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Corporate Value Chain (Scope 3) Standard

Cynthia CummisWorld Resources Institute

17 November 2011

GHG Protocol history

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The GHG Protocol has two new standards

1. Corporate Value Chain (Scope 3) Standard

2. Product Life Cycle Standard

Introducing two new standards

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Development of the standards

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International engagement

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Road testing companies

� Abengoa

� Acer

� Airbus

� AkzoNobel

� Amcor

� Autodesk

� Baosteel Group Corporation

� Levi Strauss & Co.

� National Grid

� New Belgium Brewing

� Ocean Spray Cranberries

� PE International

� Pfizer

� Pinchin Environmental Ltd.

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�

� BASF

� Coca-Cola Erfrischungsgetränke AG

� Danisco

� Deutsche Post DHL

� Deutsche Telekom AG

� Ford Motor Company

� IBM

� IKEA

� Italcementi Group

� Kraft Foods

� Pinchin Environmental Ltd.

� PricewaterhouseCoopers Hong Kong

� Public Service Enterprise Group

� SAP

� SC Johnson & Son

� Shanghai Zidan Food Packaging and Printing Co.

� Siemens AG

� Suzano Pulp and Paper

� US General Services Administration

� Veolia Water

� Webcor Builders

Corporate Value Chain (Scope 3) Standard

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Corporate reporting options

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Overview of steps in the Scope 3 Standard

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Business goals

Understand risks and opportunities in the value

chain

Identify GHG reduction opportunities, set

reduction targets, and track performance

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reduction targets, and track performance

Engage value chain partners in GHG

management

Enhance stakeholder information and corporate

reputation through public reporting

Identifying scope 3 emissions

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Setting the boundary

� Companies shall account for

emissions from each scope 3

category

� Companies shall disclose and justify

any exclusionsExample: A company determines that

emissions from capital goods are difficult

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any exclusions

� Companies should follow the

principles of relevance,

completeness, accuracy, consistency

and transparency when deciding

whether to exclude any activities

from the scope 3 inventory

emissions from capital goods are difficult

to calculate and not expected to

contribute significantly to total scope 3

emissions (based on initial estimations).

The company discloses and justifies the

exclusion of capital goods based on limited

data and its insignificant contribution to

total scope 3 emissions.

Collecting data

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� Companies may either use:

� Primary data (from specific activities within a company’s value chain)

� Secondary data (not from specific activities within a company’s value

chain)

Allocating emissions

� “Partitioning GHG emissions

from a single facility or other

system among its various

outputs”

� Needed when:

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� Needed when:

� A single facility produces

multiple outputs, and

� Emissions are measured

for the facility as a whole

Setting a GHG target and tracking emissions over time

� Choosing a base year and determining base

year emissions

� Setting scope 3 reduction targets

� Recalculating base year emissions

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� Recalculating base year emissions

� Accounting for scope 3 emissions and

reductions over time

Reporting emissions (selected requirements)

� Report complete scope 1

and scope 2 emissions

� Report scope 3 emissions

by category

� Be transparent about data

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� Be transparent about data

and methodologies used

� Various optional

information should be

reported when relevant

• IKEA estimated scope 3 emissions from all sold products that consume energy during use

• Products included all types of appliances and lighting sold in 25 countries

IKEA: inform GHG reduction targets

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• Use of sold products accounted for 20% of total scope 1, 2, and 3 emissions

• Expects to achieve annual GHG reductions of several million tons -more than the company’s total scope 1 and 2 emissions

• Focused on achieving a complete Scope 3 inventory to support strategic decision making

• Used industry-average life cycle data

• Found that scope 3 comprise

Kraft Foods: inform GHG reduction strategies

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• Found that scope 3 comprise more than 90% of the company’s emissions and ‘purchased goods and services’ are 70% of scope 3

• Kraft Foods is now focusing on reducing emissions from the agricultural supply chain

• Keep your business objectives in mind

• Refer to the accounting principles for guidance

• Use an incremental approach, depending on available resources

Tips for completing a scope 3 inventory

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depending on available resources

• Use simplified approaches to calculate emissions in the first year and improve data quality over time

• Focus on ‘hot spots’ for data collection and GHG reduction efforts

Available on GHGProtocol.org:

� Scope 3 Standard

� Scope 3 calculation guidance

� List of databases

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� List of databases

� Supplier engagement guidance

� Sample scope 3 reporting template