The Hong Kong and China Gas Company (Towngas) is expanding the application of the S-Carbon platform in supply chain management to drive more suppliers to understand and report on greenhouse gas (GHG) emissions, and further improve the integrated reporting process of digital GHG emissions data in the supply chain.
In order to do so, the utility company is deepening cooperation with SGS and Microsoft Hong Kong.
SGS has developed the S-Carbon digital carbon management platform on Microsoft Azure. The platform is based on GHG emissions accounting and verification solutions, and a greenhouse gases emissions data management system, adopting an internationally-recognised method to quantify and present carbon emission performance.
The platform identifies the most suitable area, reference data, and methods when calculating enterprise carbon emissions. With S-Carbon, companies can more easily manage and track their established carbon emission reduction goal, as well as the carbon performance of business partners.
Blazing the trail
Towngas is the first public utility in Asia to implement the S-Carbon for supply chain management purposes, having started a trial run of the system in early this year. The S-Carbon was developed by the SGS team and its technical experts will assist in determining the content and scope of the report to facilitate data collection, quantification and reporting of Towngas’ scope 3 GHG emissions. The system is operated on Microsoft Azure backed by enterprise-graded security. Data storage and analytics embedded in the cloud enables Towngas to establish a rapid data base, access a variety of data sets as needed for management purposes and compile reports on GHG emissions.
“We are delighted that Towngas is the first public utility to use S-Carbon, which not only improves the entire supply chain management of Towngas, but also fulfils their commitment to sustainable development and contributes to the future,” said Billy Lai, deputy director of Knowledge Solutions of SGS Hong Kong.
Towngas targets suppliers in Greater China and Japan in the first phase of the S-Carbon platform trial, including suppliers of underground pipes, pipe fittings and gas appliances among others for the company’s Hong Kong operations, accounting for around 20% of the purchase value in the “Raw Materials and Products” category.
With the signing of the agreement on deepening cooperation, the purchasing value covered will be further increased to approximately 90% of the category.
“We are committed to optimizing its supply chain management. In 2019, Towngas launched an e-Tendering system to replace cumbersome processes such as registration, price enquiry and tendering on an electronic platform, improving business efficiency and reducing paper consumption,” said Felix Lee, Head of Corporate Supplies and Administration at Towngas.
He added: “Nowadays, we use the S-Carbon to collect data centrally and then analyse it on the platform interface to achieve more accurate, stable and systematic supply chain management, enhance efficiency in tracking progress and help us to evaluate supplier performance more comprehensively.”
This will not only help Towngas to facilitate the data collection on GHG (scope 3) and improve its overall ESG performance, but also encourage suppliers to address to ESG issues such as climate change and carbon emissions reduction, steering the industry chain towards sustainable development.
Helping sustainable development in Hong Kong
The capital markets are increasingly concerned about the ESG aspects of listed companies. Supply chain management performance and related disclosure requirements are also receiving increasing attention.
Through the S-Carbon digital management platform, Towngas is able to collect carbon dioxide equivalent data on GHG emissions from suppliers.
Lee said: “The trend of the industry is to include the carbon emissions of different stakeholders in the corporate value chain, from upstream suppliers to downstream customers, in the assessment of corporate ESG performance. We hope that through the use of this platform, we can play a leading role in encouraging suppliers to join us in our efforts to reduce GHG emissions.”
Towngas was the first public utility in Hong Kong to complete the ISO 20400 Sustainable Procurement Assessment. By 2021, over 80% and 70% of Towngas’ suppliers (based on the total purchase value of products and materials) have been ISO 14001 and ISO 45001 certified respectively, demonstrating the Company’s continued drive for responsible supply chain management.
Cally Chan, general manager of Microsoft Hong Kong and Macau said: “For decades, Microsoft has been committed to driving and empowering companies to reinforce sustainability efforts. We are glad to partner with Towngas and SGS to co-support sustainability development by leveraging Microsoft’s scalable, secure and reliable cloud solution, Microsoft Azure, to bolster S-Carbon solution and enhance Towngas’ capability in managing greenhouse gas emissions. We hope to see more local enterprises develop solutions that enhance sustainable development for Hong Kong.”
