PG&E Claims Industry First with Supply Chain Footprint Project

SAN FRANCISCO, CA — Following in the footsteps of Walmart, IBM and Procter and Gamble, Pacific Gas and Electric Co. officially launched a project this week to size up the carbon footprint of its supply chain.

The company is joining forces with the University of California, Berkeley and San Francisco-based Climate Earth to measure the full carbon footprint of products and services in its supply chain. The move makes the Northern California utility the first in its sector to measure these so-called Scope 3 emissions, PG&E said Tuesday in a presentation announcing the research project to its employees.

"The intention of the work we're beginning to do with UC Berkeley and some other partners you'll be hearing about this afternoon is really to answer: Where are the opportunities as it relates to products and services we purchase?" said Desmond Bell, PG&E's chief procurement officer. "As utilities, if we focus on them, we can really move the needle (of) our environmental performance."

The initiative's roots can be traced to a green supply chain program first tested in October 2007 and officially launched last year. The company began discussing an examination of its supply chain emissions with UC Berkeley and Climate Earth in January. The joint project officially began June 1 and will last roughly one year. PG&E and UC Berkeley received a UC Discovery Grant to fund the project, which will also be co-sponsored by two suppliers in collaboration with PG&E.

The partners will begin with a scoping study to evaluate PG&E's supply chain footprint before conducting a lifecycle analysis (LCA) to improve the accuracy of the results over time. Goods and services to be examined range from electricity generation and transmission equipment to fleet vehicles and office furniture.

Climate Earth's carbon accounting software uses what it calls a "hybrid top-down" LCA that combines financial and environmental data to estimate impacts.

"We feel that hybrid top-down is the best approach, and there are numerous academics and literature papers that support this," said Corinne Reich-Weiser, Climate Earth's director of research. She noted the approach has helped other Climate Earth clients make better business decisions that simultaneously reduced emissions, such as a contractor that successfully pursued lower-carbon concrete and a playground manufacturer that identified and marketed the low-carbon offerings within its product line.

The project will survey 50 PG&E suppliers, from which three to five will be selected for in-depth case studies and the development of greenhouse gas reduction strategies. The partners will eventually produce an academic peer reviewed journal article, as well as a detailed final project report with multi-year carbon footprint analysis, quantification of potential greenhouse gas reduction strategies and recommended best practices.

"UC Berkeley isn't really interested in a project that isn't cutting edge," said Chris Jones, a staff research associate at the UC Berkeley's Renewable and Appropriate Energy Laboratory. "This project very much is a cutting edge project. We can learn a lot from it, not only just for utilities, but from a research perspective as well."

For PG&E, it is expected to uncover energy savings for company and its suppliers, help it understand its supply chain and stay ahead of regulatory and reporting trends. In the process, the project can burnish PG&E's brand and strengthen its role as a thought leader in the sustainability space.

Flickr image courtesy of PG&E.