<> 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. 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. 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. pC0 zm@ xm? 01 > , * k>u or =}[P p @ @ ` K ( ? 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. endobj 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. fE/l40"-+!0no&|oMu RV ' ng*AE)w$fCn8m=6Ce4t O]r;FF_4srR7> bD=,BT@ZpZ8%B For some reason this is higher than I expected it to be. For example, assume your organization produces electronic equipment. It has therefore committed to undertaking a comprehensive review of its Scope 3 target-setting methods and criteria in 2022 to ensure alignment with best practices and reflect on lessons . This means more companies setting science-based targets, and more and more of those companies addressing emissions across their value chain. Scope 1 emissions: Covers all direct emissions from owned or controlled sources, such as energy consumption, fuels, vehicles, etc. Appendix D also contains a table that summarizes the different calculation methods available for each of the categories. 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. Following the SBTis updated target validation criteria, companies may address relevant upstream categories by setting supplier engagement targets. The rapid growth of great initiatives like Galvanised's Scope 3 peer group would evidence this, and I expect a lot of movement within the next 12-18 months across the industry to catch up. 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. This increased understanding can benefit the companies themselves, as well as their suppliers, customers, and other value chain partners. However, beyond those reductions, companies can illustrate innovative approaches to increase their product efficiency. An official website of the United States government. 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. The "majority" is defined as the top 3 categories or 2/3 of total scope 3 emissions. Manage the development of updated SBTi scope 3 target setting methods, target setting tools, and target validation criteria and guidance that cover 14 categories of scope 3 emissions. Making corporate value chain accounting easier than ever. endobj These can include use of products, business travel, transportation, and distribution. Can track supplier engagement KPIs. Scope 1 covers direct emissions from owned or controlled sources. Provides a centralized "hub" for scope 3 engagement resources and communications. These supplier engagement targets commit the companys suppliers to setting science-based emission reduction targets. For decision making, a scope 3 inventory screening approach is done by analysing the 15 categories regarding GHG-emission hotspots and visualizing it through differentiating with second level factors, as seen in figure 1 (including iterative calculation to improve accuracy) First level factor: focus on highest contribution on GHG-emissions endstream endobj It's . 13 0 obj 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. 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. The actual target statements range from 10% of suppliers by spend/emissions to 100%. Almost 50% of scope 3 targets are non-specific in the public statement. I can't help but wonder if part of the accountability is diminished by keeping the target statements so broad. These included: The guidance for each category of scope 3 emissions can be downloaded separately. By continuing to use our site you accept our use of cookies. 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. e0P BH(K?+ `P Guidance and criteria to set targets for different scope 3 categories are available. 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. "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. k] & A Launch of a Net Zero target setting tool and validation service. An effective corporate climate change strategy requires a detailed understanding of a companys greenhouse gas (GHG) emissions. 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. 4 ~ ? g ? Scope 3 emissions, also referred to as value chain emissions, often represent the majority of an organization's total GHG emissions. Why should an organisation measure its Scope 3 emissions? Importantly, PwC's targets go beyond scopes 1 and 2 emissions to include PwC's largest indirect scope 3 emissions. In its target validation report for Lam, SBTi noted, "The IPCC [Intergovernmental Panel on Climate . endobj J @} + ? @q %N A first draft of the calculation guidance was released in late 2011 for public comment. d ? Vicky Murray, Sustainability Manager, Pukka Herbs. H 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. Methods for calculating GHG emissions for each of the 15 categories of scope 3 emissions (such as purchased goods and services, transportation and distribution, and use of sold products); Guidance on selecting the appropriate calculation methods; and. Login to view this content. The Group has set investment portfolio targets for all classes required under the SBTi Financial Institution guidance. JavaScript appears to be disabled on this computer. 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. For more information contact [emailprotected]. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Scope 3 emission sources include emissions both upstream and downstream of the organization's activities. This category covers the following fuel- and energy-related activities: `7RV@@qqP1+ h. Scope 3 emissions include all sources not within an organizations scope 1 and 2 boundary. b q 0- | The Science Based Targets initiative (SBTi) validated PwC's targets to reduce greenhouse gas emissions by 50% in absolute terms from 2019 levels by 2030 in line with a 1.5 degree scenario. 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. + `*V@@(ddD LhZA?0-+ &Rx " 8h ;" fb@ The Sectoral Decarbonization Approach provides sector-based emission reduction pathways for corporate activities. h Y@@ qP= @ I@@ GR |?l_~? Please click here to see any active alerts. 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. 2 v}xx+Lj,K+ `$ ,gc?P#? Building internal support for science -based targets 47 But what about all of the emissions a company is responsible for outside of its own wallsfrom the goods it purchases to the disposal of the products it sells? For that reason, if scope 3 emissions represent more than 40% of a companys overall emissions, the SBTi requires they set a target to cover this impact. 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. Potentially where there are high numbers of suppliers, or a more transactional relationship. They take into account inherent differences between sectors such as their expected growth and potential for emissions reduction activities. Below is a list of emission sources and the location of the factors in the GHG Emission Factors Hub.. <> To view or add a comment, sign in T b Y u]' sC f8h `>V@ ? . (SBTi, 2020; TPI, 2020). Companies can look to platforms that facilitate the data collection and engagement, such as CDPs supply chain program. 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. Scope 3 emissions fall within 15 categories, though not every category will be relevant to all organizations. For a complete description of all scope 3 categories and quantification methods, see the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. As stated, companies must cover at least 95% of company-wide Scope 1 and 2 emissions and 90% of Scope 3 emissions. q p N P c G (Q>i ( @ ` rY E? The SBTi recognises that the practice of Scope 3 reporting and target setting has evolved significantly since the SBTi began validating targets in 2016. Contact Vincent Hoen from Navigant at [emailprotected] for further details. 8 0 obj 9 0 obj d 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. Regulatory News Articles for Rotork Plc Ord 0.5P 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. 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. K YY@v s p# Y? 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. Scope 3 emissions Now here's where it gets tricky. 4 0 obj Happy to provide more detail if anyone is interested. Minor corrections to the Scope 3 Standard are recorded below. e0 This Microsoft Excel-based tool estimates the majority of Scope 3 GHG emissions for an entire corporation, based on guidance from the Science Based Targets initiative (SBTi). as the SBTi drives ambitious corporate climate action. 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). Guidance and criteria to set targets for different scope 3 categories are available. Then calculate emissions the same as for scope 2 electricity, using eGRID emission factors. 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