L’Oreal, Nespresso detail strategies for reducing supply chain emissions

This article was originally published in Carbon Pulse and was written by Matt Lithgow.

Companies are increasingly looking to carbon 'insetting' to blend corporate climate targets with attention to resiliency and co-benefits, according to two European-based entities speaking at a webinar on Monday.

Insetting, where companies offset emissions within their own supply chains (Scope 3), often through carbon sequestration, has been picked up by more entities turning their attention to supply chain risk management in the face of various climate stressors and self-imposed GHG targets.

Speaking at a webinar hosted by project developer South Pole Group, the company's director of sustainable supply chains Tilmann Silber emphasised the importance of looking beyond carbon in bolstering companies' operations within developing countries.

"Agriculture supply chains, particularly those in the Global South, particularly those relying on smallholders, really depend for their resilience on ecosystems and communities," Silber said.

"And that's exactly where insetting, through those additional sustainability impacts next to carbon, can help to really deliver a really positive impact on the ground to reduce and act on those risks."

CASE STUDIES

One company that has incorporated insetting within its GHG strategy is Paris-based cosmetics conglomerate L'Oreal, which raw materials sustainability manager Rachel Barre explained is part of the company's two-fold approach to its 2020 climate agenda.

In addition to reducing emissions from plants and distribution centres by 60% below 2005 levels by 2020 and transport by 20%, L'Oreal is seeking to balance its remaining 160,000 tonnes worth of 2015 Scope 1 and 2 emissions and 240,000 tonnes of Scope 3 emissions from transportation to clients through insetting.

L'Oreal has looked at three types of projects to stimulate emissions reductions throughout its supply chain, including clean energy and energy efficiency initiatives, low-carbon farming practices and agroforestry, and sustainable forest management.

As one example, Barre cited Loreal's improved cookstoves project in Burkina Faso, where women boil shea nuts used to produce shea butter for skin conditions.

With 87% of households in Burkina Faso still using wood for cooking and 105,000 hectares of forests disappearing each year in the country, the improved cookstoves save both firewood and CO2 emissions in the process.

"A lot of expenses of the families, especially the poorest families, are dedicated to energy,"

Barre added, as the deployment of the new cookstoves could help defray the costs for women producers as well.

In 2017, the initiative, which L'Oreal calls "Carbon Balanced", prevented the release of 45,200 tCO2e, an increase from 8,300 t in 2016.

The company has additionally set a more ambitious goal to lower its Scope 1-3 emissions by 25% below 2016 levels by 2030, with Scope 3 slated to comprise "significant contributions" to these emissions reductions.

Separately, Swiss coffee company Nespresso, which is owned by Nestle, also attributed risk management in the face of climate change as a main focal point of its goal to targeting insetting projects for both mitigation and adaptation.

"By acting on reduction, we would be able to deliver against Paris Agreement [goals] and consume a lower carbon footprint of our products on Scope 1, 2, and 3," said Julie Reneau, sustainability strategy and stakeholder relationship manager at Nespresso.

Globally, the company plans on fully insetting its Scope 1 and 2 emissions by 2020, but it has already achieved that goal with GHGs from its three Swiss plants, offices, and 700 stores worldwide only contributing to 3% of the lifecycle emissions within a cup of Nespresso.

However, the company has added coverage of Scope 3, which makes up 8% Nespresso's total lifecycle emissions, within its French division.

Nespresso has also pledged to reduce the carbon footprint of a cup of its coffee by 28% below its 2009 levels by 2020, so far having lowered emissions by 19.4% through 2016.

And like L'Oreal, Reneau said that Nespresso was focusing on agroforestry insetting projects, such as intercropping tree cover with coffee plantations, though she did not provide details on specific ongoing initiatives.