A yes to decarbonisation – but how does it work?  

As the pressure on companies to reduce and report their greenhouse gas emissions rises, new partnerships are being established between manufacturing and climate tech companies in order to achieve this.
In this Q& A with Sustainable Plastics, Tyler Matusevich, director of Sustainability at sustainable printing and packaging firm Brook + Whittle and Mauro Cozzi, CEO and co-founder of carbon management firm Emitwise talk about why decarbonisation and aligning with the science-based targets initiative is a necessity for the packaging industry, the importance of carbon accounting and why this should be adopted by companies in the sector.

Tyler, can you talk a little bit about your company's sustainability journey: when, why and how did it start?

For more than twenty years, Brook + Whittle has been a leading provider of sustainable packaging solutions in North America. For many of those years, our efforts were focused on sustainable product development - and we're proud of the portfolio we've built. Our range of solutions has helped over 110 brands improve package recyclability and reduce the global plastic problem.

Ultimately, our goal is for 100% of our customers to be using our most sustainable products. We know that can't happen overnight, so we try to make it easy for our customers to make the switch. We provide a clear rationale for each recommendation, and have even developed a simple rating system for our sustainable products: good, better, and best.

As part of our vision for a more sustainable future, we participate in industry associations like CELAB North America, The Association of Plastic Recyclers (APR), and The Sustainable Packaging Coalition (SPC). Partnerships and transparency are a vital part of our business in contributing to a sustainable world.

Until now, our sustainability journey has been focused on improving the packaging industry. It's time we concentrated on doing more to reduce our ecological impact. We want to be the most sustainable label printing company in the world, and it's why we've set ambitious targets to drive our company and employees forward.

Brook + Whittle has set ambitious targets to reduce its overall footprint, which includes reducing its carbon emissions in line with the Paris Agreement. 'Decarbonisation' is a word that seems to suddenly be everywhere. Why is this so important and how does it affect the packaging industry?

Tyler: In order to limit global warming in line with the Paris Agreement, it's important that all industries work to reduce sources of carbon dioxide and other greenhouse gases across their operations and supply chain. All industries can 'decarbonise' by finding efficiencies in production processes and reducing overproduction, becoming zero waste-to-landfill and enabling closed-loop systems, and by looking to renewable sources of energy and carbon offsets. They can choose to partner with suppliers who also prioritise reduced emissions, and ensure that transportation and distribution of their goods is as efficient as possible.

When it comes to decarbonising the packaging industry, I think we can make the greatest impact by addressing end-of-life disposal of packaging. We need to contain our growing landfills, and a circular economy for packaging is more important than ever. As partners in the packaging industry, we need to treat plastic like the important resource it is, and ensure that all packaging is designed for recyclability. That means using innovative solutions that enable recyclers to properly sort and effectively recycle packaging, so it can be turned back into a quality raw material for new packaging. Therefore, a circular approach decarbonises our material flow, increasing the quantity and quality of post-consumer recycled content available and reducing our reliance on virgin fossil-based materials to create new packaging. For packaging that does not yet have reliable recycling systems, incorporating recycled content still helps to reduce environmental impact, as do renewable alternatives like certified paper and bio-based plastics.

However, these sustainable swaps must not impact packaging functionality, of which protecting and preserving are of the utmost importance. If packaging lacks this functionality, we risk loss of the product. This is something we want to avoid, especially in the case of food, where one-third of food produced for human consumption is already lost or wasted globally. Food waste is a major contributor to greenhouse gas emissions. It goes without saying that the packaging industry has a profound effect on climate change and we must rapidly decarbonise.

How did the collaboration between Emitwise and Brook + Whittle come about?

Tyler: We are in the process of implementing the Sustainable Green Printing Partnership (SGP) accreditation for sustainable printing practices and manufacturing operations. As part of this process, we are required to set goals and track our progress towards reducing our emissions, energy, water, and waste. This is a huge undertaking and we realised we needed a partner with a proven track record in this space. After connecting with Emitwise, we knew they were the right team for the job. Their platform will speed up the burdensome aspects of carbon accounting across our Scope 1, 2 and 3 emissions, while significantly increasing the accuracy of the carbon data we need to make business decisions. Better yet, they'll put us on a path to transparency for future regulation, reporting and customer demand.

What is the Greenhouse Gas protocol? Can you explain what is meant by Scope 1, Scope 2 and Scope 3? Which represents the biggest part of the total carbon footprint of an organisation?

