In Part 1 of this series of posts from the PLM Green Global Alliance on the Role of PLM in Slowing Climate Change we identified four primary opportunities to employ Product Lifecycle Management (PLM) in reducing, mitigating, or adapting to climate change from human-generated Greenhouse Gas (GHG) emissions, most importantly CO2. These four areas for using PLM strategies and solutions are in: developing Green Products, generating Green Energy, reducing Carbon Footprints, and adapting to Climate Change.
In this new Part 2 we will begin to examine one of those in more detail; the use of PLM-enabling technologies to collect, calculate, track, report, and most importantly reduce the carbon footprint of products and processes. This capability then enables a full and accurate accounting for the carbon footprint of individual companies, entire industries, and national economies that supply, produce or consume these products or services. It may very well prove to be the most important contribution of PLM by helping to lower emissions and slow climate change for the benefit of future generations to come.
A Digital Twin Example
Since 2010 the concept of a Digital Twin has been promoted as a way to evaluate and monitor the operational performance of physical assets using a virtual digital model. The below example from Akselos illustrates the use of a digital twin model for monitoring and predicting the operational performance of an offshore wind turbine. But digital twin modeling also applies to processes and other intellectual assets, not just manufactured products.
As example, in the process industry the ingredients and formulas associated with a consumer product are already part of the digital twin specification. Manufacturers can roll-up this information and employ the results to define the receipts for production processes, run compliance checks, or print the nutrition composition onto food labels for consumers.
PLM solutions, when deployed correctly, can provide the IT platform and functionality to collect and manage product specifications and associated attributes at every stage of production and distribution. This allows product engineers, marketing managers and supply chain managers to analyze weights, production costs, nutritional values and track component substance volumes to satisfy compliance regulations and meet environmental goals.
Using these same PLM capabilities, a product manager can calculate the carbon impact or footprint of a product and pull this information forward into an earlier stage of the development process. Early design decisions define the cost of a product as well as most of the downstream GHG emissions. In the same way that production costs can be calculated or simulated for different design alternatives, PLM can make it possible to calculate the carbon footprint of a product for different design variations, suppliers, production scenarios, and use cases.
Enterprise software providers — such as Dassault, Oracle, PTC, SAP, and Siemens among others — are beginning to offer these capabilities as part of their PLM, SCM, ERP, EHS, or ESG solution portfolios. Additionally, a new software solution space has emerged in Lifecycle Sustainability Assessment (LCSA) which we consider part of the larger PLM solution ecosystem and which will be examined in a later post.
Calculating Carbon Footprints
To understand the challenges involved, it is necessary to examine how companies are calculating their carbon footprint today. While there are several standards and databases available for use internationally, most companies rely on the Corporate Standard of the GHP Protocol to calculate and report the emission of greenhouse gases. This standard separates emissions into three scopes.
- Scope 1 addresses the emissions from owned sources. For example, the emissions from productions, from heat sources or the company owned truck fleet.
- Scope 2 addresses purchased electricity, steam, heating, and cooling. Basically, all energy a company has to acquire to run the business.
- Scope 3 addresses indirect emissions distinguished into upstream and downstream activities. Upstream covers the supply chain to harvest the ingredients, to acquire the material to create products, and downstream the distribution, usage, and end-of-life treatment.
If companies report their emissions according to GHG Protocol they must report Scope 1 and 2 to meet the protocol standard. However, reporting on Scope 3 is voluntarily, despite it often being the largest contributor to total emissions. The hope was that if most companies reported Scope 1 and 2, the overall results from all upstream suppliers and downstream users would cover Scope 3 emissions of the producing company and double counting would be avoided.
Unfortunately, numerous industries have yet to adapt these or any reporting practices. As a result, only a patchwork of emission reports within most industries are produced, leaving an incomplete accounting of emissions. Small and midsize enterprises are especially struggling to establish reliable emissions tracking and reporting that makes it difficult if not impossible for larger enterprises, who are their customers or partners, to capture Scope 3 emissions along the entire supply chain. This is especially problematic because Scope 3 emissions are often five times the amount of the combined Scope 1 and 2 emissions.
