Approaches Toward Carbon Neutral Enterprises:

Observed Trends and Horizon in the USA

15 April 2015, SITRA, Helsinki

Gregory A. Norris

Co-Director, SHINE, Harvard T.H. Chan School of Public Health

Chief Scientist, International Living Future Institute

Outline

• Frames for Carbon Neutrality

• The rise and fall of Offsets

• The new rise of Carbon Neutrality

• Beyond Neutral: Positive Changes Everything

• The Need for Standards

What is a Footprint? All the negative impacts of all the processes

needed to sustain or produce something.

Products have them

Services too

People

Organizations

Flickr: Huff

Based on several definitions for carbon neutrality, it refers to conditions in which the net greenhouse gas emissions of a unit (often organization orproduct) to the atmosphere equal zero.

Definition for carbon neutrality

Carbon neutrality can be achieved through a transparent process of:

1. Measuring and calculating GHG emissions, i.e. carbon footprint

2. Reducing emissions as much as possible

3. Offsetting the remaining emissions

(DECC/Defra 2009) 5

Guidance to carbon neutrality

6

Several standards, guidelines and programmes exist to help organizations to calculate their footprint, becomecarbon neutral and substantiate their claim.

Document Level and focus Scope and type

GHG Protocol(WBCSD/WRI)

Organizations; to measure, manage, and report greenhouse gas emissions.

International standard

ISO 14064-1 Organizations; to specify principles and requirement for quantification and reporting of greenhouse gas (GHG) emissions and removals. It includes requirements for the design, development, management, reporting and verification of an organization's GHG inventory.

International standard

PAS 2050 (BritishStandard Institution)

Products and services; to specify requirements for the assessment of the life cycle GHG emissions (builds on existing life cycle assessment methods established through BS EN ISO 14040 and BS EN ISO 14044).

UK / International guidelines

PAS 2060:2014 Carbonneutrality

Organizations; Specification for the demonstration of carbon neutrality

UK standard / international specification

Defra/DECC Organizations; how to measure and report corporate greenhousegas emissions

UK guidance

National carbon offset standard

Business operations, products, events; Guidance on genuine voluntary offsets and its minimum requirements for calculating, auditing and offsetting a carbon footprint to achieve carbon neutrality.

Australia / voluntary program / standard

In addition to ISO-standards and national standards and programmes (examples above), a wide range of privatecompanies have launced their own certificates and evaluation process for carbon neutrality, which is often basedon the guidance given in GHG Protocol and/or ISO 14001 standards for footprint calculation. These privatecompanies calculate the footprint for the organization, suggest emission reductions and take care of the offsettingto verified projects.

”The Standard for Carbon Neutrality” PAS 2060 describes carbon neutrality as a process including:

How to achieve carbon neutrality?

7

Calculating carbon footprint according to ISO 14064-1 or GHG corporate protocol.

The organization must develop a carbon management plan that includes a public commitment to carbon neutrality, outlines a time scale, specific targets for reductions, the planned means of achieving reductions and how residual emissions will be offset. The reductions should be either in the total amount of carbon emitted (in absolute terms) or a reduction in carbon intensity (in relative terms), for example carbon emissions per unit output or per € of turnover. If in relative terms, the reduction must be greater than the economic growth rate for the region in which the entity operates.

MEASUREMENT

REDUCTION

By high quality, certified carbon credits (Clean Development Mechanism, Joint Implementation or Voluntary Carbon Standard) verified by third party.

OFFSETTING RESIDUAL EMISSIONS

Disclosure of all the documentation including evidence of emission reductions and retirered offsets. The standard accepts self validation, other party validation and third party independent validation.

DOCUMENTATION AND VERIFICATION

How did we get here?

• First Carbon Offset Project: Applied Energy Services (USA), 1989

• Future Forests created, 1996– Rolling Stones offset 2003 tour

• GHG Protocol (WRI/WBCSD) Corp. Std. 2001

• 2003-5, Tree-planting offset backlash mounts– Carbon Trade Watch, 2007: “The C Neutral Myth”

• DEFRA (UK) PAS 2050 (v1) 2008; 2011

• EcoDesk: “C-Neutral Banks aren’t greener” 2011

Elements of the Offset Backlash

• Analogy to “indulgences”– Related to lack of compelling reduction targets as step

2 in the 3-step process

• Tree-planting project effectiveness research• Indigenous land rights issues• Assessing “Additionality” – that the project would

not have happened without the $• Personal neutrality misses collective action

problems, “promotes status quo”• Projects remote from offsetter

By 2014…

But Low-Carbonality hadn’t plummetted,just the demand for GHG offsets

Low-Carbon Leadership Examples

• Microsoft– 2012: began charging Internal Carbon fee– December 2013: Publishes Carbon Fee Guide– By 2014: 285 MW wind

• December 2014: CDP report outlines 29 companies with internal Carbon Fee systems

• 2014: More Google wind added, totaling 1 GW• September 2014: 15 companies co-launch “RE 100” with

goal of 100 large companies 100% renewable by 2020• 2015: Amazon 150-MW wind• 2015: Walmart up to 100 MW rooftop solar• November 2015: Apple adds 130 MW solar

How did we get here?

