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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. a ? v}xx+Lj,K+ `$ ,gc?P#? TheScope 3 Standardis the only internationally accepted method for companies to account for these types of value chain emissions. It'll also be interesting to see how those companies with very broad scope 3 statements start to report on them and track them over time. This calculation guidance is designed to reduce those barriers by providing detailed, technical guidance on all the relevant calculation methods. This category is applicable to investors (i.e., companies that make an . 5 0 obj
d ? The upcoming SBTi sector-specific guidance should provide some support on the . stream
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. Scope 3 emissions Now here's where it gets tricky. Join our mailing list to receive our newsletters and stay up-to-date 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. The SBTi does not currently assess targets for cities, local governments, public sector institutions, educational institutions or non-profit organizations. At the time of writing (August 2020), only one type of Scope 3 emissions is compulsory to report, and it's only compulsory for large unquoted companies and large LLPs. 0 J `8 J p p,@Y N` 8 B d."? 7 WEF (2021) further argues that most . For those in Pharma, Consumer Goods, Retail, and Chemicals, I hope these charts are of interest to see how your peer companies have accounted for scope 3 in their approved target statements. Near-term: Scope 2 needs to be 100% renewable electricity purchased by 2030 Scope 1 and 2 need to have reduced on average by 4.2% per annum on absolute values Scope 3 needs to have reduced by a minimum of 2.5% per annum. For companies just beginning to assess their scope 3 emissions, it can be difficult to know where to start. I'd expect most, if not all, of the companies have more granular data on where they are targeting their reductions. aG8(0PcGn( `@)PXPJ `@|aA8vu4X? In addition, because scope 3 emission sources may represent the majority of an organizations GHG emissions, they often offer emissions reduction opportunities. According to the GHG Protocol Scope 3 guidance, . As Manufacture 2030 supports leading companies who are looking to help their supply chain reduce emissions, we have keen interest in category 1 emissions, purchased goods & services. Our 2022 Scope 3 Webinar Series follows on from three webinars the UN Global Compact Network UK hosted in 2020: Webinar: CATEGORY 1: PURCHASED GOODS AND SERVICES - Guest Speaker: Dorothe D'Herde, Head of Sustainable Business at Vodafone.. Webinar: CATEGORY 11: USE OF SOLD PRODUCTS - Guest Speaker: Jonathan Dunn, Head of International Policy and Planning at Anglo American. Scope 3 emissions, also known as value chain emissions, are indirect GHG emissions both upstream and downstream of an organisation's main operations. Primary data must often be collected directly from suppliers through a questionnaire or similar format. Companies are responsible for the majority of global emissions and therefore play an integral role in meeting these goals. A .gov website belongs to an official government organization in the United States. Y'2V@@pN@}? At COP 24, CDP, the Gold Standard, WRI, and WWF will be launching a compendium of best practices in addressing scope 3 GHG emissions. The SBTi requires companies to set ambitious scope 3 targets in addition to science-based targets for scope 1 and 2 if scope 3 makes up more than 40% of total scope 1, 2 and 3 emissions. For example, products that consume electricity have substantial potential to reduce their emissions due to the expected decarbonization of the power generation sector. 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. 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. Case Postale 2075 CH-1211, Geneva 1 For example, assume your organization produces electronic equipment. If you're interested in Science Based Targets, and potentially even in the process of setting your own, this might be of use. 1+2 or 1+2+3) are permitted. The GHG Emission Factors Hub currently contains factors applicable to five scope 3 categories. Chemin Eugne-Rigot, 2B `* Vux x \u_ Why should an organisation measure its Scope 3 emissions? An example of this is when we buy, use and dispose of products from suppliers. W(P%'S`2_~p"`zdRY vPFj u`kP&aAxnK4P=WWW '`BP: + \Lk\J@@JI@@Y%` <>/Metadata 5144 0 R/ViewerPreferences 5145 0 R>>
