Assessing the environmental impacts of UK supply chains
Trade is becoming increasingly global. With this, supply chains and their associated impacts on the natural environment are becoming harder to trace. Set against a background of rising global consumption, the need to quantify and understand these impacts is becoming ever-more important.
Governments, businesses and consumers are recognising this growing need to understand and improve the sustainability of their produce, to ensure supply chain resilience and to inform decisions on optimal sourcing patterns that minimise environmental impact.
JNCC's work has involved development of tools and techniques to evaluate how the environmental impacts of trade and consumption can be assessed and mitigated – for example, a dashboard estimating the environmental impacts of consumption and a UK experimental statistic. You can find out more in our two minute introductory video (see below).
Assessing the impacts of a supply chain relies on quantifying and understanding the relationships between three main questions:
- How much of the commodity is being consumed and where was it produced? For example, in the case of a national scale assessment, this may be the total consumption of a given commodity in a given country, and the countries of origin in which the commodity was grown. This can be estimated using techniques such as multi-regional input-output (MRIO) modelling. MRIO models take bilateral trade data and correct to account for re-exportation and embedding within other products (for example when palm oil is imported raw, but exported as part of a chocolate bar).
- What pressures does production a given volume of the commodity cause? For example, the area of land required to grow the commodity, the volume of water consumed in its production or how much fertiliser is introduced to the system. Such environmental pressures are often included within MRIO datasets as environmental extension values. These are calculated using various national statistics and modelling techniques to estimate a value describing the extent of the pressure associated with a specific commodity’s (or sector’s) production within a specific country.
- How do these pressures translate into impacts on the natural environment? For example, how great the loss to ecosystem services and biodiversity will be if a given volume of water is consumed within the production process. This will be location specific; an area already experiencing water stress is likely to feel a much greater impact in this example than an area that is not. Life Cycle Assessment modelling is one suite of tools that can be used to link pressures from commodity production to impacts on the environment. Although often focused on a specific production system, some with a more global focus also exist.
This highly topical area has many potential applications and the possibility to make a real-world difference:
- Governments and policy makers could use such information as an indicator, to model potential future effects of a proposed policy or to inform trade deals
- Businesses could use such information to ensure supply chain resilience and to demonstrate green credentials to their customers
- End-point consumers could improve their understanding of how to reduce environmental impacts through their own consumption patterns
JNCC has a long history of work within this area, through a number of projects, including:
Indicator development (2018 to 2025)
Work was carried out in collaboration with Route2 (2018-19) and the Stockholm Environment Institute (2020-21) on the development of an indicator of the global environmental impacts of UK consumption. Outputs from proof of concept studies exploring two potential approaches (of which one was recommended to be taken forward) can be found on the Defra Science and Research Projects portal. In October 2021, a new UK experimental statistic was released based off this work, alongside an associated globally relevant dashboard allowing for visualisation and breakdown of results by producing country and by commodity associated with the impact. Impact types assessed include tropical deforestation, biodiversity loss and scarcity-weighted water loss. This indicator will be updated annually – the first annual update took place in October 2022. Development work to further improve the indicator, for example adding subnational data and more commodities, is planned to continue until 2025.
An entry-level guide to the area of sustainable production and consumption was produced, based on knowledge acquired from a review of over 250 initiatives aiming to link consumption to environmental impact.
In March/April 2020, a time-limited study was undertaken scoping out whether reliable figures are available on the percentage of global GHG emissions that would be reduced per year if the UK, Europe or the world shifted towards consumption of palm oil, beef and soy that did not lead to conversion of natural habitats during production.
Assessing physical trade flows of materials of biological origin to and from Scotland (JNCC Report No. 533, October 2014)
In 2014, a joint study involving the JNCC and SNH (Scottish Natural Heritage) investigated this further, within the narrower context of Scottish consumption. It used extended multi-regional input-output modelling to map global supply chains and estimate localised environmental pressures associated with Scottish biomass consumption of a short-list of commodities. This was the first biomass Material Flow Account (MFA) for Scottish biomass, production, imports and exports.
The global land use impact of the United Kingdom’s biomass consumption Part I: Biomass flows through the UK economy – an overview of biomass sources and overseas land requirements (JNCC Report No. 452, May 2011)
A JNCC study in 2011 investigated biomass flows through the UK economy and the impact this had on overseas land. It looked into material flows through the UK economy and compared biomass produced within the UK with biomass imported to the UK. The report concluded that approximately 14 million hectares of overseas land was required to produce the 52 million tonnes of biomass imported in 2008.
In 2008-9, JNCC reviewed UK Foreign Direct Investment (FDI) into selected countries with the objective of linking monetary flows to potential ecosystem impacts.
The Global Biodiversity Database project was JNCC’s first piece of work on sustainable global supply chains, undertaken in 2006 and 2007 by Scott Wilson. The aim of this project was to develop a method to link biodiversity ecoregions to cultivated areas of commodity production (of commodities that are consumed by the UK) and to monetary input from 'UK plc'. This included several case studies, which applied the method to specific key commodities and regions (Brazil and Soya; Brazil and Lumber; Columbia and Palm Oil; India and Cotton; India and Shrimps; Indonesia, Malaysia and Palm Oil; Russia and Lumber; and South Africa and Wine).