Sustainable Development is fully embedded in Air Liquide's strategy and in its investment decisions. Scope 3 emissions, also referred to as value chain emissions, often represent the majority of an organization's total GHG emissions. Companies can look to platforms that facilitate the data collection and engagement, such as CDPs supply chain program. Scope 3 emission sources include emissions both upstream and downstream of the organization's activities. This usually means all of the emissions a company is responsible for outside of its own operationsfrom the goods it purchases to the disposal of the products it sells. The SBTi has acknowledged that the new Standard's long-term increase in scope 3 ambition is likely to challenge companies, and they plan to release a Supplier Engagement Toolkit along with targeted support for scope 3 approaches in late 2021. Resources such as the Sustainable Apparel Coalitions Higg Index provide similar tools to assess supplier performance, albeit with an industry focus. Scope 3 category 1: purchased goods and services. g ? Provides a centralized "hub" for scope 3 engagement resources and communications. Based on some conversations with the procurement teams at some of our multi-national partners, and prospective partners, there has always been a nervousness about being able to commit to this and see it through. The Group has set investment portfolio targets for all classes required under the SBTi Financial Institution guidance. Companies may set one or more of these types of targets to cover at least 2/3 of their scope 3 emissions. In order to keep global temperature increase to well-below 2C and meet the goals laid out in the Paris Agreement, everyone needs to take bold action to reduce their share of emissions and do so as soon as possible. Of the companies who do make reference to their category 1 emissions, 45% of them include at least some supplier engagement component. Services sector was conducted to identify a) the proportion of responders in a sector selecting a Scope 3 category as "Relevant, calculated", and b) the magnitude of each Scope 3 category relative to both total Scope 3 emissions and total Scope 1+2+3 emissions (as reported in C6.1, C6.3, C6.5, and C-FS14.1a for the Financial Services sector). This category covers the following fuel- and energy-related activities: Indian company Wipro faces a unique challenge with its electricity footprint - discover how the company is reaching its target of 100% renewable energy by 2030.
Thank you for your interest inthe Greenhouse Gas Protocol and SBTi Forest, Land and Agriculture webinar. Another method is absolute contraction. H This increased understanding can benefit the companies themselves, as well as their suppliers, customers, and other value chain partners. 11 0 obj
You can view the SBTi's Net-Zero Standard full reporting boundary here. H cXa?D 8h &!0n A1? For example, assume your organization produces electronic equipment. A hypothesis for why use of products sold is so far below what we might expect looking at CDP's data, is that it is still very difficult to get internal buy-in/sign off for what might be need to fundamentally change products, where as dealing with the supply chain feels internally more realistic. Contact Vincent Hoen from Navigant at [emailprotected] for further details. For categories for which there may be substantial complexity in data collection (e.g., Category 1 Purchased Goods and Services), we recommend simplifying the data collection process by selecting the top five, ten or twenty categories by expenditure, as a first step with a potential to expand . The criteria require emissions in the abatement boundary for net zero targets (Scopes 1, 2, and 3) to be reduced by an amount consistent with reaching global net zero in 1.5C-aligned scenarios. [d Xd i8 HfZY )Y 9 1 H: Under this method, the rate at which global emissions need to be reduced to stay within 2C is uniformly applied to all companies. <>
This project sets out to develop standardized methods and best practices for emissions accounting, with a focus on critical Scope 3 categories for the chemical industry. In some cases information may be required from multiple sources to completely account for these emissions. According to the GHG Corporate Protocol, all organizations should quantify scope 1 and 2 emissions when reporting and disclosing GHG emissions, while scope 3 emissions quantification is not required. p+ ( '>y D XP endobj
Technical Guidance for Calculating Scope 3 Emissions [136] 15 Category 15: Investments TCategory description his category includes scope 3 emissions associated with the reporting company's investments in the reporting year, not already included in scope 1 or scope 2. Building internal support for science -based targets 47 Within direct, the boundary incorporates the allocated GHG emissions of our Tier 1 and Tier 2 manufacturing, component, and warehouse suppliers. Targets are considered ambitious when the emission reduction . In the exhibit below, we can see that the total Scope 3 average intensity . Companies have so far focused on measuring . The most ambitious scope 3 targets are set using a science-based targets setting method. Nine percent of the companies have no scope 3 component in their approved target statement. They are less susceptible to unforeseen disruption and climate risk. Corporations are increasingly claiming that their goods and services reduce emissions. EPA currently provides certain scope 3 emission factors. Why should an organisation measure its Scope 3 emissions? f&@\ Science-based target setting is fast developing as a business norm, but until then leading companies setting ambitious goals reap the benefits of engaging with and managing their supply chain. endobj
