CO2 EMISSIONS SCOPE 3

Transcription

1 CO2 EMISSIONS SCOPE 3 G4 Indicators: G4-DMA, G4-EN17, G4-EN19 The purpose of this document is to summarize the environmental impact of Sanofi s Scope 3 emissions and provide transparency in its calculation methodologies. Scope 3 greenhouse gas (GHG) emissions are indirect emissions from activities in areas that Sanofi does not own or control. Examples include business travel, commuting, supply chain (procurement), and waste disposal. With the recent release of the Corporate Value Chain (Scope 3) Accounting and Reporting Standard by WRI and WBCSD, Sanofi has expanded its GHG inventory to include Scope 3 emissions across its entire value chain. Calculating Scope 3 emissions is important because despite the data-collection barriers, these emissions may represent up to 90% of Sanofi s total GHG emissions. The reporting period is set by Sanofi in order to correspond to the rest of the environmental reporting. As such, for 2016, the reporting period goes from October 1, 2015 to September 30, I. CONTEXT In the past, Sanofi has addressed Scope 3 emissions in a limited fashion. For example, we worked with the French pharmaceutical trade association (LEEM) to consistently apply the GHG Protocol to pharmaceutical companies at a site level. Sanofi also calculated Scope 3 emissions from a small part of the company. In 2015 and 2016, Sanofi worked in collaboration with an expert third party to estimate the company s Scope 3 emissions based on a robust methodology. Sanofi has assessed the specific categories listed in the GHG Protocol by: Focusing on the most representative and manageable emissions, within an exhaustivity framework Using robust datasets, emissions factors and methodologies to convert those data into powerful and relevant values This document explains the methodologies and assumptions made for each Scope 3 CO 2 emissions category according to the GHG Protocol. In 2016, Sanofi s total Scope 3 CO 2 emissions amounted to 8,732,292 tco 2e, representing 90% of its global CO 2 emissions worldwide. Figure 1 - Scope 3 categories Figure 2 - Scope 1, 2 and 3 emissions (including Merial). Scope 1 & 2 emissions were calculated with the same assumptions as for Scope 3 emissions, including emissions coming from sales representatives vehicles and from tertiary sites. published in May 2017 Page 1 of 7

2 Category Description of the method Source of information Upstream GHG emissions (including Merial) 1 Purchase of goods and services 2 Capital assets Fuel- and energyrelated activities Upstream transportation and distribution Waste generated in operations 6 Business travel 7 8 Employee commuting Upstream leased assets Calculation based on reliable activity data for the goods and services Expenses for all items of the Manufacturing Capex family Use of data related to energy consumption from industrial and R&D sites and assumptions to calculate emissions from the tertiary sites Calculation based on reliable activity data such as distance between Sanofi sites, center sites and their main suppliers Raw data reported by industrial and R&D sites, in metric tons broken down for each waste categories Based on global distance travelled by type of transport, and including hotel nights incurred during business travel Details on the number of employees per site combined with a survey Economic data from the purchase Economic data from the purchase Environmental Supply chain Environmental Purchase and mileage sent by travel agencies International social report and facility management mapping (1) 4,746,971 (b)&(c) 6,074, ,634 (c) 455, ,035 (b)&(d) 682, ,194 (d) 263, ,633 (d) 445, ,259 (b) 101, ,811 (d) 103,264 Included in Scope 1 & 2 (for energy use) N.A. (e) NA Downstream GHG emissions (including Merial) Downstream transportation and distribution Processing of sold Use of sold End-of-life treatment of sold Amount and location of all distribution centers used by Sanofi, distances and transportation modes of the sold Amount of APIs and semi-finished sold to other companies has been used, modeled, and evaluated thanks to several steps of calculation and hypothesis Assumptions based on primary data, including distances travelled, energy consumption for refrigeration, and the nurse s injection habits French collection efficiencies have been used and extrapolated worldwide since information on other countries are difficult to gather 452,584 (b)&(c) 444,777 Sanofi turnover 184,211 (b) 15, ,707 (d) 555,944 Purchase 261,253 (c) 71, Downstream leased assets Not relevant for year 2015 N.A. (e) N/A 14 Franchises Sanofi does not operate franchises Sanofi turnover N.A. (e) N/A 15 Investments Included in other categories when relevant N.A. (b)&(f) 640,000 Total Scope 3 8,732,292 9, 854, 984 (1) Published full Scope 3 emissions, completed in 2017 on 2016 data. New tool for Scope 3 emissions calculation based on recognized methodology and developed by an expert third party. (b) change in the calculation methodology (c) qualitative measurement improvement (d) activity variation (e) not significant (f) This category applies to investors. Sanofi owns actions in companies that are customers or suppliers of Sanofi. The emissions generated by the and services from those collaborations are already accounted for in other categories. In 2016, in order to avoid double counting, the 15th category is considered as not applicable. published in May 2017 Page 2 of 7

