How ‘green’ are your purchases? Complex supply chains make it difficult to know

Click to play video: 'Supply chains under scrutiny due to climate impacts'
Supply chains under scrutiny due to climate impacts
WATCH: Supply chains under scrutiny due to climate impacts – Nov 8, 2021

Making climate-friendly choices has become a part of everyday life for many Canadians.

The decision to “buy local” or drive an electric vehicle are two examples.

But it’s not always easy to know how “green” these choices are. Sometimes, it’s nearly impossible.

“It’s hard to find out what the environmental impact of a product is because there’s so many dimensions to it,” said John Sterman, a professor of system dynamics at the Massachusetts Institute of Technology.

Sterman said the complexity of global supply chains is one of the main reasons why it’s so difficult to understand the environmental impact of a finished product.

Story continues below advertisement
Click to play video: 'What the supply chain crisis might mean for the holidays'
What the supply chain crisis might mean for the holidays

In some cases, a product bought in Canada or the United States may have parts made by dozens of different companies located all over the world. And the raw materials these items are made from are often shipped across international borders multiple times during different stages of the production process.

The rise of online shopping and the proliferation of green-marketing campaigns has made it even more challenging for consumers to differentiate between products that claim to be green and those that actually are.

“How do we know that a particular little green leaf logo on that package that says it’s somehow meeting somebody’s certification actually means anything?” Sterman said.

Click to play video: 'Short Supply: How the supply-chain crunch is affecting consumers'
Short Supply: How the supply-chain crunch is affecting consumers

Supply chain emissions

One of the most important things a company can do to make it easier to understand its environmental “footprint” is to accurately report the amount of greenhouse gas emissions produced throughout the entirety of its “value chain,” Sterman said.

Story continues below advertisement

The “value chain” includes everything that’s needed to make a finished product, such as raw materials, parts and shipping, plus the impact of the product after it’s sold.

Emissions from the value chain are often referred to as “Scope 3” or “indirect” emissions and typically make up about 70 per cent of a company’s overall greenhouse gas emissions, Sterman said.

For automakers, this includes the emissions produced by individual suppliers, such as parts manufacturers, plus the emissions generated during the lifetime of the vehicles they sell.

Click to play video: 'Product shortages, delays persist due to worldwide supply chain issues'
Product shortages, delays persist due to worldwide supply chain issues

Accurately reporting these emissions — either in climate plans or annual reports — makes it easier for consumers and investors to understand how environmentally responsible companies are. Companies that hide this information are often trying to “greenwash” their environmental track record, Sterman said.

Story continues below advertisement

For many consumers, however, deciding what to buy often comes down to packaging. But there are no universally accepted standards that people can trust to tell whether one item is better than another.

Breaking news from Canada and around the world sent to your email, as it happens.

“There are very few, if any, products that list this,” said Kevin Lyons, a professor of supply chain professional practices at Rutgers University.

“That’s one of the research projects I’m working on — the new, next generation of labeling, where you actually can pick up a product and it tells you its carbon footprint.”

Canada’s top companies

Many of Canada’s largest corporations have climate plans. They’re usually found on a company’s website or in its annual reports.

An article published on Oct. 31 by the Centre for Building Sustainable Value at Western University looked at the climate plans of 64 of Canada’s largest corporations. Their analysis found that these plans varied in complexity and the types of commitments made.

Just 33 per cent of plans included targets for reducing Scope 3 emissions. In many cases, these targets were calculated on a “per unit” sold basis, rather than an “absolute” reduction in the company’s emissions. This kind of “intensity-based” target is often considered less ambitious than absolute targets because emissions can increase if a company’s sales go up.

Story continues below advertisement

The analysis also found that just over half of the plans had either received or were in the process of receiving independent, science-based verification.

“This emerging ‘gold standard’ for corporate climate targets establishes reliable best practices for reduction target setting, as well as independently assesses and approves the legitimacy of corporate plans,” the authors wrote.

Click to play video: 'Could decarbonization be Canada’s path to reach climate goals?'
Could decarbonization be Canada’s path to reach climate goals?

Meanwhile, a report by researchers at Queen’s University published in April found that just 27 per cent of “TSX Index” listed companies had greenhouse gas reduction targets.

Of the companies that did have targets, just 15 per cent included “detailed plans,” while 62 per cent had plans with “some level of detail,” and the remaining 23 per cent offered “boilerplate comments or no details at all.”

Story continues below advertisement

“These observations show that concerns around emissions data availability are real,” the researchers wrote.