Proportionally, when looking at what specific scope 3 categories are referenced in SBTI approved targets, the use of products sold (category 11) is lagging far behind what CDP's estimates. "My first tip for putting Scope 3 on your company's agenda is to link it to how you do business, and the purpose of your company. Now a good number of companies have had their targets approved by the SBTI (480+), I have done a quick review the public targets statements. e0 Category 1 is the biggest single category specifically referenced in SBTI approved targets, with just over 30% of target statements including it either by name, or with a reference to supply chains. Exhibit 4: Projected emissions reductions of European companies part of the SBTi Scope 1 and 2 emissions of companies with SBTs, MN tonnes CO2e, current year. Secure .gov websites use HTTPS Analyzing S&P 500 in 2014, CDP found that corporations that actively manage and plan for climate change secure an 18% higher return on investment (ROI) than companies that dont and a 67% higher ROI than companies who refuse to disclose their emissions. Over 1,200 companies worldwide are leading the transition to a net-zero economy by setting emissions reduction targets grounded in climate science through the SBTi. If you're interested in Science Based Targets, and potentially even in the process of setting your own, this might be of use. a ? Vicky Murray, Sustainability Manager, Pukka Herbs. The sample sizes are very different, but we might have expected those two peaks in purchased goods & services (category 1) and use of products sold (category 11) to be visible even in the limited dataset. Minor corrections to the Scope 3 Standard are recorded below. Displays benchmarking and other data insights that can drive action. For example, a company may use the aluminum pathway to set targets for its purchased aluminum or the commercial buildings pathway for its leased assets. These can include use of products, business travel, transportation, and distribution. The SBTi's Target Validation Team determined Lam's scope 1 and 2 target ambition is in line with a 1.5C trajectory, currently the most ambitious designation available through the SBTi process, where a team of experts review submissions and validate targets against science-based criteria.. Category 3 - Fuel- and energy-related activities Category 5 - Waste generated in operations Category 6 - Business travel Category 3 can be very broad depending on an organization's operations. Scope 3 screening: c ompanies must complete a scope 3 inventory covering all 15 scope 3 categories to understand which emissions categories are . For more information contact [emailprotected]. For information on how the Science Based Targets initiative is assessing scope 3 target as part of its target validation process, please see here. Program/Project Management Job in Germany about Climate Change and Environment, requiring 3-4 years of experience, from SBTi; closing on 18 Nov 2022 Category 11 includes the total expected lifetime emissions from all relevant products sold in the reporting year across the company's product portfolio. The organization may also be able to influence its suppliers or choose which vendors to contract with based on their practices. "Climate change is one of the most . An example of this is when we buy, use and dispose of products from suppliers. Companies could also apply these practices to their downstream emissions by having their customers set science-based targets as well, although they may have less leverage with their customers than suppliers. Factor tables and source documentation are available here. However, beyond those reductions, companies can illustrate innovative approaches to increase their product efficiency. P+ xM 2. Rx xN JV@ D VV@ H bV@ M v}[8 }Rx Z ? To date, over 400 companies have joined the Science Based Targets initiative (SBTi), committing to reduce their greenhouse gas emissions in line with climate science. As stated, companies must cover at least 95% of company-wide Scope 1 and 2 emissions and 90% of Scope 3 emissions. Setting science-based, as opposed to other types of GHG reduction targets, ensures that the targets are meaningful and that their ambition is in line with climate science. fE/l40"-+!0no&|oMu RV ' ng*AE)w$fCn8m=6Ce4t O]r;FF_4srR7> bD=,BT@ZpZ8%B The downstream use of sold products (Category 11) may likely be a large source of emissions. e0P BH(K?+ `P Until recently, most companies have focused on measuring emissions from their own operations and electricity consumption, using the GHG Protocols scope 1 and scope 2 framework. A convenient online training on accounting for emissions throughout the corporate value chain. U.S.A. WBCSD The SBTi involves financial institutions setting targets covering their own operations (scope 1 emissions), purchased electricity and heat (scope 2 emissions) and investment portfolio (scope 3 emissions, category 15). Please see our cookie policy and privacy policies for details. SBTi-approved targets require an ambitious Scope 3 target when Scope 3 emissions cover a significant portion (less than 40 percent) of an organization's overall emissions, which is frequently the case. A lock (LockA locked padlock) or https:// means youve safely connected to the .gov website. The Science Based Targets initiative (SBTi) has scientifically reviewed and upgraded the ambition of Volkswagen Group's emissions reduction targets in production. <>