3 Reliability of the data and methodology used for the different categories: Scope 3 category Level of contribution Quality of data sources Quality of the modeling & calculations Exhaustiveness 1. Purchased goods and services Capital goods Fuel- and energy-related activities (not included in Scope 1 or 2) Upstream transportation and distribution Waste generated in operations Business travel Employee commuting Upstream leased assets N.A. N.A. N.A. N.A. 9. Downstream transportation and distribution Processing of sold Use of sold End-of-life treatment of sold Downstream leased assets N.A. N.A. N.A. N.A. 14. Franchises N.A. N.A. N.A. N.A. 15. Investments N.A. N.A. N.A. N.A. Captions: 1. Level of contribution: Relative contribution of the category to the total Scope 3 emissions +++: Very high contribution ++: Significant contribution +: Small contribution 2. Quality of data sources: Robustness of the data used for the calculation of Scope 3 emissions +++: Excellent quality (primary data mostly) ++: Good quality (primary data when possible, estimations/hypotheses for other aspects) +: Fair quality (mainly based on assumptions or public information) 3. Quality of the modeling and calculations: Robustness of the hypothesis and emission factors used for the calculation of Scope 3 emissions +++: Excellent quality (almost no simplification, very precise modelling, adequate emission factors) ++: Good quality (adapted modelling, some simplification when necessary, proxies used for some of the calculations) +: Fair quality (mainly based on assumptions or public information) 4. Exhaustiveness: Representativeness and relevance of the calculations to the overall category of the Scope 3 emissions +++: Very good exhaustiveness (calculations represent the overall category, for the most part without any gaps) ++: Good exhaustiveness (fairly complete representativeness of calculations for the category; some simplification) +: Fair exhaustiveness (the completeness of the modelling may not be optimal at all times) published in May 2017 Page 3 of 7

4 1. Purchased goods and services 4,746,9 2. Capital goods 696,634 Definition: This category includes all upstream (i.e., cradle-togate) emissions from the manufacture of purchased or acquired by the reporting company: active pharmaceutical ingredients, intermediates, reactive compounds and excipients, chemical raw materials, packaging materials, other industrial purchases, office supplies, services. Status and methodology: The purchased items, sorted into 1225 families, are modelled using a pool of 95 different emission factors coming from the Ecoinvent v2.2. The collected information has focused on the type and mass of each product purchased for the reference period. Units of gathered data have been converted into adequate units for the calculation of the carbon footprint, using assumptions and internal Sanofi knowledge. A specific model for items related to subcontracting has been built based on internal Sanofi data. The overall quality of the results for this category is considered as medium to high. The exhaustiveness is indeed extremely comprehensive; however, improvements can still be made on the conversion factors applied to the reported quantities, and on the emission factors chosen. Significant improvements have been made during this year s reporting, especially with regards to the modelling of specific types of items. Graph: Breakdown of Sanofi emissions by purchase category Definition: This category includes all upstream (i.e., cradle-togate) emissions from the production of capital goods purchased or acquired by the reporting company. The method used here is the average spend-based method, which involves estimating emissions for goods by collecting data on the economic value of goods purchased and multiplying by relevant secondary (e.g., industry average) emission factors (e.g., average emissions per monetary value of goods). Status and methodology: Expenses for all items of the Manufacturing Capex family have been collected through the procurement s. Financial amounts (in euros) are reported according to categories and sub-categories, themselves being associated with the adequate emission factor. Forty capital goods families have been identified to represent Sanofi capital goods data. The overall quality for this category is considered as medium to high. Improvements may be possible by improving the used for the modelling, as well as by working with procurement to ensure factors are consistent with the data. The modelling has been improved this year, with an increase in the number of families used to represent Sanofi data. 3. Fuel- and energyrelated activities 605,035 Definition: This category includes emissions related to the production of fuels and energy purchased and consumed by the reporting company in the reporting year, which are not included in the direct emissions (Scope 1) and indirect emissions (Scope 2) categories. Status and methodology: Scope 3 emissions in this category integrate all emissions of the life cycle of fuels, except the ones related to combustion: extraction, production, and transportation of fuels that are combusted at Sanofi s sites, as well as transmission losses during distribution. Sanofi consolidates data related to energy consumption on its industrial and R&D sites using the SWORD reporting software, and uses this data to compute Scope 1 & 2 emissions. For all tertiary sites, some assumptions have been made to calculate the emissions. The energy-consumption data used for this calculation are consolidated at corporate level and then validated by an external auditor. Emission factors for this category come from GHG Protocol or IEA The overall quality for this category is considered as medium to high. Possible levers of improvement include using energy consumption for all tertiary sites, and improving the robustness of some emissions factors. published in May 2017 Page 4 of 7

