Agriculture Supply Chain

June 30th, 2023 – New York, NY – In an effort to drive mitigation and decarbonization, Sumitomo Corporation of Americas, Bayer, JBS, AMAGGI, Rumo, and SINAI Technologies announced today the initial results of their first-of-its-kind collaboration to collect, allocate, and share primary emissions data across global supply chains.These results are the first step in the CarbonPrime initiative, which is now open for other companies and private sector participants to join going forward. www.carbonprime.net

Since 2020, the participating companies have collaborated toward a proof of concept (POC) to connect primary emissions data from seed processing, agricultural operations, feed and food production, trading, logistics and finally distribution from Brazil to global markets. Using SINAI’s platform and with the support of industry life-cycle-assessment experts, these pioneering companies have been able to collect, allocate, and share primary data in a secure and reliable way.

"The initial goal here was to share relevant primary data in a supply chain,” explained Mark Lyra, Senior Director, Sumitomo Corporation of Americas, who conceptualized the CarbonPrime initiative. “Allowing primary emissions data to flow in a supply chain is important because it can provide a solid foundation on which to base investments and other business decisions. CarbonPrime aims to accelerate the deployment of capital in sustainable infrastructure, and data transparency and reliability must be our lynchpin.”

“Enabling supply chain partners to accurately and efficiently allocate and manage emissions is a complex undertaking. To make this initiative possible, a robust software platform that utilizes consistent methods of allocation for the same products throughout the value chain was critical. The initial release of this effort represents a significant milestone, as it provides preliminary results that demonstrate the potential for a new perspective on emissions intensity within a specific pilot value chain,” said Maria Fujihara, Founder & CEO SINAI Technologies. “We are thrilled to take this first step towards achieving more precise and efficient calculations of emissions data, with the ultimate goal of facilitating data sharing across multiple global supply chains."

From its inception, the initiative has enlisted the insight of several third party experts to validate the concept, to assess technical viability, and to ensure the effort can lead to advancements in monetizing carbon going forward. Among these organizations are the Rocky Mountain Institute, IETA, and others.

“Visualizing primary data across supply chains is a very important step in helping companies, investors, and policy makers design effective strategies to keep global warming below +1.5oC”, said Paolo Natali of the RockyMountain Institute. “RMI is advising WBCSD in their Pathfinder initiative and encourages other industry leaders to develop such capabilities.”

Until now, companies have relied on secondary data to estimate emissions within their supply chains. While these estimates have been instrumental in understanding overall corporate emissions, responsibility, and advancing corporate reporting - secondary data is not adequate to inform investment decisions.

“Investing in emission reduction opportunities is just like any other investment. If I’m buying shares in a company, I want to know how that specific company performs. I need to understand that company’s primary data. Secondary data, like sector wide performance and industry history are relevant, but far from adequate to justify investment in a specific stock,” explained Alasdair of the International Emissions Trading Association (IETA).

Enabling Data Sharing to Yield Results

At this first stage, the POC chose to keep the primary data scope down to a relevant and manageable level “We had to resist the temptation to boil the ocean,” said Mark Lyra. “The companies involved already have a deep understating of their own emissions and, given their size, an incredible amount of data was available. On the other hand, because of the disruptive potential of this initiative, the group realized it would be best to balance the scope so that results would not only be relevant, but also verifiable by third parties in a reasonable amount of time.”

As highlighted in the infographic, the results of the POC illustrates how the flow of primary data in the supply chain can differ greatly from even the best estimates generated by secondary data. While estimates based on secondary data have played a pivotal role in corporate reporting and understanding emissions on a global level, only primary data can provide the accuracy and reliability to unlock the investment needed to decarbonize global supply chain operations.

The next phase of the POC contemplates expanding the primary data scope to areas such as seed production, fertilizer production, small and medium farmers, and leather products, among others. In parallel, the group will make results available for audit and publish a white paper with the allocation framework developed.

“We have started discussion with some of the Big Four Accounting firms and aim to have results audited this year,” explained Lyra. “This should be fairly straight forward because one of the key principles of this effort was not to reinvent the wheel. The team followed WBCSD Pathfinder framework and industry standards such as GHG Protocol emission factors and allocation principles. The key innovation was to allow industry experts to access primary data and develop a sector specific framework for the application of these standards. This framework will be open source and is likely to evolve over time.”

Conducting the POC in partnership with SINAI was one of the key success factors in this effort. Not surprisingly, companies hesitate when it comes to sharing primary data. After all, emissions are many times calculated based on sensitive operational data such as costs and technology used. SINAI’s platform not only enabled data to be captured and managed at a very granular level, but also provided secure access to third parties so privacy could be ensured throughout the process.

SINAI believes the carbon intensity of a product should be determined by a constant flow of primary data, not astatic snapshot in time. The same can be said for the impact of decarbonization investments. For example, the emission reduction resulting from the deployment of solar panels at a meat packing plant in Europe is different from installing the same panels at a similar plant in Brazil.

Laying the Groundwork for a new Carbon Asset

Beyond helping to identify decarbonization opportunities within supply chains, the group also believes sharing relevant primary data may allow the pooling of resources and the monetization of new Carbon Assets. “Now that we have a baseline, we can also start sharing primary data on mitigation opportunities across the supply chain”, explained Lyra. “This could be a game changer for the use of carbon credits, infrastructure investment, and development of digital carbon assets.”

In fact, Mr. Lyra has been in step with the Climate Warehouse project at the World Bank (https://www.theclimatewarehouse.org/) from the beginning. Last November, IETA, the World Bank and the Government of Singapore announced the launch of Climate Action Data Trust (CAD Trust) which is the first part of the Climate Warehouse digital ecosystem to go live. According to Mr. Lyra, the expectation is that this infrastructure could serve as a gateway for the private sector to lead supply chain decarbonization efforts based on audited primary data flows. “When it comes to the low carbon economy, the rules of the game are not set, there are many uncertainties” he explained. “Nevertheless, forward thinking corporations are finding ways to take action and deploy capital based on science, transparency, and reputation. CarbonPrime participants seethe need to be proactive in leveraging today’s technology to build the foundations for a positive and equitable transition.”