• Data for consumer products in US,broken into 253 separate categories,cradle-through use results

• Alert: this could shape a push to go beyond(albeit wonderful) Scope 1&2 Renewable

Outline

• Frames for Carbon Neutrality

• The rise and fall of Offsets

• The new rise of Carbon Neutrality

• Beyond Neutral: Positive Changes Everything

• The Need for Standards

Summary of Business Value from (narrow scope) Carbon Neutrality via combination of

lower footprint and sourcing renewables

• Profitability (lower cost electricity now)

• Lower cost risks

– Conventional fuel price escalation

– Carbon tax

• Lower cost of capital

• Brand value, customer loyalty

• Attract and retain talent

• License to operate

Narrow Scope Carbon Neutrality

• Doesn’t change what you make, but How You Make It.

• Is inspirational now, and needed now.

• Can be propagated to energy hotspots in supply chain, via savings sharing, to begin to address Scope 3.

• Brings co-benefits to some other sustainability endpoints (e.g., health & biodiversity)

Expanding Scope, and Going Beyond Neutral:Broad-Spectrum NetPositive

• Once you’ve made your own operations as low-GHG-emitting you can make them,then what?

– What about the GHG impacts of your supply chain?

– What about the other dimensions of sustainability?

Sustainability has been all

about shrinking your footprint;

then buying (dubious) offsets

for the remainder.Flickr: chuddlesworth

ENERGY WATER

CLIMATEMATERIAL

HEALTH

Every Product Still Has (Many) Footprints

B. Monginoux / Landscape-Photo.net (cc by-nc-nd) Flickr: Carvalho;Lourenco

The planet would be better off without me?

Becoming Positive…We can’t shrink our way to Positive.

To become healers,

We Must Give More than we Take.

What do you Take?

Person: What is required to sustain you.

Organization: What is required to enable you to offer what you offer to the world.

Product: What is required to offer it to the world.

What do you Give?

If We Want to be NetPostive,

We’ve Got To Learn To Give.

What is a Handprint?Handprints are positive impacts we

cause to happen in the world.

They are ways we make tomorrow

better than today.

A handprint of a product is the

sum total of positive impacts we

create.

A footprint of a product is the

sum total of negative impacts

caused by the process

necessary to produce the

product.

Handprints were defined in direct relation to Footprints,

so that Handprint > Footprint NetPositive

Built on LCA using the same metrics as

Footprints

Same Impact Dimensions: Supply Chains

and Life Cycles

Footprinting: Shared Responsibility

Handprinting: Shared Credit

3 ways to create Handprints

Step 1: Reduce your own footprint:

* Reformulate/redesign your good or service

* Switch suppliers, or promote innovation in your supply chain

* Green your own production operations

Your footprint

Humanity's

Footprint

Don't constrain the good you can do

by the harm you're now causing.

Step 2: Help anyone/everyone

else reduce their footprint * Make your product more efficient for others to use

* Engage/inform/inspire users to use more wisely

* Share innovations or research

* Grow demand for NetPositive goods and services

Step 3: Think outside the foot!Take generative actions:

* Plant a tree

* Protect or restore habitat or other ecosystems

* Promote healing, health, and human development

Leaders share these impacts of “Sustainable Product Portfolios”:

Alignment of Business goals and Sustainability Mission

Innovation Spillover

Higher Profitability

SKF, Siemens, Akzo Nobel, Ernst & Young,

WWF, WRI, and over 100 participants:

“We need Credible Standardized Methods”

Innovating for NetPositive ImpactJune 4-5, 2015

Harvard Campus, Cambridge MA

Comprehensive Footprinting AddressesFull Supply Chain and (in some cases)

Life Cycles of Goods and Services

-

+

Ops

Supply Chain

Use

Post-use

Environmental Social

EnvironmentalResponsibilityOpportunities

SHINE Framework Adds Positive, and Expands Human Pathways

-

+

HumanResponsibilityOpportunities

PositiveEnvironmentalOpportunities

PositiveHuman

Opportunities

Positive Human Opportunities

ResponsibilityOpportunities

Positive EnvironmentalOpportunities

Human Responsibility Opportunities

Injury/Illness

Well-Being

-

+Health

PromotionWork-Life

Experiences

SHINE Framework Adds Positive, and Expands Human Pathways