5 4. Upstream transportation and distribution Definition: This category includes emissions from the transportation and distribution of (excluding fuel and energy ) purchased or acquired by the reporting company in vehicles and facilities not owned or operated by the reporting company, as well as other transportation and distribution services purchased by the reporting company (including inbound and outbound logistics). Status and methodology: For emissions related to the transportation of sold paid for by Sanofi (inbound logistic and outbound logistic to wholesalers), the model relies on GHGemissions provided by the top five forwarders, as well as the GHG-emissions tracking performed by the Supply Chain department, which estimates GHG emissions based on primary activity data such as tons per kilometer of product transport. Estimations are made to cover some data gaps, especially regarding raw materials supply. The overall quality of this evaluation is considered as medium to high. Some levers of improvements could be applied to help fix these limitations, such as by obtaining primary data for other parts of the Supply, or other Sanofi activities. 5. Waste generated in operations 213, ,633 Definition: This category includes emissions from third-party disposal and treatment of waste that is generated in the reporting company-owned or controlled operations. This category includes emissions from disposal of both solid waste and wastewater. Only waste treatment in facilities owned or operated by third parties is included in Scope 3 emissions. Status and methodology: The information consolidated for this category concerns the amount of waste produced by each site, and type of treatment performed. It is directly consolidated in Sanofi reporting for industrial and R&D sites. The split between hazardous and non-hazardous waste is not provided by the reporting tool, hence an assumption is made with emission factors coming from the Ecoinvent v2.2. The overall quality of this evaluation is considered as medium. Improvements could be made with a better assessment of the waste generated on tertiary sites, as well as wastewater treatment options, and by obtaining more details about the types of waste, in order to adapt the emission factors. 6. Business travel 110,259 Definition: This category includes emissions from the transportation of employees for business-related activities in vehicles owned or operated by third parties, such as aircrafts, trains, buses, and passenger cars. Status and methodology: For all Sanofi entities (including Genzyme, Merial and Pasteur), distances and associated CO 2 emissions for air travel for 14 Sanofi countries have been consolidated, representing 90% of all Sanofi air travel. Distances and associated CO 2 emissions for rail travel have also been obtained. The number of total hotel nights incurred during business travel for Sanofi was collected to determine their environmental impact. Lastly, the number of car rentals was obtained. Sales representative travel when not by car was included using assumptions based on modes of transportation and estimates of distances travelled. The overall quality of this evaluation is considered as medium. Improvements could be made by collecting non-consolidated data, data from other countries when relevant, and more specific data regarding sales representatives. 7. Employee commuting 102,811 Definition: This category includes emissions from employees travelling between their home and workplace. Employee commuting at the reporting company includes car, bus and rail travel. Status and methodology: The number of employees per site, for all Sanofi sites worldwide, was obtained and combined with the results of a survey specifically conducted for the purpose of this study. Respondents from 35 sites in 17 countries and 5 continents answered the questionnaire, and it is representative of the commuting habits of 10,300 Sanofi employees. Employee commuting does not include travel by sales representatives, and the distinction has been made between sales reps and other types of employees. Non-country specific emission factors come from the Ecoinvent v2.2. The overall quality of this evaluation is considered as high. Improvements could be made by collecting additional responses to the survey. 8. Upstream leased assets N/A Definition: This category includes emissions from the operation of assets that are leased by the company and not already included in our Scope 1 or Scope 2 inventories. This category is mostly applicable to companies that operate leased assets (i.e., lessees), but can also be applicable to all companies leasing assets. Status and methodology: Sanofi includes all leased assets in Scope 1 & 2 emissions inventory, even leased cars used by sales representatives. This category is not relevant for Sanofi in published in May 2017 Page 5 of 7

