Logistics, packaging, agri value chain: How ITC is working towards abating Scope 3 emissions

Accounting for about 75 per cent of the industrial carbon footprint, the majority of large Indian companies have been focusing their Scope 1 (direct emissions) and Scope 2 (emissions from direct purchases of energy). The indirect emissions, which occur in activities outside the boundary of an organisation (coming from the value chain) classified under Scope 3, are often neglected. But not for Kolkata-headquartered ITC.

Having a diversified presence across industries such as FMCG, hotels, software, packaging, paperboards, specialty papers, and agribusiness, while working extensively on Scope 1 & 2 emissions over the years, ITC is undertaking a detailed exercise to estimate and abate its Scope 3 emissions.

“Scope 3 GHG emissions by definition implies emissions which occur in activities outside the boundary of an organisation and hence the accounting, monitoring, and mitigation of these emissions is a challenge. We are also undertaking a detailed exercise to estimate the ITC’s Scope 3 emissions with the help of external subject matter experts. This will enable the development of systems to capture data/information to monitor these emissions regularly and also undertake interventions to reduce these emissions,” says Madhulika Sharma, Chief Sustainability Officer of ITC Ltd. She told Business Today, "Our efforts have been focused on building capacities of our suppliers and enabling them to reduce emissions, as majority of these suppliers are small & marginal farmers as well as small & medium enterprises.”

Agri value chain: 

To reduce its carbon footprint across the agri value chains, ITC is working closely with farmers to promote climate-resilient practices such as zero tillage (process where the crop seed will be sown through drillers without prior land preparation and disturbing the soi), soil conservation measures, balanced crop nutrition, drip irrigation, and large-scale watershed development programmes. “We have implemented a Climate-Smart Village initiative which is aimed at building the climate resilience of farmers and has covered over 8 lakh acres across 2,500 villages till date. The initiative has resulted in the reduction of GHG emission by upto 66% while enhancing net farmer income by 93% for the Soybean crop in Madhya Pradesh,” says Sharma. As a part of ITC’s Sustainability 2.0 agenda, ITC has taken an ambitious target to scale up the Climate-Smart Village initiative to cover 3 million acres by 2030.

Packaging:

To address the issue of GHG emissions from plastic packaging, ITC has been working on a two-pronged strategy. First is by making packaging more sustainable, and second is by creating circular models for materials that are Replicable, Scalable and Sustainable with an aim to replace virgin material and thereby reduce emissions. 

“For making packaging more sustainable, ITC has developed the Centre of Excellence in material sciences and recycling to work on reducing the footprint of packaging. The Centre sources Circular packaging design experts from its Paperboards, Packaging and FMCG Businesses. The Centre continuously works on reducing the packaging weight without compromising the product shelf life and simplifying the packaging materials to improve its recyclability,” says Sharma.

Logistics:

For an FMGC company like ITC, the logistics footprint is enormous. For this, ITC is working on optimising transportation networks and the electrification of processes. “For optimising the transportation network, we have strategically located our Integrated Consumer Goods Manufacturing and Logistics (ICML) facilities for FMCG businesses closer to the market. This allows for making direct shipments to customers, thereby avoiding intermediate movements and optimising distribution logistics,” adds Sharma.

The ‘ITC One Supply Chain’ initiative covering ITC’s total network in India has resulted in route optimisation, improving the share of higher capacity vehicles and utilisation, thereby lowering the total kilometres traversed by ITC’s products. This, combined with rail and sea shipments, has helped reduce GHG emissions. ITC has also deployed Electric Vehicles (currently available are small-sized vehicles) for shipping material to the distributors. Currently, these vehicles are running in 7 metros, covering ~4,000 trips annually. This initiative will be further scaled up by adopting larger electric vehicles.

ITC is not alone. Although a few, an increasing number of companies have started looking beyond just the direct emissions (Scope 1 and Scope 2). As surprising as it may sound, if every company in India makes conscious efforts towards all three scopes, it can play a significant role in achieving India’s net zero targets much before 2070.

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