IFC GHG Portfolio Footprinting

Shilpa Patel

Chief, Climate ChangeEnvironment and Social Development Department

14 July 2009

Background and Overview

• The World Bank Group made a public commitment to measure

and report on the GHG impact of its activities

The IFC Management Group endorsed a proposal for implementation

starting February 1, 2009

• IFC GHG footprint information will be used in the first instance

to form a better appreciation of the GHG implications of IFC’s

activities

The information collected may also be reported on an aggregate basis in

the annual report and other relevant WBG publications.

• IFC also intends to use the measurement of its portfolio GHG

emissions as additional analysis that can be used for its internal

decision and business risk analysis

2

Why are we doing this?

The private sector is more and more focused on GHG emissions

and a carbon constrained future

We want to be ready

3

IFC and The World Bank

IFC and The World Bank differ in many ways:

Typology of projects

• Projects are smaller

• Boundaries are easier to define

• Good data is usually available

• Many companies already perform GHG calculations

• Current available methodologies for project based

approaches

IFC private sector approach is not adequate for World

Bank projects

4

The Carbon Emissions Estimator Tool (CEET)

• The IFC Climate Change Team developed the CEET to

support investment departments

• Based on the Agence Française de Développement’s

(AFD) carbon tool

• Uses IPCC and GHG Protocol emission factors and

calculations

• Modified by IFC to reflect GHG Protocol definitions and

IFC sectoral needs

• Implemented since February 1, 2009

Required for any real sector project with approved PDSER

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Scopes and Boundaries

• WBCSD/WRI GHG Protocol: A Corporate Accounting

and Reporting Standard

• Scopes Scope 1: Direct

Scope 2: Indirect (purchased power, steam,…)

Scope 3: can be estimated but are not required

• Boundaries Real sector

“Use of funds”

6

Status Report

• Currently collecting GHG emissions data for all real sector

projects approved since 1 February 2009

Analysis is forward moving, no backfill

• Over the next few years, baseline GHG portfolio emissions will be

established

• Also developing methodologies to evaluate GHG emissions for

complex projects:

Financial intermediaries

Corporate loans with an unspecified use of funds

• Other IFC sectors are developing their own tools

IFC forestry tool developed in collaboration with National

Council for Air and Stream Improvement, Inc. (NSCASI)

General Manufacturing and Services (GMS) built GHG

calculation tools for glass and cement industries

7

8

Lessons Learned

Most feedback is positive

GHG data required for calculations available in project

documentation, then complemented as necessary during

appraisal

Best to keep accounting separate from analysis

GHG Portfolio Footprinting is not too

complex nor is it unnecessary

All GHG analysis is a work in progress,

the more we learn the better our method

Getting

started was

the

greatest

challenge!

9

Some Reported Problems

Most common concerns have been:

Makes some clients uncomfortable

Excessive for small projects

Not applicable to all investments

Does not capture net carbon impacts of a project

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GHG Portfolio Measurement Benefits

Standardization of internal GHG calculations

Capacity building,

Investment teams learning carbon accounting and

common sectoral emission sources

Better overall understanding of IFC projects, leading to:

Potential carbon credit opportunities

Identification low-cost mitigation opportunities

Identification of energy efficiency opportunities

In the long run, a greener portfolio

11

Other Benefits

In addition to portfolio footprinting:

Cleaner Production team use the CEET project evaluations

EE projects use the CEET to measure the impacts comparing

various project scenarios

Regional use for strategies and reports

The Carbon Finance team uses CEET as a reference tool

Internal shadow cost analysis

Other MDBs and banks have asked us to share the CEET

with them

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Thank you!