Tuesday, July 20, 2010
Factoring Sustainability
During a recent call with the Director of Sustainability for a large global Telecom manufacturer, we mused the growing body of metrics employed by them to measure progress against corporate sustainability goals. As discussed and publicly documented in the company’s 2009 CSR, their sustainability efforts have focused in 3 areas:
- Internal operations (supply chain, etc.)
- Product/technologies
- Corporate citizenship
Relative to the first, they have admittedly produced no large-scale monetization of carbon credits to date, but religiously conduct audits on $’s and kilowatts saved, and how their products are moved modally for example. (eg. air-to-alternative and carbon/ton-miles)
By way of introduction to these “modal" measurements, Carbonfund.org’s shipping calculator utilizes three user generated inputs to determine a unit called a ‘ton-mile’ (e.g. a ton of freight traveling 1 mile, or a half ton of freight traveling two miles, etc.):
- Total number of shipments
- Average Weight of Shipment (lbs)
- Average Shipping Distance (mi)
From this information we determine the shipment(s) ‘ton-miles’. So if you have 50 shipments (A) of 100 lbs (B) each traveling an average distance of 500 miles(C), you multiply A*B*C, 50*100*500 to get 2,500,000 lbs-miles – to get to ton-miles, divide by 2204 to get 1,134.3 ton-miles. Once you have that figure, multiply it by the appropriate emissions factor depending on how you are shipping the package. So 1134.3 ton-miles being shipped by truck (0.3725 lbs CO2 per ton-mile) gives you a total emissions of 422.52 lbs CO2. Shipping Emissions Factors:*
- Air cargo - 1.7739 lbs CO2 per Ton-Mile
- Truck - 0.3725 lbs CO2 per Ton-Mile
- Train - 0.2306 lbs CO2 per Ton-Mile
- Sea freight - 0.0887 lbs CO2 per Ton-Mile
It always comes to down to math, but solving the equation requires unprecedented visibility into inventory data, such as product weights, and material flows from location to location. And ideally, you want choices. Such as the choice to ship a replacement/spare part from Amsterdam to Barcelona, instead of Dallas to Barcelona. Trade Wings offers this level of visibility, and we’re making a difference for our Telecom customers, including Ericsson and others who have been recognized year after year for their outstanding efforts to address issues of sustainability through asset intelligence.
As a result of his company's diligence, the Director of Sustainability of the aforementioned large, global Telecom OEM reported to us that they have reduced their carbon footprint by 13% (in carbon/ton-miles) year/year. He also left us with this observation: As customers become more sophisticated in their environmental commitment, business imperatives will drive innovation and 'sustainability' will become synonymous with 'strategy'...and those who don't get it will be left behind.
*The calculator provides an emissions metric for shipping by Zeppelin. I have omitted this from my list, but if prefer to know, give me a call on +1-603-766-7000.
