product life cycle & scope 3 standards cummis.pdf• corporate ghg management and reporting...

Product Life Cycle & Scope 3 Standards

Standards Development Process

© WRI & WBCSD, 2010© WRI & WBCSD, 2010

Presentation Outline

• Overview of GHG Protocol Initiative

• Overview of Scope 3 and Product Standard Development Process

• Introduction to the Product Standard

• Introduction to the Scope 3 Standard

• Next Steps

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• Convened in 1998 by World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD)

• A multi-stakeholder partnership of businesses, NGOs, governments and others

• Mission: Develop internationally accepted GHG accounting and reporting standards and to promote their use worldwide

• Free standards and tools available at www.GHGProtocol.org

Greenhouse Gas Protocol Initiative

http://www.ghgprotocol.org/

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• Carbon Disclosure Project (CDP)

• The Climate Registry

• California Climate Action Registry

• Chicago Climate Exchange

• Dow Jones Sustainability Index

• EU Emissions Trading Scheme

• French REGES Protocol

• Global Reporting Initiative

• METI, Japan

• Mexico GHG Program

• Respect Europe Business Leaders Initiative for

Climate Change (BLICC)

• International Trade Associations (Aluminum,

IPIECA, ICFPA, Cement, Iron and Steel)

• UK Emissions Trading System

• U.S. EPA Climate Leaders Initiative

• World Wildlife Fund Climate Savers

• World Economic Forum Global GHG Registry

• ISO 14064 Part 1

• U.S. Department of Energy (1605b)

Programs Based on the Corporate Standard

© WRI & WBCSD, 2010© WRI & WBCSD, 2010 5

Introduction to Scopes


New Standards in Development

Scope 3 (Corporate Value Chain)Accounting & Reporting Standard

Quantify and report major GHG emissions in the value chain at the company/organization level (scope 3)

To understand, manage, and report GHG emissions across the entire value chain

Build on GHG Protocol Corporate Standard

Quantify and report product-level emissions

To understand, manage, and report the life cycle GHG emissions associated with individual products

Build on existing life cycle assessment standards

Product Life CycleAccounting & Reporting Standard

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• Corporate GHG management and reporting moving beyond companies’ own operations (i.e., scope 1 and 2), toward the full value chain

• Increasing focus on GHG emissions associated with production and consumption of goods and services

• Increasing need for disclosure and management of climate-related risk in the value chain

• Increase in business-to-business requests for GHG information throughout the supply chain

• Increasing public reporting of product and scope 3 GHG emissions

• Increasing inclusion of scope 3 emissions in corporate GHG reduction goals

Drivers for New Standards

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Process Structure

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WRI/WBCSD Secretariat

Steering Committee (25 members)

ProductTechnical Working

Groups ( 100+ members)

Scope 3Technical Working

Groups ( 60+ members)

Stakeholder Advisory Group (1,400+)

Product Standard Scope 3 Standard

Road Testing Participants (60+ organizations)

Process Structure

November 2007 Survey and consultations to assess need for new standards

September 2008 Steering Committee Meeting #1 (Washington DC)

Technical Working Group Meeting #1 (London)

January 2009 Working groups begin drafting

Spring & Summer

2009

Steering Committee Meeting #2 (Geneva)

Technical Working Group Meeting #2 (Washington DC)

Stakeholder webinar and comment period on summary slides

Fall 2009 Steering Committee Meeting #3 (Washington DC)

First draft of complete standards produced

Stakeholder workshops held (in US, Europe, and China) and comment period

on first complete drafts

January-June 2010 Road testing by 60+ companies

June 2010 Steering Committee Meeting #4 (Oslo)

Fall 2010 Public comment period on revised drafts

December 2010 Text of the standards finalized

Spring 2011 Launch final standards 9

Standard Development Timeline

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Efforts Towards Harmonization

• WRI/WBCSD is coordinating with the PAS 2050 and ISO processes to work towards harmonization

