Code green – the carbon countdown

With climate change no longer science fiction but scientific fact, companies are learning that tracking carbon emissions could also provide bottom line benefits. Katherine Crichton writes.

CONSUMERS are set to have more to think about than the fat content of a packet of chips as the global debate about carbon labelling heats up.

Major supermarket chains, food and drink manufacturers, Government bodies and NGOs are all weighing in, with a number of pilot programs already initiated in the UK, Europe and the US designed to allow companies to audit their carbon emissions during the production and life of an item and display this information on product labels.

Britain’s Tesco, the world’s third-biggest food retailer, has already announced plans to carbon label more than 20 products from potatoes, orange juice to detergents and light bulbs.

Japan has gone one step further by mandating Government approved carbon footprint labels in an ambitious scheme to persuade companies and consumers to do more to reduce their greenhouse gas emissions.

About 30 companies will display their labelled items at an eco-products fair in Tokyo in December, and the first batches are expected to appear in shops at the beginning of April 2009.

Australian industry groups are also taking notice, with the Australian Food and Grocery Council (AFGC) announcing in February this year that it would investigate the impact of the process on everyday products in Australian supermarkets.

While it is essential local manufacturers and businesses are not left behind, it may be worth waiting to see what happens because as Mark Luft, national sales manager, Dy-Mark Identification Solutions notes, currently there are more questions than answers.

“Although I think there is a genuine desire amongst the population to care for the environment, it is important that people fully understand the implications of introducing a carbon labelling scheme in Australia,” he said.

“Everything that is manufactured produces carbon emissions so it would be possible to label anything from a tube of toothpaste, to an aeroplane,” he explained.

“There needs to be an approved way of testing and measuring carbon emissions for each product to be labelled.”

Literally hundreds of products and services are used to bring an item to market and measuring a product’s carbon footprint from ‘seed to shelf’ is certainly not simple.

Also as Luft points out, there are other aspects of the carbon labelling which lends itself to discrepancies.

“Every product that is manufactured and taken to market has a certain carbon footprint, but if that said product is put into storage for two months etc how would this be taken into account?”

Like with any new technology still in its infancy, carbon labelling will have a high initial dollar value attached to it.

Luft stresses whenever considering a new process or technology, it is important to factor in the variables.

“As both a purchaser, and reseller of equipment, we tend to take a ‘big picture’ view when looking at new processes or technologies.

“Questions that need to be asked by potential adopters include: have they factored in the additional cost for products? Will it be a temptation to purchase products that they would not have originally bought because they are swayed by price, image etc? And what would be the additional carbon impact by having to generate extra data, research and labelling to fulfil the requirements of a carbon labelling scheme?”

“Once there are answers to these questions then I think Australian industry will whole-heartedly embrace any way which can reduce the impact of climate change,” he said.

Emissions at cost price

Another key question in the carbon labelling debate is who will ultimately fit the bill for the added costs incurred as a result of rolling out such a scheme?

Many believe that the consumer will be a key driver in this process, with research indicating many would switch to brands with smaller carbon footprints, but would they be willing to pay more for environmental piece of mind?

Andy Hecke, product manager at insignia, believes despite the good intentions out there, if manufacturers have to bear the financial brunt of producing low carbon goods, there will be a very large reduction of support, particularly from consumer commodity good suppliers where the cost would be prohibitive.

“Ultimately it falls to the larger retailers to look at how they can help the flow on from an environmental point of view either through cost recovery, price increase or an allowance or some kind of program like that to help the people with good intentions to fund them.

Otherwise it will be coming straight out of their profits and operating budgets,” he told Manufacturers’ Monthly.

“The major retailers are in the driving seat, so they need to decide if they will put product A on the shelf – which is environmentally friendly or product B – which is cheaper.

“This is where the conscious decision comes in. Share the burden and the responsibility – i.e. are retailers going to allow a higher purchase price for an environmentally friendly and sustainable product?”

And while many countries are looking at mandating carbon labelling schemes, Hecke believes companies should be encouraged, rather than forced, to produce low carbon emitting products.

“If you create a culture or a self-measured way of doing this then I think it will be highly successful. Whereas anything that gets legislated is done in the face of people still arguing it is wrong.”

The carbon advantage

In the end, the move to a carbon labelling scheme might still be an economic decision rather than environmental one, but according to Phil Biggs, national sales and marketing manager, Matthew’s Intelligent Identification, developed nations like Australia have a responsibility to inform and educate the marketplace in terms of the carbon footprint of the products they are buying.

“There is a sense that we have to do it – we are past the point of asking if it is real or not – and a country like Australia, given our wealth and how advanced we are, needs to lead by example.

“I think if either retailer or manufacturer chose to endorse and promote carbon labelling then the consumers would follow.”

Biggs also told Manufacturers’ Monthly, from an Australian manufacturer’s point of view, the advent of carbon labelling could be an opportunity to get an edge in a fiercely competitive global marketplace.

“If Australian manufacturers can demonstrate that their processes: the manufacture, transport methods etc are more sustainable and they can do this better than an overseas product, it could give them a competitive advantage,” he said.

“Our customers – producers of food dairy beverage products – continually need to find ways to appeal to their marketplace and differentiate themselves from overseas competitors.

“Taking the initiative and putting carbon labels on their products may give them this advantage over imported items,” he said.

Even if a carbon labelling scheme doesn’t get implemented into Australia in the immediate future, there is no denying even discussing the possibility can only have positive outcomes for the environment.

This debate around carbon labelling of retail products has already led to a renewed call for transparency among corporations in communicating their current and projected CO2 emissions, and as the consumer’s level of education and understanding of climate change issues continues to grow, companies will have to actually prove their claims of “being green” are true.

Dy- Mark Identification Solutions – 1300 360 336.