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Triad sustainability consuling

Sustainability consulting for the achievement of climate targets

From CO2 transparency to supply chain act – valantic's portfolio of services

At valantic, we have focused on the topic of sustainability for many years. During this time, we have noticed that sustainability is often reduced to environmental issues. At valantic, however, we regard sustainability as a holistic approach, which, in addition to the area of ecology, also strongly influences social and economic factors. This understanding has a significant impact on our approach to consulting and joint projects with our customers.

Graphic Anchoring sustainability in the company

Content

Table of contents

Approach in projects in the field of sustainability

Our basic approach is divided into 4 main steps that we complete together with our customers:

  1. Transparency

    We provide clarity regarding the company’s current state with respect to sustainability (e.g. creation of product carbon footprint).

  2. Evaluation

    We evaluate the results based on the sustainability triangle – from the social, ecological, and economic perspectives – and develop holistic, meaningful measures that take into account not only ecological benefits, but also economic efficiency.

  3. Decision-making

    We evaluate and prioritize the possible measures in close cooperation with the company. A plan for implementation will then be developed jointly.

  4. Support

    We actively support our customers in the implementation of the measures developed and we assist them in becoming sustainable.
    In our approach, we respond individually to our customers’ needs and we work to find the best way to achieve visions of sustainability.

Sustainability as part of entrepreneurial thinking

Sustainability is no longer just a fad where serious commitment is not worthwhile. Especially in the recent past, the topic has taken hold in almost all social and economic areas.

People often have the impression that the consistent pursuit of sustainability goals only results in costs that create an increased economic burden for the company. However, a stakeholder analysis shows that sustainability is already a “must” for companies today. In addition to pricing of non-sustainable behavior (e.g. CO2tax), pressure from all stakeholders is increasing to establish sustainability as part of corporate activity. Investors and politicians are already placing significant demands on companies. At the same time, the growing needs of customers and employees have to be met so that the companies can remain competitive in the future.

Graphic Sustainability stakeholder requirements

In addition, in our opinion, sustainability is an elementary component of visionary and forward-looking entrepreneurial thinking that can generate positive synergy effects. New approaches such as recycling can thus save raw materials and acquisition costs, and at the same time reduce disposal costs. In addition, product carbon footprints can be used to locate companies’ hot spots of CO2 development and in the supply chain and thus to increase potential for process optimizations.

Thanks to our many years’ experience in the field of logistics management and our holistic view of the supply chain, we help our customers understand sustainability as an opportunity for making comprehensive optimizations.

CO2 transparency and optimization measures

Distinction between product carbon footprint and corporate carbon footprint

The term “footprint” is commonly used to measure CO2 emissions. The aim of this image is to show that any CO2-equivalent (other greenhouse gases such as methane are converted into CO2 equivalents) have an impact on nature and leave an “imprint” there.
This term is also used in connection with companies’ emissions. However, a distinction must be made here between the Product Carbon Footprint (PCF) and the Corporate Carbon Footprint (CCF). Both concepts are based on the fact that the company-relevant greenhouse gas emissions are to be measured. However, they differ significantly in terms of collection, scope, and use.

Graphic Sustainability Determination of greenhouse gas emissions

Product Carbon Footprint

  • The product carbon footprint refers to the balance of greenhouse gas emissions throughout the product’s life cycle
  • The calculation of the PCF is done for a defined product and refers to a functional unit (e.g. 1kg raw mass)

Corporate Carbon Footprint

  • The corporate carbon footprint describes the sum of all CO2 emissions for which the company is directly and indirectly responsible. In this case, the reference variable is the company.
  • For the sake of simplification, emissions are divided into 3 categories. Scope 1 covers the total direct output of the company, scope 2 the purchased energy, and scope 3 contains upstream and downstream indirect emissions

Procedure for reducing CO2

With regard to sustainability, the motto is what can be measured can also be mastered. True to this motto, the initial step after setting the target and reference limits is always to determine the actual state of greenhouse gas emissions. For this purpose, activity data (e.g. the consumed current per period under consideration) has to be determined as far as possible. If no activity data is available (e.g. for the use phase), secondary data that provides comparison values can be used.

Once transparency about greenhouse gas emissions has been established, the results have to be evaluated and visualized. In addition to identifying the largest drivers for the CO2 footprint, the results of the determination can be validated. Once the levers have been identified, measures can be derived that are evaluated in terms of their ecological, economic, and social effects.