• WRI/WBCSD have:

– Submitted written comments on ISO 14067-1, 14067-2, 14069

– Attended ISO meetings in Paris (14069) and Japan, Mexico (14067)

– Held conference calls with the Carbon Trust to identify current areas of harmonization and future work with PAS 2050 process

– Klaus Radunsky (ISO) has joined the Steering Committee

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Stakeholder Comment Period

• Written comment period ran from November 11th to December 21st, 2009

– Received written comments from 63 organizations

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Stakeholder Comment Period for First Drafts

© WRI & WBCSD, 2010© WRI & WBCSD, 2010 12

62 companies from 19 countries road tested the standards from January –June 2010

Road Testing Process


Reported Goals of Road Testers

Engaging suppliers and enabling supply chain GHG management

Understanding risks and opportunities associated with emissions in the entire value chain

Identifying GHG reduction opportunities and prioritizing reduction efforts

Setting scope 3 reduction targets

Improving credibility and transparency in reporting

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Summary of Feedback from Stakeholders

• Wherever possible the standards should be more specific for better standardization across inventories

• There should be more guidance on collecting data and engaging with suppliers

• There should be more linkages and consistency between the Product and Scope 3 standards

• There should be an explanation of how the GHG Protocol Product Standard relates to other standards

• More general knowledge of life cycle assessment and corporate inventories is needed, especially in developing countries

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Overview of Product Standard

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Summary of Product Standard Revisions

Revised boundary requirements

• Capital goods are now recommended, but not required, to be included

• Companies may justify and disclose exclusions

• Guidance is provided on exclusions

New land use change guidance

Revised data definitions and data quality guidance and reporting requirements

New uncertainty guidance

Additional guidance on recycling allocation

Additional guidance on calculating and reporting biogenic emissions

Streamlined reporting requirements

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Nature

Material Acquisition and Preprocessing

Production

Product Distribution and Storage

Use

End of Life

Potential Transport Process

Life Cycle Stage

Returned to Nature Recycled/reused into another product life cycle

Nature

Material Acquisition and Preprocessing

Production

Product Distribution and Storage

Use

End of Life


Boundary Setting Requirements

• All attributable processes shall be included in the product inventory. Any exclusions shall be justifiable and disclosed in the inventory report.

• Significant non-attributable processes, such as capital goods, should be included.

• Companies shall conduct a cradle-to-grave assessment for all final products. Companies may conduct a cradle-to-gate assessment for intermediate products. Cradle-to-gate inventories shall be clearly reported and justified.

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Material Acquisition &

Pre-processingProduction

Distribution and Storage

Use End-of-Life

ProductionProcess

Pre-Processing of Component

A

Pre-Processing of Component

B

Energy

Distribution Process

Use ProcessEnd-of-Life

Process

Energy Energy Energy

Movement of material through the life cycleAttributable ProcessesEnergy Inputs

Material Input B

Material Input A


• Primary data shall be collected for all processes under the control of the reporting company– Primary data is defined as process data (direct emissions, energy, or

physical data) specific to the given process in a product’s life cycle

• For all other processes, primary or secondary data shall be collected

• Activity data, emission factors, and/or direct emissions data shall be assessed by the data quality indicators during the data collection process

• Data Quality Indicators are:

Data Requirements

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Technological Representativeness

Geographical Representativeness

TemporalRepresentativeness Completeness Precision


Data Reporting

• For significant processes, companies shall report a descriptive statement on the data sources, the data quality, and any efforts taken to improve data quality.

• Companies shall report the percentage of total GHG emissions and removals quantified using:

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Data Information

Data Type Percent of Emissions Calculated with the Data Type

Primary Data [Percentage]

Secondary Process Data

Secondary Financial Data

Unspecified


Uncertainty

• Companies shall report a descriptive statement on sources of uncertainty and methodological choices.

