Product‐level carbon auditing of supply chains: Environmental imperative or wasteful distraction?

Interest in product‐level carbon auditing and labelling has been growing in both business and government circles. The purpose of this paper is to examine the practical problems and costs associated with highly disaggregated analyses of greenhouse gas emissions from supply chains. It then weighs these problems and costs against the potential benefits of the carbon labelling of products.

The views expressed in this paper are based on a review of relevant literature, informal discussions with senior managers and personal experience with the practices being investigated.

Stock‐keeping unit‐level carbon auditing of supply chains and the related carbon labelling of products will be fraught with difficulty and very costly. While simplification of the auditing process, the use of data inventories and software support may assist these processes, the practicality of applying them to all consumer products seems very doubtful. The resulting benefits to companies and consumers are also highly questionable. The main conclusion, therefore, is that product‐level carbon auditing and labelling is a “wasteful distraction” and that it would be better to devote management time and resources to other decarbonisation initiatives.

To date relatively few firms have carbon audited their supply chains at a product level and so industrial experience is limited. Market research on the likely behavioural response to carbon labelling is also at an early stage. There is sufficient evidence available, however, to conduct an initial critique of product level carbon auditing and labelling.

Some companies and government agencies should reconsider their plans for the carbon labelling of products.

This is the first paper in the logistics/supply chain literature to discuss the advantages and disadvantages of this new form of carbon footprinting and labelling. It is intended to stimulate debate among logistics academics and practitioners.