sustainability metrics ghg management &...

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Sustainability MetricsGHG Management & Tracking


AgendaMonday, April 11, 2011 1:30 pm ‐ 3:00 pmTitle: Carbon Management & Sustainability Metrics• Data and Standards• Carbon Disclosure Project (CDP) – Supply Chain Questionnaire• Supply Partner Engagement – Challenges / Solutions

Tuesday, April 12, 2011 1:30 pm ‐ 3:00 pmTitle: Corporate Social Responsibility, Part 1 • GHG Emission Tracking• Suggestions on Data Management / Processes• Developing Management Plans & Targets


Context: Business Drivers

1. Physical – infrastructure / assets– supply chains / logistics

2. Regulatory– compliance– mitigation

3. Financial – cost of energy / raw materials – insurance premium

4. Brand Integrity – consumer expectations– pressure from civil society

Total Cost of Ownership = – regulatory compliance, – litigation,– impacts on production

costs, – market demand, – insurance, – Logistics & shipping

Climate Change Risks


Context: Climate Performance

• Carbon Disclosure Project– Backed with $71 trillion in assets from 551 global investors

• Ceres Climate Change Governance Checklist – Ranks 100 companies from most carbon‐intensive sectors

• Dow Jones Sustainability Index, Calvert Funds,– Voluntary participation in EPA program is one criteria for inclusion


Greenhouse Gas Emissions

Greenhouse Gas CO2 Equivalent Primary Source

Carbon dioxide (CO2) 1 Burning of fossil fuels, wood, fiber

Methane (CH4) 22 x CO2Agriculture; oil, coal, and gas production; animals (17%); rice paddies; Marshes (23%)

Nitrous oxide (N2O) 296 x CO2Dental anesthetic, food propellant, combustion of fossil fuels

CFC-12 6,600 x CO2Refrigerant

HCFC-22 1,350 x CO2Refrigerant

Sulfur hexafluoride (SF6)

23,900 x CO2Electrical Insulation – Gaseous Semiconductors-Dry/Plasma Etching

http://www.ipcc.ch

Anthropogenic sources


Greenhouse Gas EmissionsA Ton of CO2 is emitted when:

– Traveling 2,000 miles by air– Driving 1,350 miles in an SUV– Driving 1,900 miles in a mid‐sized car– Driving 6,000 miles in a hybrid car– Running an average US household for 60 days– Running your computer on for 10,600 hours– Grazing one dairy cow for eight months


Emission Sources


Monday, April 11, 2011 1:30 pm ‐ 3:00 pmTitle: Carbon Management & Sustainability Metrics• Data and Standards• Carbon Disclosure Project (CDP) – Supply Chain Questionnaire

• Supply Partner Engagement – Challenges / Solutions


• Created by CERES in 1997 • Standard for Sustainability Reporting• > 1,500 organizations from 60 countries• Indicator Protocols include:

– Economics– Environment– Human Rights– Labor Practices– Product responsibility– Society

Global Reporting Initiative


Global Reporting Initiative


Emissions Reporting• Reported information shall be “relevant, complete, consistent, transparent

and accurate.” • The GHG Protocol Corporate Standard requires reporting a minimum of:

– Description of company and inventory boundary– Scope 1 Direct Emissions – Scope 2 Indirect Emissions (Power / Electricity)

• Optional– Scope 3


Carbon Disclosure Project

• Independent, non‐profit since 2000• 551 institutional investors worth US$71 trillion• 3,00 of the world’s largest companies

– FT 500 ‐ largest globally based companies – S&P 500 ‐ largest US companies – FTSE 350 ‐ largest UK companies – 250 ‐ largest electric utilities

• Website is largest repository of corporate GHG emissions


Carbon Disclosure Project


CDP Supply Chain• Participation is increasing• Industry diversification


CDP Supply ChainFormal Strategy for Risk Management


Key Challenges

1. Supplier Engagement 2. Management of Data and Information,3. Education of Suppliers, 4. Engagement of Customers

– carbon footprinting was the most important challenge faced by respondents

– Transportation and logistics, water, energy, etc. formed a secondary tier of less challenging issues