Zero-emission vehicles

Few items symbolize the transition to a green economy more than the electrical vehicle.

Canada has set a target of eliminating all combustion engine vehicle sales by 2035. Other countries, such as the UK, have set even more ambitious goals.

But determining how “green” these vehicles are is challenging because of the complexity of auto manufacturing.

Steven Young, a professor of environment at the University of Waterloo, says car makers are taking significant steps to make sure the materials they use are sustainable.

This means pushing steel makers, plastic producers and parts manufacturers to reduce their carbon output as much as possible.

“An emission here is just as good as an emission on the other side of the world,” Young said. “If we can mitigate or reduce carbon emissions somewhere else, that’s just as good as reducing the emissions here.”

Click to play video: 'The Big Shift: Is Canada ready for the EV revolution?'
The Big Shift: Is Canada ready for the EV revolution?

Young works with an industry group called Responsible Steel, which aims to make cleaner and more environmentally-friendly steel products.

Story continues below advertisement

He said companies are making these kinds of changes because customers want them.

“Companies like Volkswagen, BMW and Ford have all expressed an interest in evaluating the supply chain emissions that are coming into their cars,” Young said.

A big part of making sure electric vehicles are sustainable is knowing where the raw materials used to build them come from and how they’re extracted, Young said.

This is especially true for minerals like cobalt, produced mostly in the Democratic Republic of Congo, and lithium, which comes from Bolivia, Argentina and Chile.

Both minerals are essential to creating the batteries used in electric vehicles.

An article published in Science in May estimated that the number of electric vehicles on the road will increase from 11 million in 2020 to more than 145 million by 2030.

The article also said that most of the batteries built today aren’t designed to be recycled and can release toxic chemicals and heavy metals into the environment if mishandled.

“That wasn’t much of a problem when electric vehicles were rare. But now the technology is taking off,” the article said.

Story continues below advertisement

A possible solution to this is fewer car owners. Rather than replacing all combustion engine vehicles with electric cars, more people could rent or subscribe to car share services.

“Give them the choice that rather than buying, maybe you should be renting or maybe there is another option available, which has less environmental footprint,” said Saibal Ray, academic director at the Bensadoun School of Retail Management at McGill University.

The food supply chain

Reducing emissions and the environmental footprint of supply chains isn’t only about manufacturing.

Canada’s agriculture sector accounts for roughly eight per cent of the country’s greenhouse gas emissions, according to government statistics. It also produces large amounts of methane, which is up to 20 times more potent than carbon dioxide when it comes to increasing global temperatures.

But the environmental impact of agriculture is about more than just greenhouse gasses. That’s because farming — especially large-scale, industrial farming — can change landscapes and alter the biodiversity of entire regions.

“At the level of the individual farmer or food producer, or at the level of the artisanal processor, there’s all kinds of evidence of people taking very seriously our impact on the food system,” said Jodi Koberinski, an environmental researcher and doctoral fellow at the University of Waterloo.

Story continues below advertisement

“On a systemic level, though, we have a real issue with Canada maintaining an export focus on agriculture, in which food is viewed simply as a commodity.”

Click to play video: 'Farmer-led coalition calls for federal funding to cut agricultural emissions'
Farmer-led coalition calls for federal funding to cut agricultural emissions


Koberinski, a former executive director of the Organic Council of Ontario, believes consumers and farmers want locally-grown, sustainable produce.

She says the biodiversity that used to exist in farming has been replaced by single-species, cash crops that are shipped all over the world. This can undermine farmers in developing countries and change local diets.

“We are now exporting malnutrition to India because we replaced diverse, complex multiple varieties of beans and pulses with a yellow split pea, which was not part of the Indian diet,” she said.

Story continues below advertisement

Global trade in “agri-food” products has doubled over the past two decades and is now worth more than $1.5 trillion a year, according to a recent UN report.

The report found that about a third of global food exports cross international boundaries at least twice and that fewer trade barriers have driven up profits for farmers around the world.

But the report also found that small-scale farmers often “miss out” on these benefits and that more needs to be done to improve infrastructure and deploy technology in poorer, more rural communities.

Koberinski, meanwhile, believes less attention should be placed on expanding global supply chains and more should be given to increasing local food security in Canada and abroad.

“This isn’t some Pollyanna idea that we can do everything locally and that we’re not going to need trade,” Koberinski said.

“But by beginning to localize where we can, we can start to make the sorts of shifts that respect other people’s capacity to produce food for themselves.”

Sponsored content