Green Commerce Blog
Carbon Labeling: Impacting the Entire Supply Chain
Enhesa’s August 2011 webinar, attended by over 200 EHS* professionals, explored the potential effect of carbon labeling throughout the entire supply chain and discussed the implications of growing government action on carbon labeling.
The webinar examined the case study of France, where the government is contemplating a mandatory environmental labeling scheme and is currently conducting a pilot program with 160 companies.
While voluntary carbon labeling schemes have long been supported by governments in a number of countries, France is the first country to seriously contemplate a mandatory carbon labeling scheme for all consumer goods.
Last year the French Parliament agreed to consider adopting a mandatory scheme after a trial phase of one year starting in July 2011. Over 160 companies are currently providing French consumers environmental information on the goods they purchase as part of this trial. The pilot phase covers a wide range of products (see article in GC Bulletin 7).
To provide a framework for the future scheme, France is currently developing product-by-product methodologies for the assessment of the environmental impacts of products.
Moreover, industry concerns are focused on the reputational and compliance risks of carbon labeling. Around 95% of the participants at Enhesa’s webinar agreed that it was important for their company to be perceived as “green”. Enhesa’s research shows that 60% of the respondents expressed major concerns about complying with mandatory labeling schemes.
However, businesses are already beginning to feel the impacts of carbon labeling, as requirements for carbon footprinting ripple through the supply chain. Carbon labeling requires a full analysis of the production process to identify carbon that is emitted throughout the life cycle of a product. Life cycle analysis is a challenge for any business as it requires communication with companies in the supply chain including a detailed understanding of the inputs involved in the creation of a product. Although this difficulty can be balanced out by the significant financial benefits for companies that achieve it.
Whether a company is a producer of consumer products or a supplier of materials and components, it is likely to be answering more and more requests for information about the environmental impact of their products.
Companies that are unprepared for these requests may face negative market results or damage to their reputation as consumers shift towards suppliers that can demonstrate strong environmental performance.
*EHS: Environmental, Health and Safety
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