Corporate Value Chain (Scope 3) Accounting & Reporting Standard. Summary of Changes
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1 Nvember 2010 Wrld Business Cuncil fr Sustainable Develpment Crprate Value Chain (Scpe 3) Accunting & Reprting Standard Summary f Changes 1. Intrductin This dcument summarizes the changes made t the GHG Prtcl Crprate Value Chain (Scpe 3) Accunting & Reprting Standard between the Draft fr Rad Testing (January 2010) and the Draft fr Stakehlder Review (Nvember 2010). Between January and June 2010, 35 cmpanies implemented the draft GHG Prtcl Scpe 3 Standard t give WRI and WBCSD feedback n the practicality f the draft standard. Changes were made t the draft standard based n: Written cmments frm stakehlder advisry grup members n the Draft fr Stakehlder Review (Nvember 2009) Stakehlder cmments received during five in-persn stakehlder wrkshps (Nvember December 2009) Feedback frm 35 rad testing cmpanies during an in-persn wrkshp (May 2010) Written feedback frm 35 rad testing cmpanies n the Draft fr Rad Testing (July 2010) Feedback frm the Steering Cmmittee (June 2010) Feedback received frm Technical Wrking Grup members during tw webinars (April 2010 and August 2010) The written cmments frm the stakehlder advisry grup, a summary f thse cmments, and a summary f the rad testing feedback are available n the GHG Prtcl website: 1
2 Nvember Summary f Changes Made t the Standard Tpic/Chapter Publicatin Title Updated Bundary Requirements Updated Reprting Requirements Standard Structure Mdificatin Prpsed Title: GHG Prtcl Crprate Value Chain (Scpe 3) Accunting & Reprting Standard Cmpanies shall accunt fr and reprt all scpe 3 emissins and disclse and justify any exclusins. Cmpanies shall fllw the principles f relevance, cmpleteness, accuracy, cnsistency and transparency when deciding whether t exclude any activities frm the scpe 3 inventry. Cmpanies shall reprt all scpe 3 emissins, fllwing the requirements in this standard, in additin t reprting all scpe 1 and 2 emissins accrding t the GHG Prtcl Crprate Standard. A public GHG emissins reprt that is in accrdance with the GHG Prtcl Scpe 3 Standard shall include the fllwing infrmatin: A descriptin f the cmpany and inventry bundary, including the cnslidatin apprach chsen and a descriptin f the businesses and peratins included in the bundary The reprting perid cvered Ttal scpe 1 emissins and ttal scpe 2 emissins Scpe 3 emissins reprted separately by scpe 3 categry Emissins data fr CO 2, CH 4, N 2 O, HFCs, PFCs, SF 6 in tnnes f CO 2 equivalent A list f scpe 3 activities included in the reprt A list f scpe 3 activities excluded frm the reprt with justificatin f their exclusin Year chsen as scpe 3 base year, and an emissins prfile ver time that is cnsistent with and clarifies the chsen plicy fr making base year emissins recalculatins Apprpriate cntext fr any significant emissins changes that trigger base year emissins recalculatins Fr each scpe 3 categry, a descriptin f the methdlgies, allcatin methds, and types and surces f data used t calculate scpe 3 emissins Fr each scpe 3 categry, a descriptin f the accuracy and cmpleteness f reprted scpe 3 emissins data Fr each scpe 3 categry, the percentage f emissins calculated using primary data Ttal supplier scpe 1 and scpe 2 emissins data, allcated t the reprting cmpany using a cnsistent metric and reprted separately frm the reprting cmpany s scpe 1, scpe 2 and scpe 3 emissins The methdlgy used t quantify and allcate supplier emissins data The percentage f Tier 1 suppliers accunted fr (as a percentage f the reprting cmpany s ttal spend) Changed the name f Chapter 4 frm Mapping the Value Chain t Overview f Scpe 3 Emissins Mved the cntent related t mapping the value chain frm Chapter 4 Overview f Scpe 3 Emissins t Chapter 5 Setting the Bundary Mved the cntent n identifying relevant emissins frm Chapter 5 Setting the Bundary t Chapter 6 Cllecting Data Remved Part 2 f the standard Mved the descriptins f each scpe 3 categry t Chapter 4 Overview f 2
