Whether you're a designer or an entrepreneur, you have a vision of doing something great. But doing something great isn't just making it commercially viable. That's table stakes today. In the future, it's about doing things environmentally responsibly and with a social conscience.
We need to look at Environmental Profit and Loss,
with over 600 processes. We also need to look at over 200 different raw materials that stretch over 120 different countries around the world. We need to understand the amount of water, waste, how much greenhouse gas we generate. That's CO2, methane. And as well, we also need to understand how much air pollution and land use is needed.
There's a concept known as the social cost of carbon, which also does a very similar thing. By saying that there's a cost to climate change, to society, we are asking to put a price on nature itself. By taking the same concept, we've done that across all the elements of environmental impact so we can better understand not only at a global level, but also at a local level what it means for a particular area or community. For instance, a litre of water in England may not be as dear as a litre of water in Morocco. So having that understanding at a local level is key to how we value impacts in the Environmental Profit and Loss.
50% of our environmental impacts are from the raw material production itself. Another 25% from the transformation of those raw materials into the things we use in terms of fabrics, leather, jewellery, and watches, et cetera. In fact, 93% of our impacts are from our supply chain and only 7% from our own operations. We also discovered where to focus in terms of where we can make the most difference. We created tools that help our brands look at decisions we're making on a day-to-day basis in terms of sourcing, in terms of design, in terms of production, to help reduce our impact, such as Supply chains like mining, and transportation. The methodology used has become an important part of the Natural Capital Protocol. That protocol is now being used by over 150 companies worldwide. And a lot of investors and other stakeholders are looking to that as a new reporting standard to help understand not only a company's environmental impacts, but their reliance on natural resources. We also need to look at circular economy and other approaches that can take waste from other industry and make it into materials that we use today and, avoid environmental impacts from taking new raw materials out of the planet. A profit is something that we still strive for, look for new, innovative ways to reach it. Our environmental footprint.
So, How do we begin to understand the environmental impacts from the design decisions we make?
1. Better Insight: A deeper understanding of the most significant impacts and what is driving them
Understanding the value of impacts and their drivers, enables one to consider trade-offs across locations, materials, processes, products and technologies and implement targeted projects to better address one’s impacts.
2. Better Policies: A greater understanding of risks and opportunities
Understanding risks and opportunities means that a business is fully prepared to respond to challenges. Guidelines, policies and measurable targets help make progress across a wide range of raw materials.
3. Better Relationships: Valuable engagement with suppliers
Look at key suppliers, across five continents, from product assembly right back to raw material producers. Working together with them to manage environmental challenges making their relationships even stronger.
4. Better Transparency: Building trust with stakeholders
Open a dialogue with stakeholders, allow them to share learning and develop a shared understanding on priorities. It also helps suppliers identify opportunities for improvement and innovation.
5. Better Performance: Responding to change and assessing progress
Presenting the impacts in a simple and transparent way has driven a broader understanding within the Group. It has shown how impacts made in one area of the business have far reaching consequences for another. This helps us respond to the drivers of change in the supply chain, including fluctuations in raw material quality and availability. The EP&L also provides a clear basis to assess the performance of their environmental projects and investments.
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