Product Environmental Footprint and Ecolabeling

AN APPROACH FOR BOTH ENVIRONMENTAL RESPONSIBILITY AND PROFITS

Business interest in environmental footprinting stemmed originally from an understanding of supply chain vulnerabilities and complexities, and this remains an important driver. However, with growing public concern over environmental issues, environmental footprinting has grown in importance to many businesses, with three types of drivers:

• Supply chain risk management
• Insight and decision support for product or process design
• Retailer or investor requirements,such as carbon labeling and sustainability reporting

The movement to understand the environmental footprint of products and services is gaining speed. As yet, no government has formally legislated that goods and services be labeled to show the carbon emitted, water used, or other environmental impact categories created during their lifecycle of production, distribution, and disposal – although some, such as France and Japan, have initiatives to encourage the practice. However, legislation is expected to come into force in the not-too-distant future. Manufacturers, retailers, and some service providers are already preparing for its arrival. In the interim, they are benefiting from public reporting of product environmental footprints, or “ecolabeling,” to enhance their brands, reduce waste, and drive down their own energy consumption.

2009, SAP Insight