On the basis of the evaluation, the measures should now be prioritized and measures with a positive effect on economy and ecology (e.g. Increased resource efficiency) should be implemented first. An implemented success monitoring is crucial for the long-term success of the measures.

Graphic Sustainability Assessment and Measures

Product Carbon Footprint

CO2 reduction through evaluation and optimization of products’ footprint

In addition to pure transparency about the impact of a product on the environment, a PCF control lever can be identified along the entire supply chain and appropriate measures implemented to reduce the effects. If remaining emissions are compensated (e.g. by planting trees), the product can be promoted as a climate-neutral product.
By creating the product carbon footprint and implementing emission-reducing measures, numerous positive effects can be achieved:

Fulfillment of customer needs
Decision criterion and realization of higher prices for end customers and for supplier selection (B2B)
Improvement of the product and company image
Counteract potential future CO2 pricing and other regulations

Corporate Carbon Footprint

Calculate and reduce the CO2 footprint of the entire organization

When recording the corporate carbon footprint, the point of view is different than for the PCF. Instead of a product-related approach, the focus is now on the whole company. Scope 1 and 2 emissions focus on the emissions caused by the company’s own business processes, as well as the energy purchased for them. Scope 3 emissions include all indirect upstream and downstream emissions generated by the company and its products. In line with the procedure for creating the PCF, the company’s climate footprint provides the opportunity to identify control levers and derive suitable measures for reduction. The aim should always be to reduce all avoidable emissions and to compensate for unavoidable emissions. This enables the company to make its contribution to climate protection and to call itself a climate-neutral company.

The benefits of a corporate carbon footprint are, in sum:

Reduction of operational costs (many reduction measures also reduce costs)
Early fulfillment of investor requirements (taxonomy)
Improvement of the corporate image

The social and sustainable supply chain

For some time now, supply chain act has been discussed in German and European politics. This is a law that is intended to encourage companies to take on more responsibility within their supply chains. It is primarily a question of meeting minimum social standards along the entire supply chain. Ecological aspects are also relevant, provided that they have a direct impact on the living conditions of the local population. The aim of the initiators is to make companies liable for violations of current climate and occupational health and safety laws in the future. This law would therefore have a significant impact on the management of German and European companies and would bring with it numerous new challenges.

The sustainable supply chain as the benchmark for future economic management?

This provocative question doesn’t come from thin air. It is not yet clear what consequences the climate change law will have for companies. However, it seems certain that there will be changes for companies in their duty of care along supply chains. The graphic shows the effects for the respective stages of the supply chain in a transparent manner. In this way, a distinction is made within the law between indirect suppliers and contractual partners. They are subject to different due diligence obligations from the OEM’s point of view. It is therefore clear that in the future greater transparency will be required with regard to the supply chain itself and all the companies involved.

Graphic ustainability Supply Chain Act

Challenges for companies

However, there are still some outstanding issues regarding the supply chain act. However, since these issues depend largely on legislation, unfortunately companies have only partial control over them, so they represent uncertainty. However, it makes sense to be aware of these uncertainties in advance in order to be able to derive an individual strategy for managing the risks.

The most pressing and open questions we see are:

  • How can companies implement risk management that exposes social scandals with indirect suppliers?
  • How do companies create transparency right down to the raw material supplier / tier-n?
  • How can companies verify and ensure compliance with environmental and social regulations in the supply chain?
  • How can companies fulfill documentation obligations with efficient, digital processes?
  • How can companies anchor sustainability to their contractors and regularly check it?

For companies, it is crucial to address these issues today and to find solutions proactively. We at valantic have been assisting our customers with the further development of their suppliers for years. The combination of this long-standing experience and our expertise in the field of sustainability provides our customers with the optimal basis for complying with the requirements of the supply chain act in their supply chain. As part of audits, we review and evaluate your suppliers against the established criteria and jointly develop appropriate measures for compliance with the guidelines. In addition, together with the supplier, we establish a proactive risk management system that recognizes potential problems at an early stage.

This way, we create transparency in your supply chain step by step and help you comply with the supply chain act.

Your Contact

Picture of Antje Fließ, Management Consultant valantic Supply Chain Excellence

Antje Fließ

Managing Consultant
valantic Supply Chain Excellence