A Guide to Decarbonization for the Nutraceuticals and Supplements Industry

The nutraceuticals and supplements industry is increasingly recognizing its role in mitigating climate change. As consumer demand for sustainable products grows, so does the imperative for companies to reduce their greenhouse gas (GHG) emissions. This guide will walk you through the steps, measurement techniques, technologies, and methodologies your brand can employ to achieve meaningful decarbonization, emphasizing the critical role of engaging with your supply chain.

[fs-toc-h2]Steps to Reduce Greenhouse Gas Emissions

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1. Innovations in Ingredients

• Sourcing Sustainable Raw Materials: Choose ingredients that have a lower environmental footprint. Consider plant-based alternatives and sustainably harvested botanicals.
• Regenerative Agriculture: Support farming practices that restore soil health and sequester carbon, such as no or low-till farming, cover cropping, and agroforestry.
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2. Clean & Efficient Processing

• Energy Efficiency: Invest in energy-efficient equipment and optimize processes to reduce energy consumption. Implement heat recovery systems to capture and reuse waste heat.
• Clean Energy: Transition to renewable energy sources, such as solar, wind, or hydroelectric power, to power manufacturing facilities.
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3. Transportation

• Efficient Logistics: Optimize supply chain logistics to reduce the carbon footprint of transportation. Source locally or regionally where possible. Use route planning software to minimize travel distances and consolidate shipments.
• Low-Emission Vehicles: Invest in electric or hybrid vehicles for your fleet, or work with logistics partners who prioritize low-emission transport options.
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4. Energy Use

• On-Site Renewable Energy: Install solar panels or wind turbines on-site to generate clean energy and reduce reliance on fossil fuels. Choose co-manufacturers and suppliers that use clean energy.
• Energy Management Systems: Implement smart energy management systems to monitor and optimize energy usage in real-time.
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5. Packaging

• Eco-Friendly Materials: Use recyclable, compostable, or biodegradable packaging materials. Consider lightweight packaging, or sending refills in minimized packaging where consumers refill their jars at home, to reduce transportation emissions.
• Design for Recyclability: Ensure packaging is designed for easy recycling by avoiding mixed materials and using clear labeling.
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6. Consumer Use

• Educate Consumers: Provide information on how consumers can reduce their environmental impact through proper product use and disposal.
• Sustainable Product Design: Develop products that require less energy or water to use, or that have longer lifespans.
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[fs-toc-h2]Measurement Techniques
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1. Carbon Footprinting - Corporate Greenhouse Gas Accounting

Conduct a comprehensive carbon footprint assessment to identify your company's sources of GHG emissions. Corporate GHG accounting involves measuring across your entire company and value chain. Choose a provider that aligns with the Greenhouse Gas Protocol to standardize measurements.

Scope 1 and 2 Accounting: Measure direct emissions from owned sources and indirect emissions from purchased electricity.

Scope 3 Accounting: Measure and manage indirect emissions in the value chain. This includes emissions from purchased goods and services, transportation, waste, and end-of-life treatment of sold products. Scope 3 typically accounts for the majority of a supplement brand's emissions, making it a critical focus area.
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2. Carbon Footprinting - Life Cycle Assessment (LCA)

LCAs are a cornerstone of your sustainability efforts. Perform an LCA to evaluate the environmental impacts of your individual products across their entire life cycle (from cradle to grave). This includes raw material extraction, manufacturing, waste streams, packaging, distribution, use, and disposal.

LCAs can help you identify hotspots to determine which stages of the product life cycle contribute the most to your emissions footprint and can measure metrics beyond carbon, like embodied energy use, water use, and land use.

Using the insights gleaned from the LCA, you can prioritize areas like ingredients, transport, or packaging and create specific targets for emissions reduction for that product.

It's best practice to transparently communicate the climate impact (and all the progress you've made) of your products to stakeholders - like boards, investors, retailers, and consumers - through impact reports or climate labels.

3. Supplier Engagement

Work closely with suppliers to collect accurate data on their emissions to impact your Scope 3 target setting and reduction planning. Encourage them to adopt sustainable practices. Use supplier scorecards and sustainability assessments to track progress.
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[fs-toc-h2]Engage with Your Supply Chain

Lindsay Dahl, Chief Impact Officer at Ritual has found success in her team's decarbonization efforts by having open streams of communication and a strong collaborative mindset with their suppliers. "Having strong supplier relationships has been the key to everything. Detailed data points for product-level LCAs have really opened up conversations internally. The level of data makes everything very real and actionable."

1. Collaboration

• Build strong relationships with suppliers and collaborate on sustainability initiatives.
• Start with listening. Take the time to understand their business, their challenges and the initiatives they’re excited about.
• Share best practices and support them in implementing emission reduction strategies.

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2. Focus on the Scope 3 categories and suppliers that have material impact on your footprint

• Use the insights from carbon accounting to determine which Scope 3 categories and suppliers contribute the most emissions.
• Make sure the quantification of those emissions is relevant and specific to your supply chain so you can use it to inform your supplier prioritization.

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3.  Incentives for data sharing

• Require suppliers to report their emissions and sustainability practices regularly and use this data to identify areas for improvement over time.
• Offer incentives for suppliers to adopt sustainable practices, such as preferential contracts, increase in orders, or financial support for sustainability projects.
• Promote sustainable suppliers through marketing and communication channels. 

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4. Incorporate bi-directional data sharing and knowledge transfer

• Whether you're recognizing an important reduction metric, measuring progress against a goal, or producing a new impact report, share the end deliverable with your suppliers.
• Celebrate your supplier partners and let them know how they've impacted your goals and the progress you're making together.

For more tips on supply chain collaboration and Scope 3 reduction from Lindsay Dahl (Ritual) and other sustainability pioneers in food and consumer goods, watch our latest webinar with Sustainable Brands.

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