3 Nvember 2010 Chapter 1: Intrductin Chapter 2: Accunting & Reprting Principles Chapter 3: Business Gals & Inventry Design Chapter 4: Overview f Scpe 3 Emissins Scpe 3 Emissins Mved the guidance n calculating emissins t a cmpanin dcument Guidance fr Calculating Scpe 3 Emissins (t be develped) Expanded explanatin f the relatinship between the Scpe 3 Standard and the GHG Prtcl Prduct Life Cycle Standard Expanded explanatin f the business value f scpe 3 accunting Added the fllwing requirement: GHG accunting and reprting f a scpe 3 inventry shall be based n the fllwing principles: relevance, cmpleteness, cnsistency, transparency, and accuracy. Added guidance n using the five accunting and reprting principles Added guidance and descriptins fr each business gal Added a sectin n Overview f the scpes defining scpe 1, scpe 2 and scpe 3 (Sectin 4.1) Added a sectin n Organizatinal bundaries and scpe 3 emissins explaining hw the selectin f rganizatinal bundaries affects scpe 3 emissins (Sectin 4.2) Added a new sectin Descriptin f scpe 3 categries that clarifies what is included in each scpe 3 categry (Sectin 4.4) Mdificatins t list f scpe 3 categries: Remved Other Scpe 3 Emissins and mved emplyee cmmuting t Upstream Emissins t simplify the framewrk Separated Supplier Emissins frm the table f scpe 3 categries t avid duble cunting and cnfusin Remved the upstream Franchises categry because it is an uncmmn activity; maintained the dwnstream Franchises categry Added a dwnstream Prcessing f Sld Prducts categry based n rad testing feedback that this categry was missing frm the riginal list Added a clumn explaining the Emissins Included fr each scpe 3 categry t clarify the minimum bundaries fr each categry. In general, explained that emissins related t capital gds and infrastructure are nt required fr mst categries (e.g., transprtatin, waste, business travel, leased assets, franchises, investments, emplyee cmmuting) Mdificatin t categry definitins and guidance: Categry 1 Purchased Gds & Services : Added a distinctin between direct (prductin related) prcurement and indirect (nn prductin related) prcurement as guidance Categry 2 Capital Gds : Changed categry name frm capital equipment t capital gds. Clarified that fr purpses f accunting fr scpe 3 emissins, cmpanies shuld nt depreciate, discunt, r amrtize the emissins frm the prductin f capital gds ver time. Categry 3: Fuel- and Energy-Related Activities Nt Included in Scpe 1 r 2 : Changed the categry name frm Energy related activities nt included in scpe 2 t Fuel and energy related activities nt included in scpe 1 r 2. Mved emissins assciated with the prductin f fuels cnsumed by the reprting cmpany t this categry frm the Categry 1 Purchased Gds & Services. Categry 4 Transprtatin & Distributin (Upstream) : Clarified whether emissins related t transprtatin shuld be accunted fr in Categry 1 Purchased Gds & Services, Categry 4 Transprtatin & Distributin (Upstream), Categry 8 Leased Assets (Upstream), r Categry 10 Transprtatin & Distributin (Dwnstream). Categry 9 Investments : Clarified what activities fall int the investments 3
4 Nvember 2010 Chapter 5: Setting the Bundary Chapter 6: Cllecting Data Chapter 7: Allcating Emissins Chapter 8: Accunting fr Supplier Emissins Chapter 9: Setting a Reductin Target & Tracking Emissins Over Time categry and added a bx n Accunting fr Emissins frm Investments & Services in the Financial Services Sectr Categry 12 Use f Sld Prducts : Made a distinctin between direct use phase emissins (which are required) and indirect use phase emissins (which are ptinal); added guidance n prduct lifetime and durability; added guidance n avided emissins frm the use f sld prducts Based n rad testing feedback, revised the scpe 3 bundary requirement frm Cmpanies shall accunt fr and reprt emissins frm the largest scpe 3 surces that cllectively accunt fr at least 80% f ttal anticipated scpe 3 emissins t Cmpanies shall accunt fr and reprt all scpe 3 emissins and disclse and justify any exclusins, which rad testing cmpanies fund