September 02, 2009

How much carbon is in that screwdriver?

Companies and consumers may soon care which product has the smallest carbon footprint -- so start your measuring

Imagine walking in to your local retail store in search of a new screwdriver. You narrow your choice down to two virtually identical models, both priced at $1.39. One, however, has a label proclaiming the tool's carbon footprint is 50 pounds. The other has a sticker declaring a carbon footprint of 25 pounds. If you're the owner of that retail store, which tool do you think your customers are most likely to buy? Or peering a bit further down the supply chain, if you're the maker of screwdrivers, whose tool do you think retailers are more likely to buy: yours or the eco-friendlier option from your competitor?

We already know that organizations worldwide have started measuring their carbon footprint -- more specifically, their CO2-e (carbon dioxide equivalent). Further, they've started assessing and reporting their eco-oriented CSR (corporate social responsibility) efforts, both to comply with regulations and to satisfy the demands of business partners or customers -- such as IT companies, including HP, IBM, Dell, and Xerox; retailers such as Wal-Mart; government bodies; hospitals; and so on.

[ Learn how green demands have trickled down the supply chain. | Pressure is rising for IT to help organizations battle global warming. ]

Now some organizations are taking it a step further, going so far as to measure the carbon footprint -- the amount of carbon dioxide that goes into manufacturing a good -- of individual products. PepsiCo, for example, calculated and published the carbon footprint of a half gallon of Tropicana orange juice earlier this year. The trend is indicative of a move toward a "carbon-constrained economy," says Larry Goldenhersh, CEO of Enviance, a provider of SaaS solutions for managing environmental and CSR data and requirements.

Through "global supply chain environmentalism," companies are essentially reducing the associated carbon footprint -- and, thus, the detrimental environmental impact -- of their products. The company that manages to deliver the product with the smallest carbon footprint will have a huge advantage over its competitors, Goldenhersh says. An otherwise identical $1.39 screwdriver suddenly has more value to increasingly eco-conscious customers if its manufacture results in 20 fewer pounds of carbon. Goldenhersh calls this "decommoditizing the commoditized market."

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rhoefelmeyer 3-Sep-09 8:34am
If the price is the same, and the carbon footprints differ, one is still going to buy the better product, and carbon footprint be damned. I personally have bought tools that were more expensive than their Chinese counterparts, because they would last longer and work better. It's the same with carbon footprints - if the product is dreck, the carbon footprint doesn't matter. The "all things being equal" arguments are specious, because all things are not equal in the real world. Being eco-conscious doesn't mean one checks ones' brain at the door.
bz8x8c 3-Sep-09 9:59am
Hmmm, assuming we could actually regulate the consumer market to the point of requiring that every product have a standardized measure of CO2 footprint, we would be building in a lot of regulatory cost in an otherwise already stressed consumer marketplace. I don't see that happening anytime soon. On the other hand, if it's not regulated in any standardized manner, I see corporations trying to gain marketshare by deliberately measuring CO2 footprints in a way that puts them ahead of the competition without any real regard for whether it's accurate or not. Lastly, if we assume that the carbon footprint value is accurate, the lower carbon-footprint model would likely be costlier due to the efforts required to reduce the carbon footprint for that product. So, if you really want the hammer with the lower carbon footprint, you would probably be buying the same higher-priced hammer that you would choose if you wanted the higher-quality hammer. In reality, nothing comes for free, so the additional cost to accurately reduce, measure, and report carbon footprints for products needs to be considered, as well as the corporate tendency to focus more on product sales & profit over any environmental concerns.

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