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Source of Uncertainty and/or

Methodological Choice

Qualitative Description

Use Profile Describe the use profile of the product. If more than one use profile was applicable,

disclose which method was used and justify the choice (situational uncertainty)

End-of-Life Profile Describe the end-of-life profile of the product. If more than one end-of-life profile

was applicable, disclose which method was used and justify the choice (situational

uncertainty)

Allocation Method (s) Describe any allocation problems in the inventory and which allocation method was

used. If more than one allocation method was applicable, disclose which method

was used and justify the choice

Recycling Allocation Method(s) Disclose and reference which method was used (0/100 output method, 100/0 input

method, or other method

Impact Assessment List the source of Global Warming Potential (GWP) factors used

Calculation Models Describe the models, identify their published source, and identify areas where they

may deviate from real world conditions

Excluded attributable Processes,

Materials, or Energy Flows

Document and justify all process , material, or energy flow exclusions

Cradle-to-Gate Inventory Justify why a cradle-to-gate inventory was performed


Assurance Requirements

• The product inventory shall be assured

• Company may perform either:

– 3rd party external assurance

– Independent self-assurance

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Reporting Requirements

General Inventory Information

Parameter Description [Template Notes]

Company Name and Contact Information

Product Name [Material Product or Service, Brand Name if applicable]

Product Description[Brief product description including whether it is a final or intermediate product]

Type of Inventory[Final Product Cradle-to-Grave Inventory OR Intermediate Product Cradle-to-Gate Inventory]

Sector Guidance (when applicable) [include reference to sector guidance used]

Inventory Date and Version

[Year inventory was finalized]

[1 if first inventory, 2,3 etc. for future versions]

[A link to previous inventory reports and description of any methodological changes (when applicable)]

Establishing the Scope

Functional Unit (study basis) [see Chapter 4]

Time Boundary [see Chapter 6]

Country/Region of Product Consumption [for Cradle to Grave assessments]

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Reporting Requirements

Inventory Results: g CO2e /Functional Unit (f.u.)

Total Inventory Results

Biogenic Inventory Results

(when applicable)

Non-Biogenic Inventory Results

(when applicable)

Land Use Impact

(when applicable)

Current inventory results

Removals Emissions Removals Emissions

Base inventory results (if tracking performance)

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Life Cycle Stages

Stage Definition Stage Description Value (Percent of Total CO2e)

Material Acquisition & Preprocessing

[Brief description the life cycle stage, including the start and end points, inclusions not visible on the process map , and the time boundary of each stage]

ProductionDistribution & Storage

Use

End-of-Life

Interpretation of the Inventory Results

[Brief description on how the results should be used]


Product Comparisons

• Performance Tracking

Supported by the Product Standard “As-Is”

• Purchasing decisions (e.g. by consumers or businesses)

• Product labels

• Performance claims made by stakeholders

Supported with GHG program specifications

• Comparative Assertions

Not supported by the product standard

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Overview of Scope 3 Standard

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Summary of Revisions

Revised boundary requirement from 80% of anticipated emissions to all emissions

• Guidance is provided on how to use available data (including proxy data) to meet the boundary requirements

Clarified the definitions of scope 3 emission categories

Revised data definitions and data quality guidance

Streamlined reporting requirements

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Upstream Activities

1. Purchased Goods & Services

2. Capital Goods3. Fuel & Energy Related

Activities4. Transport & Distribution5. Waste Generated in

Operations6. Business Travel7. Employee Commuting8. Leased Assets9. Investments

Reporting Company

Downstream Activities

10. Transport & Distribution

11. Processing of Sold Products

12. Use of Sold Products13. Disposal of Sold

Products 14. Leased Assets15. Franchises

Emissions from own operations

Upstream Emissions

Cra

dle

Grave

Gat

e

Gat

e

Purchase Sale

Downstream Emissions

Scope 2 and 3 Scope 3 Scope 1 29


• Companies shall account for and report all scope 3 emissions and disclose and justify any exclusions

• Companies should adhere to principles of relevance, completeness, accuracy, consistency and transparency when deciding whether to exclude any activities