The Challenge of Making PLM Green
PLM strategies and their supporting IT systems are typically focused on a company’s internal processes. Even when a PLM platform is implemented to improve internal communication and collaboration, rarely do these processes span the entire supply or service chain external to the enterprise.
The key challenge in the use of PLM to provide reliable product data to lower carbon footprints will be to collect, monitor, and manage all emissions that span the entire lifecycle. If PLM professionals once thought expanding the adoption of PLM beyond the silos of engineering PDM within the same company was difficult, imagine how much more so will be defining and agreeing to PLM-specified processes, data management workflows, digital threads, and analytics reporting that extend far outside enterprise boundaries.
Even companies that report Scope 1 and 2 only know their emissions at a division, product, or plant level using a top-down approximation. They can define targets and operational actions to reduce emissions, but few know which product creates what percentage of their entire footprint burden. While some companies break their emissions down to the product portfolio or business unit level, there are no standards available to measure or compare such calculations, much less validate or regulate them.
Implementing a PLM strategy to provide carbon footprint data will require breaking the emissions down from a company and plant level to a product and component level. The GHG protocol and ISO also provides standards to calculate the footprint for individual products. The Product Life Cycle Accounting and Reporting Standard (PLC) and ISO 14040 considers the emission of the entire lifecycle, including Scope 3. But the standard itself recommends selecting only a subset of products with the biggest emission impact and not the entire portfolio. The standards calculate the emissions also for an individual defined unit (called: Unit of Analytics) which usually does not match the units used within PLM product data structures.
There are additional challenges to employing PLM in tracking then reducing carbon footprints which we will explore in follow-on posts. Until then, what do you believe the obstacles will be? Leave us a comment below.
The PLM Green Global Alliance was formed to create a volunteer community of professionals who educate, advocate, and collaborate for the role of PLM in addressing climate change and enhancing sustainability in a more circular economy. We are excited to see numerous PLM providers and consultancies announce plans to provide solutions and services for sustainability that will directly address the growing climate crisis and help decarbonize the global economy by 2050.
The availability of such solutions may unleash the next wave of massive investments in PLM as part of executive-driven sustainability initiatives that will dwarf earlier generations of engineering-centric intra-enterprise PLM. And on a personal level, it’s an exciting time that can make all of us proud to tell our families we are working on the most important challenges and opportunities many of us will likely ever experience in our lifetimes.
We will be examining these announcements and solutions in future posts of the PLM Green Alliance LinkedIn group and sharing examples we come across on the PLM Green website. We hope the discussions we incite will be of value to companies and industries — as well as the planet — that seek strategies, technologies, tools and encouragement to manage then reduce their carbon footprint.
In Part 3 of this series on The Role of PLM in Slowing Climate Change we will dive deeper into the use of PLM in developing green energy and include examples submitted to us by solution providers and their industrial customers. To follow our discussion be sure to register to receive our news posts at the sidebar of this page HERE.
Thanks Klaus, great explanation of the GHP scopes. An interesting trend to mention also is the manufacturing companies shift from selling products towards selling experience, meaning they remain the owner of the product during its whole lifecycle. This would enable (and enforce) companies to be more aware of their impact on the environment
Indeed an interesting aspect, especially for products where the production process creates less GHG emissions then the usage of a product, like cars with internal combustion engines. Depending on the defined organizational or operational boundaries, the emission could move into scope 1 and has to be reported.
Thanks @kbrettschneider, I certainly agree that PLM is key in storing and reporting the GHG emissions. I hope that in the future the analytics and AI will support improving decisions (more than just reporting). I actually blogged about it my self with few examples how a system like 3DXPERIENCE can assist in this matter with concrete examples. I think there are two key points to mention a) we need scientific/academic globally agreed standardization rather than localization, b) this is not always going to be an easy thing to determine the foot print in an accurate manner at all times. For example, how do you capture the footprint when dealing with different aspects such as manufacturing impact of a material, consumption impact, recycling, trashing, scrap, etc. That being said anything is better than nothing and I am excited to see what PLM vendors have in plan.