Digital identification: Follow the carbon

January, 2024

Digital identification: Follow the carbon

In the modern landscape, businesses often prioritize the need to "follow the money." Sophisticated financial systems track every cent, ensuring transparency, accountability and efficiency. But as the urgency of the climate crisis intensifies, and businesses start designing tomorrow’s circular models, there's a new imperative: "follow the carbon." How can businesses measure, track, and ultimately reduce their environmental footprint with the same precision and security they apply to their finances?

Digital identification: Follow the carbon

The power of digital identification
Over the last decade sustainability leaders in every sector have learned how challenging it is to measure carbon footprint. While inspiration and guidance have been pioneered by NGOs including the Ellen Macarthur Foundation, basic practical challenges are hampering progress. Questions about how much carbon a specific product emits in its life are often met with few facts and lots of assumptions. What if businesses could gather information for carbon as effectively as they do with their financial system?

“Leveraging technology and innovation creates the opportunities to dramatically accelerate the circular economy and a transition to a low carbon economy.” — Tyler Chaffo, Sustainable Technologies Strategy Manager, Accenture.

Digital identification solutions have the capability to track and report information from individual items. They are already commonly used in retail for inventory management, product history authentication and loss prevention and detection purposes. 

By tagging individual items, companies can trace the entire lifecycle of a product, from raw material extraction to end-of-life disposal. This granular data provides insights into the carbon footprint at each stage, enabling businesses to identify areas for improvement and implement sustainable practices.

The missing billions
Food waste is one of the greatest contributors to greenhouse gasses. Research reveals the food industry is discarding $114 billion [Source: Avery Dennison, The Missing Billions. 2022] of inventory each year due to expiry dates, damaged goods, and overproduction. Reducing this unnecessary financial and environmental waste requires knowing precisely where in the supply chain the problems are occurring. With RFID tagging retailers can track the journey of a fresh salmon from the fishery to the store shelf. This data can reveal the food producer's carbon emissions from transportation and refrigeration. It can also identify precisely where the item leaves the supply chain until checkout or delivery to a consumer. By analyzing this information, retailers can make more informed decisions, such as sourcing more locally, or investing in energy-efficient transport and refrigeration systems.

“The same technology that allows food retailers to track inventory from producers through their entire logistics supply chain can also be used to track and reduce waste.” — Peter Jackson, Global Market Development Manager, Avery Dennison.

Fashion is another industry under the spotlight and striving to be more sustainable. As the early adopters of RFID solutions in stores, fashion retailers understand the potential better than most. Now they are imagining what the technology can do when a garment’s RFID tag shares information at every stage of an item’s life cycle. 

By integrating RFID into garments at the factory, a brand can benefit from all the usual advantages up to the point where consumers buy them, including inventory management and loss prevention. When garments reach their end of life, digital identification helps enable sorting and processing though recycling at scale to create new material. This solution is currently being piloted by Avery Dennison and TEXAID. TEXAID is a European based collector and sorter of pre- and post-consumer textile waste.

A new capability to build a sustainable future
Item level digital identification is a key enabling technology for businesses to "follow the carbon". The time to act is now. 

Discover more about The Missing Billions research from Avery Dennison.


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