Greenhouse Gas Protocol Product & Supply Chain Initiative US Climate Partnership Association 23 June 2010 David Rich World Resources Institute

2  Convened in 1998 by  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 Greenhouse Gas Protocol Initiative

3 GHG Protocol Publications

4 4  The most widely used accounting tool for businesses to quantify, manage and report greenhouse gases  Used by majority of the S&P 500  Free standards and tools available at GHG Protocol Corporate Standard

5 5 Accounting for Corporate Emissions

6 6 Need for New Standards Need for an internationally standardized approach to measuring and reporting emissions in the value chain Requests for GHG data by business customers, investors & other stakeholders Inclusion of supply chain emissions in reporting & GHG reduction goals Corporate supply chain GHG management initiatives

7 7 New GHG Protocol Standards in Development Scope 3 (Supply Chain) Accounting & Reporting Standard Quantify and report major GHG emissions in the value chain (“scope 3”) at the corporate level Building on the GHG Protocol Corporate Standard Product Life Cycle Accounting & Reporting Standard Quantify and report life cycle GHG emissions at the product level Building on existing life cycle assessment methods

8 Standard Development Process WRI/WBCSD Secretariat Steering Committee (25 members) Product Technical Working Groups ( 100+ members) Scope 3 Technical Working Groups ( 60+ members) Stakeholder Advisory Group (1,200+) Product StandardScope 3 Standard Road Testing (70+ companies)  Independent, multi- stakeholder, open, inclusive process  Participation from businesses, governments, NGOs, and academic institutions worldwide  Over 1,000 stakeholders involved

9 Timeline 9 DateActivity November 2007 Survey and consultations to assess need for new standards September 2008 Steering Committee Meeting #1 Technical Working Group Meeting #1 January 2009 Working groups begin drafting August 2009 Stakeholder webinar and comment period November - December 2009 First draft of standards released for stakeholder review 5 stakeholder workshops (in China, Germany, UK, and US) Public comment period on first drafts January - June 2010 Road testing by over 70 companies September 2010  Public comment period on second drafts December 2010  Finalize standards

10 Understand risks and opportunities in the value chain Identify and prioritize GHG reduction opportunities in the value chain Engage partners to achieve GHG reductions throughout the value chain Establish baselines, set reduction targets and track performance Enable credible disclosure and reporting to stakeholders Business Uses of New Standards

11  Purpose: To quantify and report product-level emissions  Applicable to all types of goods and services  The overarching method for accounting for product GHG emissions is a life cycle approach  Includes all stages of the life cycle, from cradle to grave GHG Protocol Product Life Cycle Standard Raw Material Acquisition Production Distribution & Retail UseEnd of Life

12 Define Business Goals Map the Value Chain Set the Boundary Collect Data Calculate Emissions Report Emissions Steps in Scope 3 Accounting and Reporting Steps in Accounting & Reporting

13 Upstream Scope 3 Emissions from Purchased Products Production of Purchased Goods & Services Energy-Related Activities (Not Included in Scope 2) Production of Capital Equipment Transportation & Distribution of Purchased Products Waste Generated in Operations Business Travel Leased Assets Investments Downstream Scope 3 Emissions from Sold Products Transportation & Distribution of Sold Products Use of Sold Products Disposal of Sold Products Franchises Leased Assets Other Scope 3 Emissions Employee Commuting GHG Protocol Scope 3 Standard

Direct Suppliers Reporting Company VALUE CHAIN Cradle Grave Emissions from Purchased Products Emissions From Sold Products Gate Raw Materials Energy Capital Equipment Transportation Product Distribution Product Use Product Disposal Scope 2 and 3 Upstream Scope 3 Downstream Scope 1 PurchaseSale Emissions from the Company’s Operations Waste Services

15 What do you include in your inventory? Boundaries When should you collect actual data from suppliers? When should you use generic industry- average data? Data How do you allocate emissions between multiple suppliers, products, and customers? Allocation When should you account for downstream emissions (product distribution, use & disposal)? Downstream Emissions How should emissions be reported? Reporting Key Issues

16  Over 70 companies are road testing the draft standards  More than 20 sectors and 17 countries  Purpose: Ensure standards can be practically implemented Road Testing 16

17 Sample of Road Testing Companies 17

18 How to Participate  Provide feedback on draft standards in September  For more information and to download free standards & tools:  Contact:David Rich World Resources Institute Phone: