Building Common Framework for Reducing Supply Chain Emissions

One of the challenges managers of energy and sustainability face is how to capture Scope 3 GHG (greenhouse gas) emissions in a global automotive supply chain.

This challenge is compounded because, although a protocol exists, there’s no standard way for component suppliers and transportation companies to report their emissions to OEMs. Meeting reporting requirements for each individual OEM is a burden, and as a result our industry as a whole risks missing opportunities to define its carbon footprint.

At the Automotive Industry Action Group, we established an Environmental Sustainability Advisory Group to identify programs that can give suppliers and OEMs common tools to measure and report Scope 3 GHG emissions. One of those tools is the U.S. EPA’s SmartWay Transport Partnership.

SmartWay is a voluntary program that helps companies benchmark fuel consumption and emissions by their freight shippers and carriers. By reporting fuel use, miles traveled and the weight of freight being shipped, companies can quantify carbon-dioxide, nitrogen-oxide and particulate emissions and develop plans to further reduce them. We can capture Scope 3 emissions in the supply chain that we didn’t adequately measure before and then factor these results into an overall calculation of global emissions for the CDP (Carbon Disclosure Project) and other sustainability reports.

Practical Tools

SmartWay data is verified by the EPA and is available at no cost. Organized in an MS Excel file format, it integrates easily into enterprise-wide systems for business management, environmental reporting, compliance, and shareholder response.

We can determine which metric (or combination of metrics) matters most given its specific goals or objectives. For instance, CO2 corresponds to fuel use or efficiency: If reducing fuel consumption in the supply chain is a goal, a carrier’s CO2 score is an important metric to watch.

Actionable Information for Automotive Suppliers

Carriers in the SmartWay program are scored and ranked according to their emissions per mile and per ton-mile. Knowing that they’re being benchmarked among peers, SmartWay carriers are driven to cut costs and develop more environmentally efficient ways to move goods.

OEMs regularly evaluate suppliers on price, on-time delivery and customer service; GHG emissions and other sustainability criteria can be part of this process.

Gain Recognition

For OEMs and their supply chain partners, the SmartWay brand can demonstrate a public commitment to environmentally responsible freight transportation. More than 3,000 businesses participate in the program, and it has value when you’re comparing suppliers and appealing to business partners and customers. In our experience, the more conscientious transportation providers are likely to be SmartWay partners and can help you maximize the value of the program.

Scope 3 GHG emissions are by far the largest component of most organizations’ carbon footprint. As an industry, the benefits of SmartWay would only grow as more companies participate. It’s a proactive, collaborative, harmonized approach that OEMs and their partners can really get behind and support.

Al Hildreth is global energy manager at General Motors.