In 2021, we created our first in-house greenhouse gas (GHG) inventory and developed the foundations for company-wide GHG data reporting. With our 2021 GHG emissions baseline established, we focused our efforts in 2022 on identifying areas for carbon reduction and developing emissions reduction strategies in our Operations and Distribution departments.
During this developmental year in which we didn’t have new emissions reduction projects, we measured a 5% decrease in total emissions in 2022 from our 2021 baseline. Based on a review of our 2021 and 2022 GHG Inventories, we found that the main contributing factor was a reduction in our Scope 3 emissions which account for the largest proportion of our overall emissions. Scope 1-3 emissions are presented below in metric tons of carbon dioxide equivalents (MTCO2e).
Scope 1: 3,680 MTCO2e / 12% | (+22% vs. 2021)
Direct Emissions occurring from sources owned or controlled by Guayakí, including fuel for fleets and facilities' natural gas, and stationary combustion of biomass.
Scope 2: 380 MTCO2e / 1% | (-10% vs. 2021)
Indirect Emissions from electricity for Guayakí owned or controlled facilities and EV fleet.
Scope 3: 28,050 MTCO2e / 87% | (-8% vs. 2021)
Indirect Emissions from sources not owned or controlled by Guayakí, including ingredients, packaging, purchased goods & services, facilities waste, co-packaging energy and waste, transportation, leased storage, owned coolers in retail, employee commuting, business travel, and use and disposal of products.
Total Emissions: 32,110 MTCO2e | (-5% vs. 2021)
The decrease in Guayakí’s Scope 3 emissions was unexpected because indirect emissions sources account for the majority of Guayakí ’s emissions – typical with food and beverage products due to the proportion of emissions from upstream raw material and ingredient supply chains – and are the most difficult to reduce. As Guayakí grows, our footprint will expand, but long-term partnerships and projects with our suppliers to implement more regenerative agriculture practices, for example, may reduce the emissions intensity of those ingredients through soil carbon capture. Since Scope 1 and 2 emissions come from sources directly owned or controlled by Guayakí, such as Guayakí facilities and vehicles, these emissions are generally easier to reduce, but they account for a much smaller portion of our total emissions at just 12%. Our Scope 1 emissions increased in 2022 largely due to increased gas consumption due to changes to our self-distribution vehicle fleet (see the “Transportation Efficiencies” section below).
While most of our Scope 3 emissions increased as forecasted, our emissions from upstream and downstream transportation and distribution decreased by about 3,000 MTCO2e, a 27% reduction from 2021. This was caused by a shift in Guayakí’s distribution model. As we consolidated our distribution footprint in 2022, improved route efficiency, vehicle tracking, and idle times, and right-sized distributions, our fuel consumption decreased. Transportation and distribution accounted for 33% of Guayakí’s total emissions in 2021 and decreased to 25% of our total emissions in 2022.
Another source of reductions is our improved methodologies for measuring emissions. When the first version of Guayakí’s GHG Inventory was developed in 2021, our focus was on capturing the full breadth of Guayakí’s business operations – usually at a high level. In 2022, we refined our data reporting systems to capture data at a more granular level and started implementing a third-party carbon management and disclosure software called Persefoni. These small, but meaningful, refinements in our GHG Inventory likely corrected some overestimations in 2021.
We are committed to developing GHG reduction targets aligned with the Science Based Targets Initiative (SBTi) by the end of 2023.
In 2022, Guayakí facilities – including 28 distribution warehouses, three offices in the US, as well as a processing facility and two offices in South America – were collectively powered by 41% renewable energy. This percentage includes renewable energy sourced from clean energy programs and the electrical grids in the United States, Brazil, Argentina, and Paraguay. Guayakí’s warehouse in Petaluma, California continued to source 100% renewable energy through its local utility provider. Our office in Sebastopol, California has a 60 kW solar array that supplied 93 MWh of renewable energy in 2022.
Guayakí’s processing plant in Turvo, Brazil had solar panels installed, providing at least 150 MWh/year and covering all current and future operational energy needs. Surplus energy is directed to the local energy company as payback and contributes to a cleaner energy matrix in the region.
Our research and development and quality control laboratory in Sebastopol, California received the My Green Lab Platinum Certification in June 2022. My Green Lab Certification is considered the gold standard for laboratory sustainability best practices around the world and is a proven, scalable program that helps organizations achieve their sustainability goals. It offers tried-and-true methods rooted in science to dramatically reduce the environmental impact of laboratories without disrupting the critical work underway and is recognized by the United Nations Race to Zero campaign as a key measure of progress towards a zero-carbon future. The certification was an opportunity for our lab to assess our equipment, products, and practices, diving deeper into 11 topics from our infrastructure energy usage to our recycling and waste reduction programs and making improvements.
In 2022, we registered as a SmartWay Shipper, a US Environmental Protection Agency (EPA) program to improve logistics efficiencies and environmental impacts – mainly from GHG emissions. We registered as Wave 2 and have a goal to reach Wave 3 in 2023. Wave 2 shippers are required to report the names of each transportation provider used, and the responsibility lies with the transportation provider to report their emissions and maintain in good standing with EPA SmartWay. For Wave 3 shippers, the responsibility lies with the shipper to report emissions, track progress, and set goals on saving emissions moving forward. In Q4 2022, we made a pledge that we would only partner with like-minded EPA SmartWay registered transportation providers effective January 1, 2023. To maintain a lasting relationship with three of our non-EPA SmartWay registered carriers, we are proud to share that they were willing to adopt our ways of working, and as a result, have also registered with EPA SmartWay pledging to maintain in good standing and continue improved logistic environmental impacts.
As part of our commitment to reducing our GHG footprint, in 2017, we set an ambitious goal to electrify our entire self-distribution fleet, The Yerba Mate Co. At its peak, 68% of our company-owned vehicles were electric and we operated the largest commercial fleet of all-electric Chevy Bolts. Over the years we have encountered several challenges and learned important lessons to achieving this goal, including a manufacturer’s recall for Chevy Bolts, the need to retrofit the vehicles to serve our delivery needs, the lack of charging infrastructure in certain parts of the country, the negative environmental and social impacts of lithium battery production and disposal, and more. In addition, as our business has evolved, we are partnering with more third-party distributors in combination with our own distribution business. After reviewing these challenges, our overall emissions footprint, and where we can make the most direct emissions reductions in the short-term, we have decided to focus on other emissions reductions opportunities, including collaborating with our third-party distributors and suppliers who represent the bigger portion of our emissions (categorized as Scope 3). As we stated last year, our long-term objective remains to build a zero-emissions fleet and we will continue to pursue partnerships in the rapidly evolving EV market, while waiting for vehicle technology and infrastructure to evolve to meet beverage company distribution needs. For example, as of today, there aren’t any all-electric vehicle options that can handle our payload capacity requirements; however, we are currently working closely under an NDA with a manufacturer to accelerate that capability and hope to provide more updates in the near future.