Supplier Roadmap

• Strategic Awareness– Long Term Planning

• Carbon Reduction Ambitions

– Commitment to Reduction

• Reporting Capabilities– Emissions Intensity

• Implementation Practice– Strategy & Demonstrated

Reductions

• Strategic Awareness– Risk Analysis


– Emission Reduction Target

• Reporting Capabilities– Scope 1 & 2 emissions

• Implementation Practice

– Sr. Officer Accountable

• Strategic Awareness– Disclosure


– Links Business Strategy & Risk

• Reporting Capabilities– Scope 2 only

• Implementation Practice– Sr. Officer Accountable


Supplier Strategy

• Product Innovation• Win‐Win for suppliers and customer


Tuesday, April 12, 2011 1:30 pm ‐ 3:00 pmTitle: Corporate Social Responsibility, Part 1 • GHG Emission Tracking• Suggestions on Data Management / Processes• Developing Management Plans & Targets


Managing Corporate Climate Strategy• Measure

– Develop a comprehensive GHG inventory using appropriate software

– Develop internal process to update inventory in the future

• Report– Submit reports to voluntary GHG programs– Communicate GHG management efforts to stakeholders

• Manage– Set goals to reduce GHG emissions– Identify, evaluate, and implement cost‐effective opportunities– Prepare for future GHG regulation

Manage

Measure

Report


GHG Management Planning Process• Entity‐Wide GHG Inventory

• GHG Reduction Goal

• Inventory Maintenance System (IMS)

• Inventory Management Plan (IMP)

• Emissions Mitigation Analysis

• GHG Emissions Management Plan


Greenhouse Gas Inventory SummaryEnter into Climate Leaders Summary

Form

Source Type - Direct Emissions

CO2 ANNUAL EMISSIONS (metric

tons)

N2O ANNUAL EMISSIONS (metric

tons CO2-eq)CH4 ANNUAL EMISSIONS

(metric tons CO2-eq)

TOTAL EMISSIONS - Annual CO2-eq.

(metric tons)1.0 Stationary Combustion Sources 1,312 1 2 1,3152.0 Mobile Combustion Sources 0 0 0 03.0 Refrigeration / AC Equip. Use -- -- -- 474.0 GHG Use in Lab Operations -- -- -- 97

Source Type - Indirect Emissions


tons)





(metric tons)1.0 Purchased and Used Electricity 16,285 48 13 16,3452.0 Purchased and Used Steam 0 0 0 0

Source Type - Optional Emissions


tons)





(metric tons)1.0 Airplane Miles Traveled -- -- -- 4,6282.0 Employee Commute -- -- -- 4,230

Company Totalmetric tons CO2-eq/year 26,661


Standards of Accounting forGHG Emissions

“The GHG Protocol Initiative, a decade‐long partnership between the World Resources Institute and the World Business Council for Sustainable Development, is working with businesses, governments, and environmental groups around the world to build a new generation of credible and effective programs for tackling climate change.”


GHG Inventory Process


Organizational Boundary

Required (Scope 1 & 2) • 6 major GHGs • Direct emissions• Direct emissions owned & controlled by the organization

• Indirect emissions from electricity, heat, and steam

Optional (Scope 3)• Employee travel and commuting• Product transport


GHG Inventory &Energy Consumption

• GHG Inventory process enables comparison of energy consumption from dissimilar activities

Electricity 50%

Stationary Combustion

35%

Mobile Combustion3%

Commuting 11%

Fugitive Refrigerants

1%• GHG Inventory is largely comprised of energy consumed in campus owned/leased operations


