xNKG\.onnr?l[Ap 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). Navigant works with several companies to develop supplier programs and Science-Based Target strategy. For the majority of sectors, the largest sources of a companys emissions lie upstream and/or downstream of their core operations. Value chain decarbonization is emerging as a major focus for sustainability initiatives at companies globally, as efforts to address the climate impact of business increasingly shift to reducing emissions outside of companies' direct control, or 'Scope 3,' which often constitute the majority of company emissions. Thank you for your interest inthe Greenhouse Gas Protocol and SBTi Forest, Land and Agriculture webinar. It's highly variable depending on what other scope 3 elements are included in the target. T b Y  u]' sC f8h `>V@ ? By Nicole Labutong, Technical Manager, CDP, Vincent Hoen, Associate Director Sustainability, Navigant, Measurement, reporting and verification (MRV), Information and Communication Technology (ICT). There are also 69 companies (14% of the total reviewed) who a specific supplier engagement element within their targets, either as the primary or supplemental way of addressing category 1 emissions. 2 Whilst this means that there are only 15 categories instead of hundreds, it can limit your ability to tell the true story of your business. However, more organizations are reaching into their value chain to understand the full GHG impact of their operations. <> 7 WEF (2021) further argues that most . The Partnership for Carbon Accounting Financials, Estimating and Reporting Avoided Emissions, GPC Supplemental Guidance for Forests and Trees, Corporate Value Chain (Scope 3) Standard Online Course, Product Life Cycle Standard Online Course, Global Covenant of Mayors Online Training, Click to download (Scope 3 Calculation Guidance (Full Version), 3.33 MB), Category 1 - Purchased goods and services, Category 3 - Fuel- and energy-related activities, Category 4 - Upstream transportation and distribution, Category 5 - Waste generated in operations, Category 9 - Downstream transportation and distribution, Category 10 - Processing of sold products, Category 12 - End-of-life treatment of sold products. However, it is the easiest to understand and communicate and the most robust in terms of preserving the global carbon budget. Potentially where there are high numbers of suppliers, or a more transactional relationship. v}xx+Lj,K+ `$ ,gc?P#? endobj This calculation guidance is designed to reduce those barriers by providing detailed, technical guidance on all the relevant calculation methods. Or if you think there are other factors at play. Scope 1 emissions: Covers all direct emissions from owned or controlled sources, such as energy consumption, fuels, vehicles, etc. h 4 i J '( 8h `$+ ` `V@ a? The GHG Emission Factors Hub currently contains factors applicable to five scope 3 categories. N, } F N |@d Lq T I Y &g@( `& XLN d0! A convenient online training on accounting for emissions throughout the corporate value chain. Scope 3 emission sources include emissions both upstream and downstream of the organization's activities. We use cookies to improve your experience on our site. @e ^! Scope 3 emission sources include emissions both upstream and downstream of the organizations activities. Interestingly this included some agri, food processors & forestry & paper mills, as well as the expected SMEs, utility providers, and raw material producers. xnF YAc; R4Fd6L }P-YRV%rvY_8ye]\n??e>y=^WU]^sI!G`3+`Pd Guidance and criteria to set targets for different scope 3 categories are available. Login to view this content. In the exhibit below, we can see that the total Scope 3 average intensity . f&@\ Following the SBTis updated target validation criteria, companies may address relevant upstream categories by setting supplier engagement targets. Please see our cookie policy and privacy policies for details. An official website of the United States government. . According to the GHG Protocol Scope 3 guidance, . Scope 3 emissions Scope 3 encompasses emissions that are not produced by the company itself, and not the result of activities from assets owned or controlled by them, but by those that it's indirectly responsible for, up and down its value chain. 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. Examples to demonstrate each calculation method. 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). <> Provides a centralized "hub" for scope 3 engagement resources and communications. In all, Scope 3 spans 15 different categories. These compelling figures suggest that addressing value chain sustainability will further contribute to corporate financial and societal success. The Science-Based Targets Initiative (SBTi) unveiled its new, much anticipated Net-Zero Standard, the world's first framework for corporate Net Zero target setting in line with climate science. Taking climate action in Scope 3 is a commitment, but is 100% necessary.". The "majority" is defined as the top 3 categories or 2/3 of total scope 3 emissions. New excel-based tool from Greenhouse Gas Protocol and WRI that helps companies estimate their greenhouse gas (GHG) emissions based on the GHG Protocol. Companies can look to platforms that facilitate the data collection and engagement, such as CDPs supply chain program. <> Launch of a Net Zero target setting tool and validation service. Enables efficiencies in management, data collection, and analytics. A series of scope 3 workshops with staff has also taken place to identify where procurement can influence our supply chain. <>/Metadata 5144 0 R/ViewerPreferences 5145 0 R>> d  [d Xd i8 HfZY )Y 9 1 H: 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. The categories listed are those defined in the GHG Protocol Scope 3 Standard. Building on this standard, GHG Protocol has now released a companion guide that makes it even easier for businesses to complete their scope 3 inventories. Primary data must often be collected directly from suppliers through a questionnaire or similar format. (SBTi, 2020; TPI, 2020). 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. 