Why supply chains and lobbying have to be part of carbon accounting
Teressa Betty is the Kaiwhakahaere matua (chief executive) of Toitu Envirocare. She explains why Toitu has decided to ask customers of its certification programme to commit to tackling their supply chains, and their lobbying. OPINION: Work from Stuff s Forever Project published last month investigated the carbon disclosures of some of New Zealands biggest companies. We commend holding companies accountable for the emissions embedded in their supply chains and core business, as well as for their climate-related lobbying activity. At Toitu Envirocare we believe climate action should be much more than a compliance or accounting exercise. Its about understanding the full scope of responsibility for our individual and collective impact on the climate and how the climate impacts us, working to transform our businesses to balance those aspects. READ MORE: * Hidden heating: We assessed companies on their climate actions. It almost broke us * Silver Fern Farms to join a handful of Kiwi companies offering carbon-zero products * Certified carbon-zero chicken: Waikato company first in New Zealand to get the tick * New tool to help small businesses measure their carbon footprint * How to cut your carbon, according to some of the country's 'biggest losers' Reporting on emissions is only the start turning off carbon emissions at their source is the challenge at the heart of climate action. This requires each of us to look beyond the footprint of our operations and start to map our wider climate shadow, including our suppliers, customers, communities, and sectors. Through a range of certification programmes, Toitu Envirocare expects its members to go beyond simply disclosing their emissions. Our member companies must show ongoing reductions to maintain certification, even if they also offset, and demonstrate ambitions to create a positive impact on te taiao (the environment) and communities. To reflect the urgency of the climate crisis, Toitu has decided to draw a line in the sand and will ask its 600-plus programme members to renew their mahi for te taiao and the economy. Under future certification requirements, which well announce soon, Toitu will require members to set a 1.5C science-aligned target, include emissions across their value chains, and commit to not participating in misaligned advocacy. We may be raising the bar, but since I joined Toitu in January this year, Im proud to see that so many of our members are already moving to meet that bar. Most companies know that reducing emissions is the right thing to do, but theyre also becoming increasingly aware that its also good for business, with potential cost efficiencies yet to be recognised widely. There is also increasing pressure on companies from consumers, investors, government and regulation. Not simply to know your number but to be able to prove that your business has scrutinised the true scope of accountability. Offshore markets are increasingly scrutinising carbon claims too, and the recently signed EU-Aotearoa New Zealand free trade agreement includes commitments on climate measures. In the year ahead, Toitu forecasts a particular focus on value chain accountability. It is also a key shift in our future certification requirements because thats where many of the climate-related risks and opportunities can be found. A companys emissions profile no longer stops at the factory or farm gate. I use the term value chain deliberately here, as opposed to supply chain. A supply chain is the flow of all products and processes before a good or service reaches an organisation. Value chain, on the other hand, is the totality of upstream and downstream activities associated with the operations of a business, including its suppliers, the use of sold products by consumers, and the end-of-life treatment of sold products after consumer use. These emissions are just as much a part of a businesss carbon responsibility as those within operations. Toitu Envirocare recognises that measuring emissions across value chains is a challenge, but we are committed to helping companies define and refine how they do this. Even an estimate can provide useful clarity on where to focus attention, often highlighting how to source better data. It is critical to look beyond core operations and make positive changes wherever possible, collaborating where it makes sense to do so, and recognising the power of quality data. Having more (quality) information opens doors to better manage climate impacts, including the discovery of cost savings, efficiencies and opportunities, and helping your business to innovate and be resilient. Weve seen it proven over and over again in our 21 years of carbon accounting. Businesses dont have to tackle everything immediately identifying and working on the biggest source of emissions in your supply chain is the important first step. Even small businesses can influence big suppliers. Were all in this together. We cant stop climate change, but we can limit its devastating impacts on communities. If we collaborate and work together transparently and honestly, sharing challenges, case studies and successes, collectively we will be able to achieve so much more. Ko nga pae tawhiti, whaia kia tata. Ko nga pae tata, whakamaua kia tina The potential for tomorrow depends on what we do today.