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.
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."