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Eco-Pricing: Becker Underwood First To Import Environmental Profit & Loss to the US
September 11, 2012
This is the first of a two-part piece from Becker Underwood on the development of their environmental profit & loss methodology. Stay tuned for part two next week.
It was less than a year ago when sportswear brand Puma announced the completion of its groundbreaking Environmental Profit and Loss Account (EP&L) for 2010. Encouraged and inspired by the methodology, we decided to dig deeper and see how we could follow suit. The approach was a perfect fit to our sustainability strategy centered around the NET positive™ concept, which is built on the philosophy that all businesses have positive and negative impacts on the environment and society through their policies, processes and products. How we account for and measure these positive and negative impacts is a key question that the NET positive initiative aims to address. Putting a financial figure on our environmental impact allows us to identify hot spots and set a benchmark to mitigate the environmental footprint of Becker Underwood’s operations.
We looked to Trucost to implement an EP&L assessment akin to the Puma study for Becker Underwood’s global operations and supply chain. The first stage of the comprehensive supply chain sustainability assessment analyzed the carbon and water footprint of our supply chain within the remit of our NET positive framework. It included preliminary modeled data for Greenhouse Gases (GHGs) and water abstraction and utilities data from our facilities in Argentina, Australia, Brazil, Canada, France, South Africa, United Kingdom and the United States.
The first step in the assessment was to calculate preliminary modeled GHG and water footprints for each of our suppliers in order to identify high-impact suppliers for our supplier engagement programme. This was done by combining our purchase ledger information with Trucost’s environmental modeling techniques. Trucost’s model calculates all relevant environmental indicators associated with operations in that business sector for Scopes 1, 2 and 3 of the GHG Protocol to ensure our attention is focused in the right areas.
Once the total GHGs and water footprints were calculated, they were normalized by expenditure to calculate the supply chain’s carbon and water intensity, measured as tonnes of CO2-e and cubic meters respectively, per million dollars of spend.
Trucost also used utility data for the facilities analyzed, including electricity, natural gas, heavy fuel, light fuel and water use. Trucost used conversion factors published by the Environmental Protection Agency (EPA) and the Department of Food and Rural Affairs (DEFRA) to model the results.
A corner stone of our sustainability strategy is transparency. So in our effort to provide evidence of improved performance, we are disclosing the following data. We also hope that by taking this step we are encouraging progress in raising social and environmental standards for all businesses.