• Companies should not exclude activities that: – contribute significantly to the company’s total anticipated scope 3

emissions

– the company has significant influence over

– contribute significantly to the company’s risk exposure

– stakeholders deem critical

– have been outsourced or are typically performed in-house by other companies in the sector

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Boundary Requirements


Data Guidance

• There are no requirements to collect primary data in the scope 3 standard

• We anticipate scope 3 inventories to be a mix of primary data (e.g. energy data from suppliers) and secondary data (e.g. average energy data from databases)

• Data should be evaluated by the five quality indicators of:

• The Scope 3 Standard provides calculation guidance for each emissions category

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Prioritize data collection efforts

Review and select

available data

Collect data & fill data gaps

Improve data quality over

time

Technological Representativeness

Geographical Representativeness

TemporalRepresentativeness Completeness Precision


Reporting Requirements on Company Information

Category Company Response

Company name

Description of the company

Chosen consolidation approach (equity share, operational control or financial control)Description of the businesses and operations included in the company’s organizational boundary

The reporting period covered

A list of scope 3 activities included in the inventoryA list of excluded scope 3 emission sources with justification of their exclusion

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Reporting Requirements on Inventory Results and Supplier Data

Greenhouse Gas Emissions Metric tons CO2-eq

Scope 1: Direct Emissions from Owned/Controlled Operations

Scope 2: Indirect Emissions from the Use of Purchased Electricity, Steam, Heating & Cooling

Scope 3: Other Indirect Emissions

a. Indirect Emissions from Purchased Products (Upstream)

Purchased Goods & Services

Capital Goods

Fuel- and Energy-Related Activities (Not Included in Scope 1 or 2)

Transportation & Distribution

Waste Generated in Operations

Business Travel

Employee Commuting

Leased Assets (Not Included in Scope 1 or 2)

Investments (Not Included in Scope 1 or 2)

Other

b. Indirect Emissions from Sold Products (Downstream)

Transportation & Distribution of Sold Products

Processing of Sold Products

Use of Sold Products

End-of-Life Treatment of Sold Products

Leased Assets (Not Included in Scope 1 or 2)

Franchises (Not Included in Scope 1 or 2)

Other

CO2 from Biomass Combustion

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Supplier Greenhouse Gas Emissions

Tier 1 Supplier emissions (metric tonnes CO2-eq)

Percentage of all Tier 1 suppliers accounted for (as a percentage of the reporting company’s

total spend)

Allocation method used

Description of methodologies and approaches used to collect data and quantify emissions


Reporting Requirements on Methodology

• Companies shall report:

– Description of the methodologies and types of data used to calculate emissions

– Description of the accuracy and completeness of reported emissions data

– Percentage of emissions calculated using primary data

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Next Steps

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Comment Period

• Revised drafts will be released for public comment in late October

• WRI-WBCSD welcome written comments

• Copies of the drafts and comment submittal instructions will be available at www.ghgprotocol.org

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http://www.ghgprotocol.org/

October 2010 Release of revised drafts for public comment

October –November 2010

30 day public comment period

November –December 2010

WRI-WBCSD revise drafts based on public comments and steering committee feedback

Winter 2010/2011

Text of the standards finalized

Spring 2011 Launch final standards

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Remaining Milestones

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Guidance and Tools in Development

Data collection templates

Program design guidance

Supplier engagement

guidance

Uncertainty calculation guidance

and online tool

Sample supplier letters

Descriptive list of secondary data

sources

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Seeking input on additional resources needed


2011 Launch Strategy

Launch events in Spring 2011

• Include media events and workshops

• Targeting U.S., Europe and Asia

Host a workshop for

program operators

Develop training curriculum and

pilot in one developing

country

Finalize strategies for

development of sector and

product guidance

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Questions

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www.ghgprotocol.org

product life cycle & scope 3 standards cummis.pdf• corporate ghg management and reporting...

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