August 09, 2022 - 821 views|
Here’s how to move beyond net zero promises, to a scalable, verifiable and data-driven approach to reporting on products’ environmental impact.
When it comes to environmental sustainability, businesses run a real danger of engaging in more talk than action. In research conducted by Economist Impact and supported by Cognizant, in fact, the vast majority (about 90%) of organizations cited sustainability as a key aspect of being a future-ready business. However, far fewer (one-third or less) said they were taking a data-driven approach to such tasks as monitoring water use, impact on biodiversity and carbon footprint across the value chain.
A meaningful action that businesses can—and soon will have to—take is providing comparable and independently verified information on the environmental impacts of their products, components and materials. This information is increasingly required not only by regulators but also by customers, markets and internal departments, like R&D and procurement.
To do that, though, they will need to invest in a more automated approach to gathering, managing and reporting on data to enable product environmental footprint assessments across the product portfolio.
So far, environmental impact data reporting has been unregulated, which has often led to poor assessments and unsubstantiated claims. Soon, however, companies can expect a wave of regulations across the globe to reduce green claims and improve product sustainability information.
For example, the European Commission’s recent proposal on an Ecodesign for Sustainable Products Regulations suggests that any environmental claims will have to be based on the Product Environmental Footprint (PEF) method.
The PEF method builds on Life Cycle Assessment (LCA) and its requirements exceed existing ISO standards. The method includes primary data from a company’s own operations and processes, strict data governance to ensure quality, and independent verification with possible on-site visits.
Having a robust and standardized reporting method like PEF in place represents a great opportunity for businesses—as well as a burden. Businesses will benefit from the increased transparency that allows them to compete based on their environmental performance. At the same time, they will need to deal with the overhead and cost involved in meeting the strict requirements of the PEF method.
Today, most companies face several challenges when assessing the environmental impact of their products and services:
To comply with PEF requirements and scale up PEF-based Life Cycle Assessment (LCA) across the entire product portfolio, companies need to invest in acquiring verifiable data from their own operations, processes and supply chain, using digital and Internet of Things (IoT) solutions. They also need automated data management and reporting to enable PEF assessments at scale and across the product portfolio.
Such automation can largely reduce reporting overhead, while also opening the door to transparency and auditability in providing verified and high-quality environmental impact data at scale.
Here are three steps companies can take to enable product environmental footprints at scale.
This is not an exhaustive list but is a starting point to automate PEF-based Life Cycle Assessment (LCA) and meet increasingly stricter standards on the data quality and verifiability of product sustainability information.
By investing in more automation to analyze the environmental footprint of products, companies can open the door to more sustainable innovation and differentiated competition. They can set themselves ahead of the pack based on their environmental performance and save untold hours spent on data collection, modeling and verification.
Best of all, by moving beyond sustainability lip service, they’ll stand out from the crowd when it comes to taking meaningful environmental action.