% UK emissions
SMEs:
99% of our 5.87 million enterprises
16.6 million employees (60%)£2.2 trillion of revenue (52%)
Just under half of UK business emissions
Cannot ignore SMEs: whole systems approach27

Campaign objectives
Raise awarenessof climatechange amongsmall businesses &consumers

Encourage
uptake ofspecific actions
to reduceemissions,
supporting UK’s
2050 target

Generate placebased interest &press coverageahead of COP26 inGlasgow.

28

Road to COP26
Andrew
Griffith MP
becomes NZbusinesschampion
Nov 2020

Official campaign
launchSpring/Summer 2021

Regional
eventsFebruary October
2021

COP26
1st – 12th
NovemberDigitalplatform
soft launch
March 2021

Launch ofsector
toolkits
June 2021

29

Campaign strands
Key ask of small businesses: Join the Race toZero through UK digital platform on SME
Climate Hub

National
dissemination

Regional
eventsUK landing page
SME Climate Hub● Six virtual regional

Government
channels● Sharing best•••

Net Zero taskforce large corporations

eventspractice acrossbusiness,government &academia

Local & place-based

Place-based●Local authorities &engagementbusiness networks● Mobilising local

communities, inpartnership withindividual networks& local authorities

Sector-specific

Sectorspecialisation● Commit toelectrifying yourfleet by 2030 and● SME working group
investing in EV
shaping
sectorinfrastructure
byspecificsupportjoining EV100● Commit to 100%
● Assimilating& by
ZEV production
2040 or earlier.
signpostingtoexisting plans andresourcesDigital platform
Drive sign ups to Race to Zero: small businesses

Communicate relevance of climate change & COP26 to business

Provide a ‘one stop shop’ for net zero support and advice

Elevate & signpost sector-specific tools and resources

Present latest news, events & opportunities in lead up to COP26

31

Campaign Activity
EVENTS

Jewellery maker

PRESS

CASE STUDIES

ChocolatierWeb designer

32

Property developer

How you can help:

Sign up toRace to Zero!
& encourage
your members
to follow you

Promote thecampaign
Share on yoursocial mediachannels,newsletters

Share tools &opportunities
on ongoingbasis tonetworks

Synergise
R2Z with yourexisting
events &campaigns

Highlight bestpractice
Tell your story
or introduce us
to inspiring
businesses

33

Catherine Westoby
SME Net Zero Engagement Lead |Sustainable Behaviours & Public
Engagement for Net Zerocatherine.westoby@beis.gov.uk

Thank youfor listening

Alasdair Silverman
Senior Policy Lead | COP26 &International Climate
Stakeholder Engagement
Alasdair.Silverman@beis.gov.uk |34

Supply Chain Carbon Footprinting
Myles Howard
Environmental Consultant
myles.howard@carbonfootprint.com© Carbon Footprint Ltd 2021

Carbon Footprint Ltd
www.carbonfootprint.com

The Scopes(GHG Protocol)© Carbon Footprint Ltd 2021

Carbon Footprint Ltd
www.carbonfootprint.com

Why measure and manage yoursupply chain footprint••••

Disclosure of Scope 3 Supply Chain emissions is becoming more
popular by forward thinking Corporate businesses in their Annual
Reports.
The Carbon Disclosure Project and Science Based Target Initiative areactively promoting the need for Scope 3 carbon footprint reporting.
Assessment enables an organisation to identify and respond to carbon‘hot spots’ in their supply chain.
There is potential to save cost and improve sustainability in the supplychain.

© Carbon Footprint Ltd 2021

Carbon Footprint Ltd
www.carbonfootprint.com

Data Availability
Primary- Exact usage data from operations (e.g. Fuels,AVAILABILITY

Mileage, Materials).

Secondary- Data from global average emissions factors
based on known processes.

Tertiary- Cost Based Analysis to identify key data sources toACCURACY

help identify where to target the above data. Need the above
data to have measurable reductions.

© Carbon Footprint Ltd 2021

Carbon Footprint Ltdwww.carbonfootprint.com

Spend based carbon assessment•••

Using cost based factors to estimate supply chain GHG emissions based on financial spend.
Identify “Hot Spots”, typically the top 3 sources to focus on.
Report on findings, identifying suppliers contributing to your Organization's footprint.

Emissions factors
based on the £M spent
on Cost or SIC codes
can be used toestimate theemissions.

Some downstream emissions sources may need modeling if
not directly paid fore.g. Distribution, Product Use and Waste.
© Carbon Footprint Ltd 2021

Carbon Footprint Ltdwww.carbonfootprint.com

Progression

Improving data as you go

Hybrid approachYear 1 – 100% Tertiary
DataYear 2 – Primary or
secondary data for the
top 3 identified sources.

Year 3 – Working with
suppliers to reduce
emissions. Majority
Primary or secondary.

© Carbon Footprint Ltd 2021

Year 5 – A better
understanding of yoursupply chain allowing
more data and more
influence

Carbon Footprint Ltd
www.carbonfootprint.com

Market Pressures and additional
benefits•••••

Reduce overall emissions through identifying hotspots and addressing large
emissions sources.
Can help with tenders and becoming part of companies supply chains as well as
remaining in supply chains.
Having a good supply chain understanding can allow businesses to go above andbeyond the minimum reporting requirements and show their Environmentalunderstanding.
Provides many opportunities to show green credentials, differentiate your brand andmany additional transparent marketing opportunities.
Target setting…

© Carbon Footprint Ltd 2021

Carbon Footprint Ltd
www.carbonfootprint.com

Target Setting
SBTi – require a screening of Scope 3 emission with the minimum of a cost basedapproach with targets typically for the 3 key sources of emissions. Certain SBTi targets
require actions for the companies supply chain.

Reduction targets on a per scope basis examples
Depends on data availability and the scope 3 emission source…
••
•
•
•

Promoting Carbon Assessment
Working with suppliers to increase efficiency
Greener suppliers
Local supply
Reuse/reduce (hierarchy)© Carbon Footprint Ltd 2021

Carbon Footprint Ltd
www.carbonfootprint.com

RecapThis Executive Overview provides some ideas on how you may wish toaddress Supply Chain Carbon Footprinting.

The aim of this talk was to:•••

Identify your next step and a potential strategy for achieving a supply
chain footprint
Identify the benefits of monitoring your supply chain
Provide details on how extensive and how far a supply chain can stretch© Carbon Footprint Ltd 2021

Carbon Footprint Ltd
www.carbonfootprint.com

Information & FurtherResources•

Carbon Footprint Website https://www.carbonfootprint.com/supplychainfootprint.html•GHG Protocol https://ghgprotocol.org/scope-3-technical-calculation-guidance•Gov.UK https://www.gov.uk/government/statistics/uks-carbon-footprint•

ONS.gov.uk https://www.ons.gov.uk/economy/environmentalaccounts•

WIOD Socio Economic Accounts 2016 http://www.wiod.org/database/seas16© Carbon Footprint Ltd 2021

Carbon Footprint Ltd
www.carbonfootprint.com

Carbon Footprint

https://www.carbonfootprint.com/supplychainfootprint.html
Myles Howard
Environmental Consultant
myles.howard@carbonfootprint.com
www.carbonfootprint.com© Carbon Footprint Ltd 2021

Carbon Footprint Ltd
www.carbonfootprint.com