mre practical and straightfrward by aviding the need t determine 80% thrugh a screening/estimatin step. (Sectin 5.1) Mved guidance n Mapping the value chain frm Chapter 4 t Chapter 5 and revised the sectin t be mre flexible (e.g., allw mapping by supplier type rather than individual supplier) (Sectin 5.3) Added guidance n accunting fr dwnstream emissins (e.g., fr intermediate prducts); Clarified the definitins f final prducts and intermediate prducts (Sectin 5.4) Added guidance n disclsing and justifying exclusins (Sectin 5.5) Added an verview f calculatin methds, activity data, emissin factrs, and glbal warming ptential (GWP) factrs (Sectin 6.1) Added guidance n using energy emissin factrs: T calculate scpe 3 emissins, cmpanies shuld use emissin factrs fr fuels and electricity that include the full life cycle, where pssible (Sectin 6.1) Revised definitins f primary and secndary data; added examples f primary and secndary data; added guidance n benefits f primary data and secndary data; added guidance n selecting data surces (Sectin 6.2) Added guidance n cllecting data, filling data gaps, and imprving data quality ver time (Sectins 6.3 and 6.4) Clarified the descriptin f allcatin and allcatin methds Added guidance n selecting an allcatin methd Added a decisin tree n selecting an allcatin methd Added guidance n allcating supplier emissins data Added examples f using physical allcatin and market allcatin fr specific situatins: c-prducts manufactured at a facility, transprtatin, retail & warehusing, by-prducts, etc. Added guidance n allcating emissins by scpe 3 categry Added a new chapter n accunting fr supplier emissins that includes guidance n the fllwing steps: Identify and select relevant suppliers Cllect emissins data frm suppliers Allcate supplier emissins t the reprting cmpany Aggregate emissins data crss all Tier 1 suppliers Reprt supplier emissins Added a table f Challenges and Guidance fr Cllecting Primary Data frm Suppliers based n rad test feedback Added a new chapter n setting a GHG target and tracking a cmpany s emissins ver time Added the fllwing requirements: Cmpanies shall chse and reprt a scpe 3 base year and specify their reasns fr chsing that particular year. Cmpanies shall recalculate base year emissins when significant changes in the cmpany structure r inventry methdlgy ccur. 4
5 Nvember 2010 Cmpanies shall develp a base year emissins recalculatin plicy and clearly articulate the basis and cntext fr any recalculatins. Added guidance n duble cunting between cmpanies in a supply chain Chapter 10: Assurance Revised the chapter n assurance Included a new cncept f differentiating between data assurance and mdel assurance Chapter 11: Reprting Appendix A: Sample Scpe 3 Reprting Frm Appendix B: Accunting fr Emissins Frm Leased Assets Appendix C: Guidance fr Cllecting Data frm Suppliers Appendix D: Guidance n Uncertainty Appendix E: Data Management Plan Remved the requirement t separately reprt scpe 3 emissins by individual greenhuse gas Remved the requirement t separately reprt emissins by primary and secndary data, and instead nly t reprt the percentage f emissins calculated using primary data fr each categry Added requirements t reprt infrmatin abut (Tier 1) supplier emissins: Ttal supplier scpe 1 and scpe 2 emissins data, allcated t the reprting cmpany using a cnsistent metric and reprted separately frm the reprting cmpany s scpe 1, scpe 2 and scpe 3 emissins The methdlgy used t quantify and allcate supplier emissins data The percentage f Tier 1 suppliers accunted fr (as a percentage f the reprting cmpany s ttal spend) Revised the sample reprting template based n the updated reprting requirements Added guidance based n existing GHG Prtcl guidance n leased assets Added new guidance n internal planning and wrking with suppliers t cllect data Added new guidance n uncertainty in scpe 3 accunting Added new guidance n using a data management plan Glssary Updated several terms and definitins 5
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