Powering Performance

Building a Common Framework for Reducing Emissions in the Automotive Supply Chain

Posted by AIAG on Apr 19, 2017 12:56:13 PM

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Tracking GHG emissions is a challenge in the auto industry. But for component suppliers, reporting emissions may be an even bigger issue. These businesses work with a multitude of OEMs, each one asking for Scope 3 GHG emissions data. Meeting different reporting requirements is a burden and, as a result, the automotive supply chain risks missing opportunities to define its carbon footprint.

Suppliers and OEMs need common tools to measure and report Scope 3 GHG emissions, explains Al Hildreth, chairman of the AIAG Greenhouse Gas workgroup. He says the U.S. Environmental Protection Agency SmartWay Transport Partnership can be that Scope 3 GHG reporting standard for logistics in the auto industry. “The benefits of SmartWay would only grow as more companies participate,” says Hildreth, Global Energy Manager for General Motors.

“This is a proactive, collaborative, harmonized approach that AIAG members can really get behind and support.”

SmartWay is a voluntary program that helps partner 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 CO2, NOx, and PM emissions and develop plans to further reduce them.

“For example, at GM we can show that our logistics initiatives prevented 81,216 tons of carbon emissions in 2015,” Hildreth notes, equivalent to emissions from more than 13 million gallons of gasoline burned. “We’re able to capture Scope 3 emissions that we didn’t adequately measure before and can determine the impact of freight transportation on our total carbon footprint without the need for proprietary tools or methods.”

GM can then factor results from the supply chain into its overall calculation of global emissions for the CDP (Carbon Disclosure Project) and other sustainability reports. “It’s very exciting to our management, suppliers, and customers who share our environmental commitment,” he says.

Practical Tools

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

Shippers 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.

“Many of us who manage sustainability programs come from a facilities background and aren’t immediately familiar with how to capture emissions in a complex, global supply chain,” Hildreth says. SmartWay provides those tools.

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, Hildreth says; GHG emissions and other sustainability criteria can be part of this process in the future. 

Gain Recognition

The SmartWay brand demonstrates a public commitment to environmentally responsible freight transportation. More than 3,000 businesses participate in the program, from Fortune 500 firms to smaller enterprises across sectors including retail, manufacturing, consumer goods, and chemicals. The EPA also recognizes outstanding performance through the SmartWay Excellence Awards.

“The SmartWay brand shows that you’re concerned about energy and cost savings, corporate citizenship, climate action, environmental accountability, and compliance,” says Hildreth. “It has value when you’re comparing suppliers and appealing to business partners and customers.”

Leverage SmartWay Support

The SmartWay program has a team of experts who can provide technical expertise, data analysis, and training for shippers and transportation providers. These services are free to SmartWay partners so you can save on outside consultants or proprietary methods or complex tools.

Carriers are another source of support. “In our experience, the more conscientious transportation providers are likely to be SmartWay partners and can help you maximize the value of the program,” Hildreth says.

Ultimately, he adds, Scope 3 GHG emissions are by far the largest component of most organizations’ emissions footprint. Sustainability managers at AIAG-member suppliers have more resources available than they may think. They just have to ask.

To learn more, visit www.epa.gov/smartway.

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