A key to driving decarbonization is to understand the environmental footprint coming from your own supply chain. However, many steel and manufacturing SME organizations lack primary CO2qemission data and are challenged in their emission tracking and reporting. ChainTraced provides you with a structured approach and an efficient digital toolset to enable more efficient, dynamic, and accurate PCF calculation and reporting.
Within the metallic value chain traceability has quickly become a challenge, not the least for the many SMEs that serve large customers in their need for improving transparency and collaboration, as well as ensuring compliance with new and upcoming regulatory frameworks. This in combination with an urge to contribute to more sustainable and circular production, have strengthened the demand and interest for more scalable ways of collecting, calculating and reporting Product Carbon Footprint (PCF).
Supply chain traceability today
Today many SME´s within manufacturing still only provide limited, if any, PCF reporting to their customers. Current emission accounting and CO2 calculation are often very manual, inefficient and resource intense. With a lot of room for own assumptions of what to include in the calculation, and where to find the emission data needed. Due to lack of primary CO2 emission data, companies usually use secondary data for their calculations, causing inaccurate or unreliable emission value statements and reporting.
To accelerate change towards a more accurate, scalable, and secure calculation of the emission footprint you need to acknowledge the complexity in data sharing along the supply chain. In the metallic value chains, for example, a large part of the emission occurs in early stages of the value chain. This makes the access and recognition of primary data even more crucial.
A first important step is to evaluate alternative ways-of-working and designated digital tools to collect more valid primary data from your suppliers. With increasingly higher demand for traceability, more scalable processes and administration for PCF traceability is needed, also in the sense to serve new and future customers and comply with different regulatory frameworks.
Increasing demand for scalable PCF reporting
At ChainTraced we help companies within the metallic industry to increase traceability by providing a digital end-to-end solution focused on tracing raw material to end product across the metallic value chain. We believe that supply chain traceability creates great opportunities across the value chain and for all within.
The ChainTraced solution supports several business needs, where empowering sustainability leaders on the journey towards decarbonization and improved digital tooling for GHG accounting, transparency and supply chain collaboration is a core part of our missions. To drive change we are also participating in different innovation projects, for example within automotive, where our main role is to contribute with a systematic approach and digital toolset for collecting, exchanging, and presenting CO2 data to help SME´s be more competitive.
Within the metallic value chain specifically, different metals have various regulatory requirements. The Carbon Border Adjustment Mechanism (CBAM) for steel products is one example. Depending on type of metal and/or regulation, the calculation methods and decarbonization drivers may differ. With no “one-fit-all-template” for accounting or reporting, there may also be uncertainties what method to use.
The ChainTraced PCF process
Scalable PCF calculation and reporting is one area where we meet an increasing demand, and SME organization's need to assess the conditions of their supply chain. The ChainTraced platform offers an easy, accurate and visual toolset to improve supply chain collaboration, and scale practices for sharing Product Carbon Footprint(PCF) and primary emission data.
First of all there are three important pillars in a scalable PCF calculation:
1. Supplier collaboration and collection of upstream emissions – for more accurate estimates.
2. Add internal core emission data, combine with your upstream emissions data, and calculate the PCF – to get a broader picture.
3. Communicate a more accurate, dynamic, and transparent PCF report to your customers – to contribute to an end-to-end decarbonization journey.
Before the emission data collection starts it is important to identify, analyse and prioritize which regulatory requirements, suppliers, categories, and products to focus on, in order to define the data needed. It is also valid to establish an action plan, and a routine for process updates ensuring that the correct data is continuous collected and updated.
How does it work in practice and what are the benefits?
Here is a short summary of the workflow process for starting to establish scalable PCF calculations in practice with the ChainTraced traceability platform, and how it works out of a user perspective:
1. Manage customer PCF requests in one place
Begin by inputting or importing your customer requests. Connect customer products to your products, and if necessary, configure your Bill of Materials (BoM) to link finished products with purchased raw material.
2. Setup your PCF
Create and link company, process, category, or product-specific datasets to establish scalable practices for building dynamic PCF models. Over time, these models can be refined and optimized to best support and promote your sustainability efforts.
3. Collect PCFs from suppliers
Specify your purchase products, suppliers, and, if applicable, volume allocation. Trigger requests to suppliers, enabling you to monitor and validate incoming PCFs provided by your suppliers effectively.
4. Submit your customer PCF
Initiate the submission of validated and traceable PCFs, either in bulk or one by one, to your customers. These PCFs will dynamically be updated and promote your sustainability efforts.
Are you interested to know more about how you could refine and scale the traceability, calculation and reporting of emission in your supply chain? Then we suggest you book an introduction meeting. We´d be happy to hear about how you address the emission calculation and decarbonization in your company and show you how we at ChainTraced help other manufacturing companies along the metallic value chain.