6 9. Downstream transportation and distribution 452,584 Definition: This category includes emissions from transportation and distribution of sold by the reporting company between its operations and the end consumer, if not paid for by the reporting company, in vehicles and facilities not owned or controlled by the reporting company. Transportation of finished to final customers is considered paid by the reporting company, hence integrated in category 4. Status and methodology: Sanofi emissions accounted for in this category are emissions from customers going to and from hospitals/doctors/pharmacies to obtain the, and refrigeration during distribution and storage. Hypotheses have been made to evaluate the distances and transportation modes for the patients to go to the pharmacy/hospital, and the energy consumption related to refrigeration of some types of. The emission factors that are used come from the Ecoinvent v2.2. The overall quality of this evaluation is considered as low to medium. Improvements could be made by gathering more primary data, and more information about some steps of the distribution. 10. Processing of sold 184,211 Definition: This category includes emissions from processing of intermediate by third parties (e.g., manufacturers) after being sold by the reporting company. Intermediate are that require further processing, transformation, or inclusion in another product before use, and therefore result in emissions from processing subsequent to sale by the reporting company and before use by the end consumer. Status and methodology: Sanofi produces APIs that are sold to other pharmaceutical companies, which manufacture final medicines using those APIs. The GHG emissions related to the processing of these APIs into final medicines at customers plants is part of this category. Sanofi also produces semi-finished that are sold to other pharmaceutical companies, which package these semi-finished before selling the final to end users. Amounts of APIs and semi-finished sold to other companies have been collected from Sanofi and combined with the emissions that occur when processing API and semi-finished into final medicines, obtained from Sanofi as a proxy. The overall quality of this evaluation is considered as medium. Improvements could be made by finding even more appropriate proxies while still using Sanofi data (country, type of product, etc.), and even by collecting primary data directly from third parties. 11. Use of sold 904,707 Definition: This category includes emissions from the use of goods and services sold by the reporting company in the reporting year. The Scope 3 emissions from use of sold include the Scope 1 and Scope 2 emissions of end users. End users include both consumers and business customers that use final. Status and methodology: Sanofi may result in GHG emissions during use in three main cases: refrigeration of some before use (all injected, vaccines from Pasteur & Merial), direct emissions of propellant gases during the use of inhalers and nurses traveling to deliver to the patient. Several assumptions based on primary data collected within Sanofi have been made, including distances travelled, energy consumption for refrigeration, and the nurse s injection habits. All the emissions factors used are taken from the Ecoinvent v2.2. The overall quality of this category is considered as medium, and the main levers of improvement concern more specific data to avoid the combination of different assumptions. 12. End-of-life treatment of sold 261,253 Definition: This category includes emissions from the waste disposal and treatment of all sold by the reporting company at the end of their life, during the reporting year. For Sanofi, this category includes the emissions related to the end-oflife phase for both packaging and unused medicines. Status and methodology: Information related to unused medicines is difficult to gather since it depends on the country and consumers habits. In France, Cyclamed is responsible for collecting and disposing of unused medicines appropriately. Similar organizations might exist in other countries, but not in every country. French collection efficiencies have been used and extrapolated worldwide to estimate the quantities of unused medicines that end up in public waste collection systems. Regarding the end-of-life of packaging, purchasing data were used and waste was assigned to one of six categories. Treatment of waste is a fair mix of incineration and landfilling, since the country of use of medicines is not known. The Ecoinvent v2.2 emission factors are determined based on the type of packaging material and the type of treatment. The quality of this category is considered as medium. Potential levers of improvement would include better insights on which purchased packaging is indeed sold as part of final, as well as national statistics regarding medicines end-of-life handling and disposal. published in May 2017 Page 6 of 7

7 13. Downstream leased assets N/A Definition: This category is applicable to lessors, i.e., companies that receive payments from lessees. This category includes emissions from the operation of assets that are owned by the reporting company, acting as lessor, and leased to other entities in the reporting year that are not already included in Scope 1 or Scope 2. Status and methodology: Sanofi includes all leased assets, if any, in the Scope 1 & 2 emissions inventory. Therefore, this category is not relevant for Franchises N/A Definition: This category includes emissions from the operation of franchises not included in Scope 1 or Scope 2 emissions. A franchise is a business operating under a license to sell or distribute another company s goods or services within a certain location. This category is applicable to franchisors, i.e., companies that grant licenses to other entities to sell or distribute its goods or services in return for payments, such as royalties for the use of trademarks and other services. Franchisors should account for emissions that occur from the operation of franchises (i.e., the Scope 1 & 2 emissions of franchisees) in this category. Status and methodology: Sanofi does not operate franchises. Therefore, this category is not relevant in Investments N/A Definition: This category includes emissions associated with the reporting company s investments in the reporting year, not already included in Scope 1 or Scope 2. This category is mostly applicable to investors, i.e., companies that invest in order to make a profit, and companies that provide financial services. Status and methodology: Sanofi has acquired shares in various other companies. However, the companies in which Sanofi owns shares are also suppliers or customers, which means that these companies emissions in connection with Sanofi s activities are already accounted for in other categories (purchased goods and services, energy, processing of sold, etc.). In order to avoid double counting, this category is considered not relevant. For more information, see the Carbon Footprint : CO2 emissions - scope 1&2 factsheet in our Download Center published in May 2017 Page 7 of 7