Mauro: Since its debut over 20 years ago, the Greenhouse Gas (GHG) Protocol has become the world's most widely used emission framework, utilised by 9 out of 10 Fortune 500 companies reporting to the CDP. Its development filled the need for a standardised carbon measurement and management approach to make decarbonisation possible.

The GHG Protocol Corporate Standard introduced the concept of Scopes of emissions. These boil down to the level of direct control a company has in abating them. However, the expectation is all three scopes fall under a company's reduction obligation.

Scope 1 represents the emissions directly made, controlled, and owned by a company, including owned offices, facility centres, and vehicles.

Scope 2 emissions result indirectly from company actions, such as the emissions produced by electricity and heating to power the Scope 1 facilities. While not owned by the company, they can control where that energy is sourced from, for example, coal or renewable sources.

Scope 3 refers to emissions produced within the company's value chain. While not directly within its control, the company remains responsible for its production—for example, emissions from bought products or generated when customers use their products. Scope 3 emissions can be significantly influenced by business-level decisions, as can their reduction.

Scope 3 is not yet a mandatory measurement within the GHG Protocol, although it is highly encouraged, particularly for industrial businesses, where vast supply chains account for over 70% of a company's emissions. However, for many manufacturing companies, like those Emitwise works with regularly, that figure can go over 90% of emissions within Scope 3.

What is the Science-Based Targets initiative and how can it help companies achieve their carbon reduction goals? It can be hard to understand when what applies to whom - how do all these standards and programmes hang together?

Mauro: If I may answer the latter first.

All the acronyms, frameworks, and reporting mechanisms can be very confusing. Plus, they're ever-changing as the space is moving so quickly. Twenty years ago, corporate carbon reduction was in its infancy, whereas today, we see legislative changes or companies publishing net-zero targets nearly every week.

The other factor is that the business world is learning a new language. Carbon management requires a specific skill set in a workforce that hasn't yet caught up with demand, so many businesses are trying to self-learn and respond in the interim.

To simplify matters, we split it into three:

First, the methodology frameworks. This is where the GHG Protocol sits. These measurement frameworks underpin all the reporting and accreditation structures. It's the science behind what complete carbon accounting looks like.

Second are the reporting methods. The number of regulatory requirements for carbon reporting is growing. In fact, the UN found that more than 130 countries have now set or are considering developing a 2050 net-zero target. Therefore, for businesses operating within these geographies, there are reporting expectations to demonstrate how the company will help them achieve their goals. Some are geography-specific such as the SECR (UK), SASB (US), TCFD (international), and the CSRD (Europe). Other reporting requirements are prescribed to companies by investors and stakeholders who want to protect their investment's bottom line and brand reputation. That's why many organisations respond to the CDP. Each of these reports requires different information but relies on standardised methodologies such as the GHG Protocol to ensure that emissions have been accounted for appropriately.

Third are the accreditation bodies. This is where bodies like the Science Based Target Initiative (SBTi) and Ecovadis sit, assuring everything from emission calculations to decarbonisation targets.

So, what is the SBTi, exactly? The SBTi was set up in unison with some familiar names; The CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), following the 2015 Paris agreement.

In their own words, "The SBTi mobilises the private sector to take the lead on urgent climate action". Targets set through the initiative provide a public barometer on a company's climate action.

Science-based targets (SBTs) are based on a global carbon budget allocation that keeps temperature rise below 2ºC. But as of July 2021, the expectation is for companies to go one step further and keep temperature rise below 1.5ºC, which coincided with the introduction of their Net-Zero target pathway. Typically taking between six months and two years to set and verify, SBTs are rigorously scrutinised by the SBTi. The data used to develop and report on them is examined in detail and predominantly reflects the GHG Protocol methodology. Companies whose value chain produces at least 40% of their emissions must build Scope 3 into any reduction target.

By setting an SBT, companies can develop a feasible and plausible decarbonisation roadmap, minimising accusations of greenwashing and unnecessary expenditure into unsuitable strategies.

Mauro, Emitwise works with companies to guide them through the process to help them reach these carbon reduction goals. What is carbon accounting? How does it work?

For Emitwise, carbon accounting is the second step on the journey to complete carbon management. The pathway starts with establishing a baseline, a company's carbon footprint. This emissions baseline typically looks at Scopes 1 and 2 in detail; however, it doesn't focus on the accuracy of Scope 3.

Carbon accounting is where companies look to gain a greater depth of understanding about where emissions sit across the value chain and work to target those hotspots with increased accuracy.