They take into account inherent differences between sectors such as their expected growth and potential for emissions reduction activities. The preferred order for types of targets is: absolute targets in line with approved methods by the SBTi, intensity targets in line with approved methods by the SBTi or supplier engagement targets. There are different options for companies to set a scope 3 target. 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. f&@\ we will reduce scope 3 emissions by X%) is referenced in the current approved targets (as of Nov 2020): (Note: below you can find this same chart produced for specific industry sectors: Pharma & Biotech, Chemicals, Consumer Products & General/Food Retail). 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. The downstream use of sold products (Category 11) may likely be a large source of emissions. The Sectoral Decarbonization Approach provides sector-based emission reduction pathways for corporate activities. 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 category 1: purchased goods and services. If a company finds significant emissions within one of the scope 3 categories purchased goods and services, for example it is then able to develop category-specific solutions to address these emissions. finds that most of the supply chain emissions are in bought or sold product categories, as defined by GHP (2020). To do this review I did a simple tally recording any time a specific scope 3 category, no scope 3 categories, or a general statement (e.g. The SBTi recognises that the practice of Scope 3 reporting and target setting has evolved significantly since the SBTi began validating targets in 2016. 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. However, the door remains open for innovative companies to distinguish themselves as leaders and create best practices that others will follow. This process can reveal hotspots that a company was previously unaware of. 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. endstream
40% or more of total scope 1, 2, and 3 emissions, a scope 3 target is required. SAF can be used to help corporates reduce their Scope 3 travel emissions. The GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard presents details on all scope 3 categories and requirements and guidance on reporting scope 3 emissions. PrF P 8h @q 8 %`8 fE/l40"-+!0no&|oMu RV ' ng*AE)w$fCn8m=6Ce4t O]r;FF_4srR7> bD=,BT@ZpZ8%B Washington, D.C. 20002 A hypothesis for why use of products sold is so far below what we might expect looking at CDP's data, is that it is still very difficult to get internal buy-in/sign off for what might be need to fundamentally change products, where as dealing with the supply chain feels internally more realistic. Volkswagen's SBTi ambition level thus rises from "below 2 degrees" global warming to "1.5 degrees" for its scope 1 (internal operations) and scope 2 (energy supply) emissions. Below is a list of emission sources and the location of the factors in the GHG Emission Factors Hub.. (Refer to chapter 5.4 of the Scope 3 Standard for more information on the time boundary of scope 3 categories.) Other upstream categories include business travel and employee commuting as well as emissions from waste generated and assets leased. 8 0 obj
This video covers scope 3 emissions abatement targets in the context of the SBTi Net-Zero Standard Criteria, including the background of scope 3 emissions ab. endobj
So, we have a profound firsthand understanding of the challenges our clients are facing. They are less susceptible to unforeseen disruption and climate risk. endobj
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If you're interested in a specific industry not covered below, do let me know and I'll see if we can dig it out of the data for you. My gut says you are right about companies setting targets and tackling those areas of Scope 3 where they think they will be successful and building momentum before then addressing the more challenging areas like redesigning products and services to reduce emissions in the use of their products they sold. The Group has set investment portfolio targets for all classes required under the SBTi Financial Institution guidance. '" r)? as the SBTi drives ambitious corporate climate action. TR4FQOx4j3el3iS+/+8oU$X}QQ1N(idIkA,Y"
. ` p @$ 8@ Z7? 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. [d Xd i8 HfZY )Y 9 1 H: Finally, the GEVA (GHG emissions per unit of value added) method sets intensity targets based on CO2e per value added (i.e. C0 HO 1+ HL =+ HI + HF + HC #+ H@ /+ @vV@ 0+ `> A}/ 9? In all, Scope 3 spans 15 different categories. 2 These factors are applicable to employee commuting as well as business travel. 10 G Street NE, Suite 800 Please click here to see any active alerts.
q p N P c G (Q>i ( @ ` rY E? Taking climate action in Scope 3 is a commitment, but is 100% necessary.". 1 0 obj
It is important for companies that sell, transmit, or distribute natural gas or other fossil fuel products to set emission reduction Scope 3 targets for the "Use of sold products" category. Assessing GHG emissions across the entire value chain can be complex.
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