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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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© WRI & WBCSD, 2010© WRI & WBCSD, 2010
• 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
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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
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Introduction to Scopes
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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
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62 companies from 19 countries road tested the standards from January –June 2010
Road Testing Process
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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
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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
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• 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
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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
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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
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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]
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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
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• 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
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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
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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
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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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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
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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