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. A .gov website belongs to an official government organization in the United States. The GHG Protocol also provides the following scope 3 resources: EPA has developed the following scope 3 resources: Depending on the source, scope 3 emissions can be quantified using either primary data specific to the activity within a companys value chain, or by using secondary data such as industry averages, proxy data, or other generic data. Approximately 90% of these companies have scope 3 targets. Companies may set one or more of these types of targets to cover at least 2/3 of their scope 3 emissions. <> The Sectoral Decarbonization Approach provides sector-based emission reduction pathways for corporate activities. The organization may also be able to influence its suppliers or choose which vendors to contract with based on their practices. WRI 4 0 obj 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. Understanding the sources of these emissions can help a company know where to focus its reduction efforts. Long-term: 90% absolute reduction across all Scopes. Scope 3 emissions are the emissions of the remainder of the supply chain (minus electricity, i.e., Scope 2), of both . 0+ " `V}h s K $ 2 A 8, H Scope 3 emissions fall within 15 categories, though not every category will be relevant to all organizations. I can't help but wonder if part of the accountability is diminished by keeping the target statements so broad. Vicky Murray, Sustainability Manager, Pukka Herbs. Under this Scope 3-related initiative, we will partner with our top 1,000 suppliers - which represent 70% of Schneider's carbon emissions - to halve their operations' CO2 emissions by 2025. J @} + ? This process can reveal hotspots that a company was previously unaware of. 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. endstream Based on these criteria, before setting targets, a company should first conduct a scope 3 screening to determine where the emissions in its value chain lie. This video covers scope 3 emissions abatement targets in the context of the SBTi Net-Zero Standard Criteria, including the background of scope 3 emissions ab. 1+2 or 1+2+3) are permitted. <> p T@ 0+ ( E 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. E "St& D8h`T Secure .gov websites use HTTPS 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. For companies just beginning to assess their scope 3 emissions, it can be difficult to know where to start. fE/l40"-+!0no&|oMu RV ' ng*AE)w$fCn8m=6Ce4t O]r;FF_4srR7> bD=,BT@ZpZ8%B . endobj TR4FQOx4j3el3iS+/+8oU$X}QQ1N(idIkA,Y" <> The downstream use of sold products (Category 11) may likely be a large source of emissions. One of the really interesting parts of the Science Based Targets Initiative (SBTI) has been the requirement to include Scope 3 emissions, if they represent more than 40% of a company's total emissions. SAF can be used to help corporates reduce their Scope 3 travel emissions. Can track supplier engagement KPIs. cXa?D 8h &!0n A1? Unlike in the sectoral Decarbonization Approach, there is no sector differentiation or correction for business growth. While momentum for science-based targets continues to grow, we need to move much faster to meet the ambitious goals set out in the Paris Agreement. Emissions across all scopes to be reduced and eventually reach net zero. Almost 50% of scope 3 targets are non-specific in the public statement. The Science Based Targets initiative (SBTi) has scientifically reviewed and upgraded the ambition of Volkswagen Group's emissions reduction targets in production. 9 0 obj Category 3 covers emissions from fuel- and energy-related activities that aren't covered in scopes 1 and 2. Sustainable Development is fully embedded in Air Liquide's strategy and in its investment decisions. 6. Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. 10 0 obj . Although these emissions are not under the organizations control, the organization may be able to impact the activities that result in the emissions. stream Scope 3 emissions Now here's where it gets tricky. Join WRI for a discussion on reducing corporate value chain (scope 3) greenhouse gas emissions through meaningful supplier engagement. endobj The Scope 3 categories within the GHG Protocol are intentionally broad, they need to work for many different businesses. Exhibit 27: Disclosure of key Scope 3 categories improved across nearly all sectors % of companies disclosing CO2e (key Scope 3 categories) by sector, 2020 vs. 2021. pC0 zm@ xm? 01 > , * k>u or  =}[P p  @ @ ` K ( ? xAvG4 The Scope 3 Standard is the only internationally accepted method for companies to account for these types of value chain emissions. LB 2+ O 87H Y E? This process can reveal hotspots that a company was previously unaware of. The methods for influencing these reductions are having to develop at pace to catch up, but there isn't yet a well defined toolkit for measurement, and improvement to reduce emissions, in this highly complex area. Scope 3 emissions are all indirect upstream and downstream emissions that occur in the value chain of the reporting company, excluding indirect emissions associated with power generation (scope 2). These supplier engagement targets commit the companys suppliers to setting science-based emission reduction targets. Assessing GHG emissions across the entire value chain can be complex. PfcGH@a@?r) Jl @\ 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. The guidance was developed in partnership with theCarbon Trust, whose GHG measurement expertise and practical experience has helped develop calculation guidance that provides a clear and coherent approach to carrying out a scope 3 assessment. As of February 2020, over 590 companies have had science-based targets approved with the SBTi. 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 . Scope 3 emissions, also referred to as value chain emissions, often represent the majority of an organizations total GHG emissions. Scope 3 emissions categories include: purchased goods and services capital goods fuel- and energy-related activities transportation and distribution waste generated in operations business travel employee commuting leased assets processing of sold products use of sold products end of life treatment of sold products franchises investments But there is a big problem: These avoided emissions claims are often unverifiable or inaccurate. Program/Project Management Job in Germany about Climate Change and Environment, requiring 3-4 years of experience, from SBTi; closing on 18 Nov 2022 Please click here to see any active alerts. H h Y@@ qP= @ I@@ GR |?l_~? e0 About 40% of the global GHG emissions are driven or influenced by companies through their purchases and the products they sell. d@@>r p)1BHc:HI\ Simon Duncan 5mo We've been officially endorsed by the Science Based Target Initiative! gross profit) at a rate assuming absolute global emissions would be reduced to stay within 2C. 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). '" r)? However, the door remains open for innovative companies to distinguish themselves as leaders and create best practices that others will follow. 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