Carbon Trust

from Scott Bork

Case Example: Carbon Trust

One after another, multination firms catch on to the profit proposition associated with driving sustainability initiatives within their overall “Going Green” strategies.  It is quite obvious that the shift can remedy a company’s poor public relations profile, but innovation is bringing real cost savings and in many cases bringing new products and services to market.  Large industrial and retail firms are hiring independent and reliable organizations to measure supply chains for carbon dioxide levels.  The value added is the branding of organizations commitment to reduce its carbon footprint.   In order for the carbon conscious movement to generate its greatest potential, independent organizations are relied upon to innovate in the sustainable services sector.

In the UK, the Carbon Trust Company is doing just that, “advising businesses, governments and the public sector on opportunities in the sustainable low carbon world.”[1]  They provide training, benchmarking, and verification services for carbon conscious firms.  Notable clients include GE, Coca Cola, Dyson, and Heinz.  Carbon Trust has a product labeling service that looks at emissions up and down the supply chain and specifies the carbon impact of a product or service.  Companies leverage the metric for period over period analysis.  In June 2008 the Carbon Trust Standard was launched to recognize organizations for real carbon reduction.[2]  Coupled with product labeling, the Carbon Trust Standard methodology is a first of its kind offering for universal standardized benchmarking.

While the standard is complementary to other initiatives, it separates itself by only rewarding organizations that achieve emissions reductions through their own actions.  In essence the standard is a stamp of approval held for a two year period, after which a reapplication for the award is required.  The Carbon Trust Logo lets firms communicate carbon credentials to regulators, distributors, customers and citizens for products delivered to market.  Because a company has to commit to lowering its footprint in order to use the label, it demonstrates their sustainable commitment.  As larger retailers demand products branded with the logo, suppliers are adapting to the request for fear of being blacklisted.

In that same sense, the credential helps firms leverage their comparable advantage in sustainable operations.  Firms undoubtedly reduce their reputational risk, but what’s more, they are building robust carbon management systems and promoting energy and carbon management cultures ahead of impending regulations.  In some cases the Carbon Trust Standard elevates employee pride, increasingly the likelihood that inefficiencies are identified by personal and targeted for carbon improvement.

Most of the services provided by Carbon Trust are deployed within UK boundaries, though recent reports do show strong and compelling evidence that the standard is catching fire.  Over 50% of UK retailers are now certified to the Carbon Trust Standard.  Bob Gordon from the British Retail Consortium, “This result demonstrates that the retail sector is taking the lead on reducing its carbon emissions.”[3] Selfridges, Harrods, and the John Lewis Partnerships are top end luxury retailers branding the standard.  Since managing their carbon emissions, the three retailers realized a cumulative cost savings of nearly £1 million[4].

 

References:

[1] http://www.carbontrust.com/home

2 http://www.carbontruststandard.com/pages/About-us

3 http://www.carbontruststandard.com/EntryView?id=a0QD000000555oDMAQ

4 http://www.carbontruststandard.com/EntryView?id=a0QD000000555oDMAQ

 

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One thought on “Carbon Trust

  1. tlhill2012 November 23, 2012 at 2:47 PM Reply

    Scott – thanks for this useful example. It’s an good example of how increased legitimacy (a credential) can drive behavior and structural change. But why is legitimacy needed? What’s driving the demand for the credential? Is the driver political (regulations)? Social (social pressures)? Competitive (keeping up with competitors)? In some ways, it doesn’t matter, so long as the companies make real change to chase the credential. But it matters in terms of understanding how such change happens and so how one can facilitate change. If it’s political, then lobbying is called for; if it’s social, then organizing is key; if it’s competitive, then the simple pursuit of profit should lead to change.

    At a higher level of abstraction, the rise of the Carbon Trust is a fascinating case study of the evolution and importance of standards/credentials. There is a growing literature on the setting of standards – sometimes as a clever marketing ploy (Good Housekeeping, Carbon Trust?), sometimes as large political process (national organic standards), and sometimes as a democratic meeting of competitors to settle the rules of the game (cell phone protocols, etc).

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