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Smart packaging’s role in supply chain carbon accounting

In an era defined by heightened environmental awareness and the urgency of carbon reduction, supply chains are undergoing a profound transformation. At the forefront of this revolution is the integration of smart packaging technologies, a game-changing innovation that is redefining the way organisations measure, manage and reduce their carbon footprint.

As businesses strive to align with sustainability goals and regulatory mandates, the marriage of smart packaging and carbon accounting emerges as an effective solution for transparency in supply chain operations.

Supply chain intelligence provides granular data for carbon accounting

For most businesses, carbon accounting in supply chains relies on static, retrospective data. Smart packaging, through embedded sensors and intelligent technologies, heralds a new era by providing an increased level of granularity.

Manufacturers and distributors can now track the exact conditions under which goods are transported and stored. For example, tracked factors may include product storage temperatures or the precise distance a product has travelled.

This level of detail and dynamic data feed, coupled with carbon management technology solutions, empowers companies to capture deviations from optimal conditions and analyse their subsequent carbon implications. In turn, manufacturers can utilise this insight to target specific areas of a supply chain for carbon reduction.

For instance, let’s consider a shipment of raw materials. Smart packaging equipped with GPS technology can continuously track the shipment’s mode of transport and distance travelled, both essential for calculating the emissions associated with logistics. Connectivity technologies such as cellular, RFID, or IoT, can be embedded in smart packaging to establish a real-time connection with transportation vehicles, providing data on speed and acceleration, and further insight into driving behaviours that influence emissions.

In addition, smart packaging can incorporate sensors that capture data on environmental factors, including temperature. This data is crucial for understanding the emissions associated with transportation conditions, for example the specific use of cooling refrigerants.

Regulatory compliance enforces transparent supply chain carbon accounting

More granular supply chain emissions data has an obvious benefit to the planet, alongside significant cost savings from efficiencies. But to make the business case for data-driven carbon accounting even more compelling, there is regulatory compliance.

As part of the quest for a more sustainable future, regulations are increasingly coming into force that require organisations to disclose their carbon footprints, with some enforcing the reporting of Scope 3 emissions. For those unfamiliar, these are indirect emissions associated with an organisation’s value chain - from transportation, distribution and processing of products to name a few.

Sustainability disclosure regulations

Take the Corporate Sustainability Reporting Directive (CSRD) as an example. This regulation will require all large enterprises that carry out business in the EU, including those based outside of the EU, to disclose their carbon footprint starting in 2024, covering Scope 3 emissions too.

Reporting regulations like this one mean that decarbonising manufacturing operations isn't a mere aspiration; it's an actionable imperative, making data-driven carbon accounting an even more important tool, and smart packaging an even more exciting revolution.

Smart packaging and carbon accounting drive sustainable innovation

The pairing of carbon accounting with smart packaging data has several other benefits too. One is that the resulting data-driven insight often pushes sustainable innovation within the supply chain. By identifying emissions hotspots linked to specific conditions, organisations can design interventions that address the root causes of emissions. For instance, if smart packaging data shows that a substantial portion of emissions occurs during specific transportation routes, supply chain managers can explore alternative routes, reduce transportation frequencies, or implement energy-efficient technologies to mitigate carbon impact.

In addition, improved visibility into product lifecycles fosters the development of more eco-friendly packaging materials, streamlined logistics and optimised production processes – all of which can contribute to reduced carbon emissions.

Beyond the confines of the supply chain, the benefits resonate with customers too. As sustainability becomes a significant purchasing factor, consumers are increasingly demanding information about the environmental impact of products. In fact, over the past five years in the consumer packaged goods industry, products making sustainability-related claims accounted for 56% of all growth.

By scanning a QR code or tapping an NFC-enabled tag, customers can gain access to information about a product's journey and carbon footprint. This creates an avenue for learning about carbon accounting and encourages more environmentally conscious decision-making.

Looking to the future of supply chain carbon accounting

Smart packaging's ability to provide real-time data on key factors that help model an accurate carbon footprint of a supply chain stands as a testament to its transformative potential. In a world where both transparency and sustainability are paramount, the integration of smart packaging with carbon accounting tools will foster a culture of proactive emissions reduction and informed decision-making.

If you’re not sure where to begin when it comes to carbon accounting, reach out to our team, who can answer any questions you have and help you decarbonise with confidence.


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