Scope 1 emissions: Covers all direct emissions from owned or controlled sources, such as energy consumption, fuels, vehicles, etc. Scope 1 covers direct emissions from owned or controlled sources. Interestingly this included some agri, food processors & forestry & paper mills, as well as the expected SMEs, utility providers, and raw material producers. TWG-INF-002 SBTi Criteria and Recommendations 4.2 10 V. Scope 3 Criteria C16 - Scope 3 screening: Companies must complete a scope 3 screening for all relevant scope 3 categories considering the minimum boundary 7 of each category per the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. We use cookies to improve your experience on our site. 1+2 or 1+2+3) are permitted. Happy to provide more detail if anyone is interested. xNKG\.onnr?l[Ap Not only are we taking it seriously as a business, (I was specifically supporting scope 3 emission reduction via our Supply Chain), but we're also taking our personal impact seriously too #oneplanet #esg #sbti #eon. The Scope 3 framework also supports strategies to partner with suppliers and customers to address climate impacts throughout the value chain. 1 0 obj
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Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. WRI For the majority of sectors, the largest sources of a companys emissions lie upstream and/or downstream of their core operations. The difference between scope 1, 2 & 3 GHG emissions The GHG Protocol classifies a company's GHG emissions into three categories or 'scopes', to unify reporting and accounting of emissions worldwide. Rx \V@ @ 0 *M }o D @55 j] b 2V@ @}s O Kx @ @ @
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` p @$ 8@ Z7? Scope 3 includes all other indirect emissions that occur in a company's value chain. 6 0 obj
All companies involved in the sale or distribution of natural gas and/or other fossil fuels shall set scope 3 targets for the use of sold products, irrespective of the share of these emissions compared to the total scope 1, 2, and 3 emissions of the company. The SBTi requires that if Scope 3 emissions make up over 40% of total Scope 1, 2, and 3 emissions then the majority of Scope 3 emissions must be included in the target. 6. stream
Technical Guidance for Calculating Scope 3 Emissions [110] CATEGO 10 Processing of Sold Products Example [10.1] Calculating emissions from processing of sold products using the site-specific method Company A, which produces plastic resin, is an exclusive supplier to Company B, which produces plastic handles for LB 2+ O 87H Y E? Assessing GHG emissions across the entire value chain can be complex. The Scope 3 Standard is the only internationally accepted method for companies to account for these types of value chain emissions. When submitting combined targets, the scope 1+2 portion must be in line with at least a well -below 2C scenario and the scope 3 portion of the target must meet the ambition requirements outlined in C20. <>
Other upstream categories include business travel and employee commuting as well as emissions from waste generated and assets leased. 4 ~ ? The "majority" is defined as the top 3 categories or 2/3 of total scope 3 emissions. It's highly variable depending on what other scope 3 elements are included in the target. The goal was to see how granular (or not) companies are being with regard to scope 3, and if they match CDP's estimates of where scope 3 emissions are actually being produced. (Refer to chapter 5.4 of the Scope 3 Standard for more information on the time boundary of scope 3 categories.) . J @} + ? It provides information not contained in the Scope 3 Standard, such as: The guidance can help companies understand the full climate change impact of their business throughout its value chain and develop more effective GHG reduction strategies. However, more organizations are reaching into their value chain to understand the full GHG impact of their operations. As of February 2020, over 590 companies have had science-based targets approved with the SBTi. Setting a net zero target is no small task, requiring abatement and neutralization of residual emissions within a company's value chain.. Abatement. Almost 50% of scope 3 targets are non-specific in the public statement. stream
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gross profit) at a rate assuming absolute global emissions would be reduced to stay within 2C. %PDF-1.7
*C11 Combined scope targets: Targets that combine scopes (e.g. Share sensitive information only on official, secure websites. Volkswagen's SBTi ambition level thus rises from "below 2 degrees" global warming to "1.5 degrees" for its scope 1 (internal operations) and scope 2 (energy supply) emissions. In all, Scope 3 spans 15 different categories. the targets covering greenhouse gas emissions from greencore's operations (scopes 1 and 2) are consistent with reductions required to keep warming to 1.5c, the most ambitious goal of the paris agreement and our target for the emissions from our value chain (scope 3) meet the sbti's criteria for ambitious value chain goals, meaning they are in Revised decision trees for many of the categories, More detail on the calculation methods for category 1 Purchased goods and services, in particular the hybrid method, More guidance for category 5 Waste generated in operations, in particular in relation to recycling and waste-to-energy, Extended guidance on category 15 Investments. 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