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Corporate Emissions Inventory Module – A guide to corporate accounting and reporting standards GHG Protocol Initiative Corporate Accounting Standards - An Update June 12, 2003 Simon Schmitz World Business Council for Sustainable Development World Resources Institute
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Setting the scene Some background of the Initiative Convened in 1998 by WBCSD and WRI Mission: to develop international GHG accounting and reporting standards for business through an inclusive and transparent multi- stakeholder process 2 modules: corporate inventories & GHG mitigation projects
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GHG Protocol Standard Corporate module Project module Building a Credible Standard Adoption and Continuous Improvement Builds on Existing Approaches Multi – Stakeholder Process
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Businesses using GHG Protocol Alcan Aluminum, USA Alcoa, USA AstraZeneca, UK Ball Corporation, USA Baxter International, USA BP, USA Bethlehem Steel, USA Birka Energi, Sweden The Body Shop, UK Casella Waste Systems Inc., USA Cinergy, USA Eastman Kodak, USA FPL Group, Inc., USA CODELCO, Chile Edison Mission Energy, USA Ford, USA ENDESA, Spain Green Mountain Energy, USA Holcim, USA IBM, USA IKEA International, Sweden International Paper, USA Interface, USA ITC Inc., India Johnson & Johnson, USA Kansai Electric Power, Japan Lockheed Martin, USA Miller Brewing Co., USA Mirant, USA National Renewable Energy Laboratory, USA Nike, USA Norm Thompson Outfitters, USA Norsk Hydro, Norway N.V. Nuon Energy, Netherlands PWC, New Zealand PSEG, USA Pfizer Inc, USA SC Johnson, USA St Lawrence Cement Inc., USA Seattle City Light, USA Simplex Paper & Pulp, India Sony Electronics, Japan STMicroelectronics, Switzerland Suncor, USA Target Corporation, USA Tata Steel, India Tokyo Gas, Japan Verizon Communications, USA Volkswagen, Germany We Energies, USA 500 PPM GmbH, Germany Philips & Yaming, China
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Climate initiatives using GHG Protocol Government Initiatives U.S. Environmental Protection Agency Climate Leaders USAID Clean Technology Initiative and Greenhouse Gas Pollution Prevention Program California Climate Action Registry Wisconsin GHG Registry NGO Initiatives World Wildlife Fund Climate Savers Carbon Disclosure Project- 35 of the worlds largest investors with assets of more than $4.5 trillion have asked the world’s top 500 companies to quantify their GHG emissions using the GHG Protocol Global Reporting Initiative Climate Neutral Network Business Initiatives International Forum of Forest and Paper Associations Pulp & Paper Sector Calculation Tools Aluminium Institute Protocol & Calculation Tools International Iron and Steel Institute Calculation Tools (under development) Proposed WEF Global GHG Registry NZ Business Council for Sustainable Development Respect Europe Business Leaders Initiative for Climate Change (BLICC) WBCSD Sustainable Cement Initiative French REGES Protocol Trading Schemes Chicago Climate Exchange UK Emissions Trading Scheme EU Emissions Trading Scheme Other European, Japanese, Canadian, and Australian Cement Industry Associations European Bank for Reconstruction & Development
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Standards, Guidance and Calculation Tools Calculation tools Web-based, user- friendly, step-by-step guidance GHG Protocol Standards and Guidance 2 nd edition to be published in September
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Standards and Guidance: Table of Contents 1.Business Goals 2.Accounting Principles 3.Organizational Boundaries 4.Operational Boundaries 5.GHG Reductions and Offsets 6.Tracking Emissions Over Time (formerly “Setting a Historic Performance Datum”) 7.New Chapter: Voluntary GHG Targets 8.Identifying and Calculating GHG emissions 9.Managing inventory quality 10.Reporting GHG emissions 11.Verification ---- Possibly new Appendix: rough overview of issues in accounting for carbon stocks
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Standards Principles Organizational Boundaries Operational boundaries Historic Datum Reporting GHG emissions Accounting emissions from subsidiaries, JVs, etc. Based on financial accounting practices
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Producing the 2 nd Edition Setting Organizational Boundaries Overall framework remains same: two main accounting options for consolidation: Equity and Control Companies now have a choice to use either the control or the equity share approach More accurate definition of/criteria for control Some new/simpler definitions which need to be decided on Guidance on contractual arrangements and leasing provided
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Standards Principles Organisational Boundaries Operational boundaries Historic Performance Datum Reporting GHG emissions 3 scopes guarantee transparency: scope 1: Direct emissions (must report) scope 2: Indirect Emissions - imported electricity, heat, or steam (must report) scope 3: Other relevant indirect emissions (voluntary) Selection of scope/s depends on objectives of inventory (e.g. internal risk management vs. trading markets).
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Scope 2 definition changed to avoid double counting within Scope 2 emissions: emissions associated with production of electricity consumed by the reporting entity Emissions associated with transmission & distribution losses shall be reported by an entity that owns or controls the T&D equipment Producing the 2 nd Edition Setting Operational Boundaries – Scope 2
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Own use Resold to end-user Resold to intermediary Purchased Electricity Scope 2 Indirect emissions from Own Use of Purchased Electricity Scope 3 Indirect emissions from Purchased Electricity resold to end user Supplementary Information Emissions from Purchased Electricity resold to non end user
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Why set a GHG target? Steps in setting and reporting progress towards a GHG target 1. Obtain senior management commitment 2. Choose the target type (absolute vs. intensity) 3. Decide on the target boundaries 4. Decide on the use of external offsets 5. Choose a type of base year (fixed vs. rolling base year) 6. Decide on the level of reduction 7. Tracking GHG performance against target Producing the 2 nd Edition New Guidance chapter: Voluntary GHG targets
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Existing calculation tools Sector-specific tools aluminum pulp and paper iron and steel nitric acid ammonia adipic acid cement lime HCFC-22 semi-conductors Cross-sector tools Mobile and stationary combustion
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Updates of –International Forum of Forest and Paper Associations Pulp & Paper Sector Calculation Tools –Aluminium Institute Protocol & Calculation Tools –International Iron and Steel Institute Calculation Tools Guidance on choosing emissions factors, electricity flows, and CHP in the Stationary Tool GHG Guide for office-based organizations Uncertainty tool: quantifying measurement uncertainties Calculation Tools: new developments
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