For us, carbon management is the end goal when companies aim to reduce their emissions scientifically to net-zero. They actively engage with tier 1 and 2 suppliers to align their value chain on the same mission. It's why we are excited to work with companies like Brook + Whittle, who share these ambitions and want to act on carbon, not just measure it.

Simply put, carbon accounting is the calculation and ongoing monitoring of a company's emissions, basically bookkeeping for GHG production. And just like financial accounting, carbon accounting aligns with calculation methodologies that standardise the process. We use the GHG Protocol for all the reasons previously discussed.

Emissions data is pulled from across the operation and supply chain of a business. It can be primary data which is relatively easy to source for Scopes 1 and 2, where the information is owned. Or secondary data based on average emission factors where there are information gaps typically found with complex Scope 3's. The result is an internationally recognised and comparable unit of measure known as 'carbon dioxide equivalent' (CO2e).

However, the Emitwise platform goes further than an annual CO2e report. We surface a company's carbon data in a way that helps teams quickly visualise and easily understand where their carbon hotspots are across their organisation whenever they need to. By doing so, companies can go beyond measuring carbon.

From here, teams can analyse risks and opportunities, engage with reporting frameworks and align their supply chain through the platform. Using decision-ready carbon data to model, track and act on profitable reduction initiatives.

Is the manufacturing industry aware of developments regarding carbon reduction and how to achieve this? Do you feel that there is a true understanding of why this is important? How can companies turn it into a good business strategy rather than just another cost?

Mauro: We work predominantly with UK, European, and North American manufacturers and have seen a growing understanding that carbon management is vital for future-proofing a business and its value chain. Manufacturers already account for 2/5ths of the Science Based Targets committed and set globally. 90% of which have been added since the start of the pandemic in 2020.

One reason for this is a growing number of carbon regulations. However, there's sometimes a sense of 'I know I need to do this within the next few years, but why do I need to start the process today?'

We often share a few reasons that other customers have cited for starting today. One being that carbon is fundamentally a cost. As with any cost, the sooner you act on it, the sooner you can reduce its financial burden. In our experience, and for those companies considered leaders in sustainability, it's profitable to reduce carbon when the programme is effectively run.

Secondly, there is a competitive advantage of not being late to the party, including new revenue streams and brand reputation. Customer expectations are the most cited reason our customers give us for starting to manage carbon. Just as we encourage our customers to engage their Scope 3, we see downstream customers, significant household names, and corporates doing the same with theirs. So for those acting early, there is an increased opportunity for retaining and gaining new customers.

Thirdly, a growing number of investors care about your approach to decarbonisation. For the last three years leading investment houses such as BlackRock have called on their portfolio to manage carbon seriously. Many companies we work with already have to disclose their carbon footprint through the CDP or directly with investors. Managing carbon builds a reputation as a safe, profitable investment in a volatile climate-affected future.

Of course, is there more to do? 100% yes. Manufacturing accounts for nearly ¼ of America's direct emissions, and the stats are similar globally. The ability of the sector to respond and reduce its footprint could be a make or break for climate change, but it could also be a deciding factor in which companies will be here today and tomorrow.

In Europe, a new corporate sustainability reporting directive is in the making. How will this affect companies around the world?

Mauro: The introduction of the Corporate Sustainability Reporting Directive (CSRD) within the EU will see all large public companies publish regular reports on their environmental and social impact from 1st January 2024. As an extension of the  Non-Financial Reporting Directive already in action across the EU, the CSRD will have a newly agreed set of reporting standards, currently still in production, but that build on the existing Sustainable Financial Disclosure Regulation and EU Taxonomy.

At the heart of the new Directive is the drive to decide what is legitimately a decarbonisation initiative vsersus one that mildly mitigates or offsets. Four times the number of companies will be affected compared to its predecessor. In terms of broader effect, it could inspire a few potential game changes outside the EU too:

• The Format: Having to share the calculations and supporting data in a computer-readable format will be new for some and is indicative of how other reporting practices will go in the future, meaning companies need to invest in software that can help them do this.
• Sharing more: The disclosure heavily expands the amount of forward-thinking a company must disclose, i.e., strategies and abatement projects, with the modelling of their proposed impact, alongside targets ad KPIs to achieve them.
• Business Impact: The sheer amount of time and resources needed to report this way will significantly impact many companies.
• Data legitimacy: The requirement of assured carbon data will also bring new challenges and legitimacy to the data. Companies will be required to ensure the analysis is appropriate and accurate enough to verify, levelling the playing field and removing the potential for greenwashing.