Case Study | Large Retailer Decarbonizes Supply Chain Operations

Introduction

A Fortune 100 company with aggressive emissions reduction targets sought a solution to decarbonize its complex supply chain operations efficiently and cost-effectively. The company’s vast distribution network footprint includes logistics, e-commerce, and retail support.

Challenge

As a leader in global retail, the subject company actively seeks opportunities to improve its ESG (environmental, social, and corporate governance) performance, reduce its emissions profile, further cultivate its thought leadership, and engage in activities that have measurable outcomes in accordance with its greenhouse gas (GHG) reduction strategy.

To support ongoing sustainability initiatives, the company wished to pursue participation in low carbon fuel crediting programs where resulting revenues could be used to offset the expenses of renewable fuel procurement and fund other decarbonization efforts. The company also needed a way to de-risk potential compliance exposure and relieve the administrative burdens associated with crediting programs.

With such a large footprint, the company required a partner who could operate at scale from the outset. The company selected Element Markets for the project based on our cross-functional ability and our track record of value creation.

Solution

Taking into account the client’s complex operational demands and the need for 100% uptime and cost offsetting, Element Markets developed a solution which powered the client’s California-based electric vehicle fleet with 100% renewable electricity at no out-of-pocket cost. This was accomplished by leveraging California’s Low Carbon Fuel Standard (LCFS) to capture environmental credit revenues in support of ongoing companywide decarbonization efforts.

To achieve this, Element Markets:

• Performed an assessment of all equipment in operation throughout the client’s logistics and distribution center value chains
• Managed the procurement of renewable electricity, ensuring that there were no disruptions to facility operations or increased costs associated with the renewable electricity
• Created an innovative structure which provided the client with an annual revenue guarantee designed to provide reliable program revenues to fund ongoing initiatives
• Provided end-to-end compliance program management, ensuring that the client administrative burden was minimized

Results

As a result of its partnership with Element Markets, this client is on track to earn over $3 million in annual revenue from various environmental crediting programs. Additionally, Element Markets has identified multiple latent environmental crediting opportunities within the client’s operations, and is actively working across multiple verticals to drive revenue creation through decarbonization.  Element Markets’ innovative, collaborative, market-driven approach has helped the client on its path toward achieving ambitious decarbonization goals while creating a sustainable and scalable business model.

To learn more, contact one of our LCFS specialists:

Sydney Akuto, Vice President, Environmental Products | sakuto@elementmarkets.com

Emmett Walsh, Environmental Products Analyst | ewalsh@elementmarkets.com