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Businesses are going beyond reducing their direct environmental impact to combine climate action with sustainable development in the supply chain, delivering value across the company. We review how one company has taken a unique approach to ensure it ‘earns the badge’ and creates positive and long-lasting impacts both within and outside the business.
As Simon Hotchkin, Head of Sustainable Development at Taylors of Harrogate, described at an event on sustainable development in the food and beverage industry, customising a project to align with the specific goals of the business meant the value went much deeper.
Setting a goal for the business
In 2015, Taylors set a goal to achieve carbon neutral sourcing by 2020. A life cycle assessment determined the complete greenhouse gas (GHG) emissions associated with its tea and coffee products from “cradle to retail customer”; from raw material extraction through materials processing, manufacture and distribution. Some opportunities for internal reductions have been identified as a result: limiting the use of fertilisers and pesticides during cultivation, optimising transport routes, and considering eco-design principles for product packaging.
But the carbon neutral commitment means Taylors must go further and compensate for the emissions it can’t reduce through efficiency and process changes. Carbon finance projects enable companies to offset their emissions and meet reduction targets. However, for Taylors it was critical that the carbon finance did more: the projects must directly impact the smallholder farmers within its supply chain, building resilience, improving livelihoods and delivering monitored and verified results.
Beyond internal reductions
Carbon finance enables corporates to select projects by location, activity/technology, or sustainable development impact to ensure alignment with broader business goals. For Taylors, roughly 40% of the company’s total carbon footprint is attributed to its tea business, with 67% of those emissions originating upstream in the supply base. By focusing the first phase of its CarbonNeutral® sourcing programme on its tea supply base in Kenya, it not only reduces emissions, but also supports its smallholder farmers to improve their livelihoods and build resilience through tree planting.
Through a collaboration between Taylors, its key supply partner the Kenya Tea Development Agency (KTDA), and a carbon-financed community reforestation project, the project will plant one million trees around four key tea supply areas in the Central Highlands region of the country. Through their involvement in the programme, tea farmers receive training on conservation farming to enhance land productivity and alternative crops and products to improve food security and develop new income streams. The trees themselves help to improve local biodiversity, bear fruit and nuts which can be sold to market, and clippings provide a sustainable food source for livestock.
As with any business activity, metrics are required to quantify and evaluate the success of the programme. Using a carbon finance approach ensures projects are monitored and verified on a regular basis by independent third parties to measure and report the impact being delivered. In addition to the quantified emission reductions, projects deliver a range of beyond-carbon sustainable development benefits, such as health and well-being improvements, food security, economic growth and biodiversity protection. This provides Taylors with a precise climate action metric - emission reductions - against its product footprint, and the ability to articulate sustainable development benefits delivered by the project to the local environment and communities.
In Kenya, the details of every participating tea farmer are recorded: we know the location and species of every tree planted, and capture the data on tree growth to assess carbon sequestration. Trained and employed quantifiers – who are themselves farmers – visit the farms to capture this data on GPS enabled devices, which is then uploaded to the database and can be accessed around the world. Validated by the Verified Carbon Standard and the Climate Community and Biodiversity Standard, the results are independently verified in order to generate carbon credits which Taylors uses to meet its CarbonNeutral goal.
One year into the programme, Taylors is already more than halfway to its five-year target of 3,700 tea farmers, with 1,913 farmers already engaged in the programme and 32,000 of the one million trees planted. The bottom-up approach is critical to its success: farmers are encouraged to form their own groups, to choose and source the trees they want to plant, and to share best practice with other farmers. Rotating group leadership grants each farmer an opportunity to develop leadership skills, with a requirement for leadership to be shared equally between men and women.
Scale the programme
For most businesses, particularly in the food and beverage sector, supply chains are complex and global, making it virtually impossible and unrealistic to tackle sustainable development across the entire supply chain in one go. By identifying projects where a business can deliver the greatest impact, it can develop a phased approach with clear objectives and timelines to maintain momentum.
For Taylors, the emissions reductions from the first phase of the programme in Kenya will only take the company 35% of the way to its CarbonNeutral sourcing goal. Phase two of the programme will take a similar approach but for coffee, following the same fundamental principle: becoming carbon neutral by delivering finance for tangible positive impact on communities directly within the supply base. That’s what’s required to “earn the badge”.
If you’d like to learn more about how carbon finance can support your business address supply chain challenges, improve resilience and deliver against the Sustainable Development Goals, please contact us.