America's LBM product makers and dealers should pay attention to efforts by The Home Depot, Lowe's, California, and global bodies to do something unprecedented in our industry: Measure the greenhouse gases used in creating, selling, and owning a product.
This campaign to track what are known as Scope 3 emissions is just the start of an effort to curb global warming that goes way beyond installing solar panels and LED lights. And, given the parties pushing the effort, U.S.-based manufacturers and dealers almost certainly will be affected.
Scope 1 emissions are the greenhouse gases produced by sources that an organization owns or control directly--diesel fuel in trucks, for instance. Scope 2 covers emissions created offsite by the generation of energy, such as the electricity brought in from a power plant.
Scope 3 emissions encompass far more activities: The mining or creation of the raw materials; the products' manufacture; their packaging and transportation to the dealer; their handling and sale at the dealer; and then how that product is used by the consumer.
At a typical DIY dealer, reducing Scope 1 and 2 emissions amounts to just 1.5% of the total emissions that experts believe can be attributed to a dealer’s operations and products. Just about all the rest is in Scope 3.
A task force of home center dealers from around the world, including The Home Depot and Lowe's, formed a task force last year to begin figuring out how to classify and measure their stores' greenhouse gas emissions. On June 12, at the Global DIY-Summit in Rome, the task force released a strategy and roadmap for tackling the issue.
The group's organizers also announced the creation of a Home Improvement Scope 3 Suppliers Task Force, which includes firms such as 3M, Bosch, Henkel, and Bostik.
Typical DIY retailer: Total emissions 0.47%, scope 2 is 1%, scope 3 is 98.5%.
“We need to come together to decarbonize inch by inch,” said Thierry Garnier, president of Britain’s Kingfisher Group and current chair of EDRA/GHIN, the association that puts on the Summit. “[Helping] Our planet is about all of us doing our part.”
Should American companies care about this? Well, The Home Depot's ESG Report declares it has committed "to science-based targets to reduce Scope 3 'Use of Sold Products' emissions 25% by 203 from the 202 base year." Lowe's aims to reach net-zero greenhouse gas emissions by 2025. Lowe's also has begun meeting with suppliers to explain what's in Scope 3.
The fact that both The Home Depot and Lowe’s are involved means manufacturers selling into those two powerhouses will have to take part, because the big boxes will ask for Scope 3 numbers. And non-U.S. companies that want to sell to Europe and Asia will be doing this for their local clients, so they’re going to get busy collecting those numbers even if U.S. businesses don't request them.
Regulators are less of a pressure point here except in California. That state requires that, starting in 2027, any business entity doing business in California with total annual revenue topping $1 billion must disclose their Scope 3 greenhouse gas emissions.
Suppliers are going to have to respect this initiative if they want to sell. Maarten Ramp of Maxeda, the biggest DIY chain in the Benelux countries, said during the Rome summit that his firm believes 55% of the greenhouse gas emissions in the products it sells come from the manufacture and packaging of those products. As a result, it now includes sustainability along with price, quality, and performance when it reviews which products to buy. It has created a sustainability score ranging from A to E for each product it reviews, and high-performing suppliers will get preference.
Several exhibitors at the summit pushed environmental messages at their displays. For instance, Bosch explained how its packaging changes result in lower greenhouse gas emissions (see photo at right). And Ledvance, whose light bulbs are sold under the Sylvania brand in the U.S., showed off lamps made of recycled plastic and cloth cords.
Ultimately, of course, the goal isn't just to measure greenhouse gas emissions but also commit to reducing--or better yet, eliminating--them.