Categorize and RankActivity Emission Source

Buildings‐Classroom/Office‐Laboratory‐Dormitory‐Gymnasium

ElectricityNatural gasPropane

Central Plant ElectricityNatural gasFuel oilCoal

Outdoor Lighting Electricity

Vehicle / Bus Fleet GasolineDiesel

Student/Staff Commuting GasolineDiesel

Paid Air Travel Jet Fuel

Fugitive Refrigerants from Use of Refrigeration and Air Conditioning Equipment

HFC and PFC Refrigerants

Office/Classroom Electricity

Dormitory Electricity

Gymnasium ElectricityOutdoor Lighting

Electricity

Dormitory Natural GasGymnasium Natural Gas

Central Plant Natural Gas

Central Plant Fuel Oil

Vehicle Fleet Gasoline

Bus Fleet DieselCommuting

Paid Air TravelFugitive Refrigerants


Financial Metrics• Return on Investment

• ROI; IRR; NPV; Payback

• Marginal Abatement Cost (MAC)

• Moving beyond traditional financial analysis Integrates the value of GHG emission reductions into energy‐related investment decisions

MAC establishes the implicit cost per tonne of GHG emission reductions

Calculate and rank the MAC for all GHG reduction projects

tCO2e$

ReductionGHG AnnualCosty Opportunit AnnualNet MAC ==


Business‐As‐Usual Forecast

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

GHG Emission

s (tCO2e

)

Electric Statioanry Fuels Vehicle Fleet Commuting Paid Air Travel Fugitive Refrigerants


Greenhouse Gas Master Plan

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

GHG Emission

s (tCO2e

)

GHG Inventory Existing Bldg EE LED Outdoor Lighting

Improve fleet fuel economy LEED NC Trigen Central Plant


Inventory Management Plan (IMP)Three critical components to a credible IMP:

1.Management Accountability2.Standard Operating Procedures for conducting an annual inventory

3.Transparent documentation


GHG Emissions ReductionsThree primary approaches1. Energy efficiency (facilities and processes)2. Travel reduction (commuting and business travel)3. Fuel switching (on‐site renewable projects or green

procurement)


GHG Reduction GoalsEvery company has a unique set of emissions sources and reduction opportunities.

The goal must be:• Corporate‐wide (domestic or global)• Based on the most recent base year for which data is available• Achieved over 5 to 10 years• Expressed as an absolute GHG reduction or as a decrease in GHG intensity• Aggressive compared to the projected GHG performance for the sector

Normalized vs. Absolute Targets:• Normalized GHG reduction targets allow for economic growth

– typically vs. units of production output or $ revenues• Absolute reduction targets can be tougher to achieve


Examples of Product LCAs


0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

Electronic Distribution Physical Media

CO2e/A

gree

men

t End of Life

Distribution

Materials

24 %

63 %

13 %

90 %

http://www.wspenvironmental.com/media/docs/en/demonstrating.the.benefits.of.esd.accenture.wsp.pdf

Results

91%em

ission reduction


Results

www.wspenvironmental.com/sustainMate

rials

Distrib

ution

End of

Life

Total

Product AProduct B-10,000

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

tCO

2eq

Em

issi

ons

Distribution CO2eq Emissions based on 10 million purchases

Results – Targeting Performance


Avoided emissions for product A is equivalent to:

Carbon sequestered in 3 trees in a 120 year old forest, in 1 year

Emissions from 1 gallon of gas

8,165 households electricity use for 1 year

245 acres of Amazon Rainforest

13,768 passenger cars not driven for one year

Avoided emissions for product B is equivalent to:

Perspective


Water Impacts ‐ Product Comparisons

Product Gallons1 cotton shirt 713Industrial Product per USD 80

1 kg leather 4,3851 Sheet of paper (A4) 3


Plastic 34%

Cardboard

27%

High Impact Polystyrene

3%

Steel,3%

Aluminium Alloy4%

Polyurethane,5%

Production of

Cardboard 9%

Injection moulding of Plastics8%

Steel Manufacturing,

5%

Product Water Impact

Product CO2e

Potato Chips (Walkers) 075 g CO2e / kg product

Newspaper 174 g CO2e / kg product

1 DVD with Packaging (News Corps) 679 g CO2e / kg product

1 L Bottle of Water (Fiji) 115 g CO2e

1 Load of Laundry (Tesco) 725 g CO2e

Thumb Drive 735 g CO2e

4 AA batteries in package 500 g CO2e

1/2 Gallon of Orange Juice (PepsiCo) 1,700 g CO2e

Gallon of Milk 3,175 g CO2e

6 pack of beer (New Belgium, Fat Tire) 3,189 g CO2e

Synthetic Running Socks 13,607 g CO2e

Jacket (Patagonia) 29,937 g CO2e

Running Shoes 64,863 g CO2e

Hiking Boots (Timberland) 79,379 g CO2e

Road Bicycle 1.5 metric tonnes CO2e

Mid‐sized sedan 63 metric tonnes CO2e

Product Carbon Footprint Comparison


LCA Overview


Product Carbon Footprint OverviewSupply Chain GHG analysis measuring the impacts over the product lifecycleIncludes specific processes, multiple sites, and multiple companiesFinal results can measure the impacts of GHG emissions as well as water use, waste outputs, and human and ecological impacts95% of companies who have reported GHG emissions are only accounting for their organizational emissionsPast 2 years product / supply chain GHG emissions reporting has dramatically increased even though:– There are no regulatory requirements (in the US)– Standard data collection and methods need refining


Commercial Drivers


Stakeholder Pressures

• Industry leadership and standards• Investor inquires (CDP)• Consumer Interest• NGO pressure and brand reputation • Design and innovation


Investor Interest• Unmanaged risks generally not being reported• Cost

– regulatory compliance, – litigation,– impacts on production costs, – market demand, – insurance, – Logistics & shipping

• Socially Responsible Investment – climate change as a leading indicator of corporate responsibility


Corporate GHG Inventory

Product or Supply Chain GHG Inventory

SupplyChain

ParticipantCompanies

Facility GHGInventory

SupplyChain

ParticipantCompanies

Product/SupplyChain Analysis

Corporate GHG Inventory vs. Supply Chain Reporting


Raw Materials

SuppliersManufacturing

Logistics

Retailers

Consumer

LCA Scope

EOL

Quantifies equivalent carbon emissions associated with an entire supply chain or a particular product lifecycle.

Lifecycle Encompasses Entire the Supply Chain


Methods & Standards

• WBCSD / WRI GHG Protocol Product Lifecycle• ISO 14044 Guidelines for LCA• GHG Protocol• BSI PAS 2050 • EIO – LCA Economic Analysis


Objectives for Carbon Footprinting


LCA ObjectivesProcess & Product Design• Material Substitution• Packaging Alternatives• DfECommunications & Environmental Claims

• ISO 14025• Carbon Labeling

Supply Chain and Logistic EfficienciesIdentify Potential RisksTarget Carbon Reductions


Calculating GHG’s and Aggregating Data

Secondary Data

Tools available in market:

Primary Data


Data Requirements & Collection


Data Collection

Data Type Source Unit Owner

Emission Factors Secondary IPCC / GHG Protocol; EcoInvent Database

Kg CO2 eq. WSP

BOM Primary Client Kg / Grams CLIENT

Supplier Logistics Primary Components Suppliers; Contract Manufacturers

Kilometers; mode

CLIENT

Process Energy Primary Contract Manufacturers kWh CLIENT

Distribution Logistics Primary; Secondary

3rd Party Distribution Kilometers; mode

CLIENTWSP

End of Life Secondary EcoInvent Database Kg CO2 eq. WSP

Process Map - Example

Plastic

Plastic, Metal, etc

Process Map ‐ Example

Box, flyers, plastic wrap, fill paper

Polycarbonate

XXX(XX, China)

XXX(XX, China)

(XX, China)

Packaging (XX, China)

Manufacturing(XX, China)

Ground: kmMarine: km

Ground: XX km

Ground: km Marine: km

Packaging(XX, XYZ?)

Logistics / Distribution(Los Angeles)

Ground: XX kmAir: XX km

Customer

Out of Scope In Scope Materials

Ground: kmMarine: km

Ground: XX km

Ground: XX km

Intermediate UPS / FedEx distribution

center


Project Management: Timeline, Tasks, & Cost


The Carbon Footprint ProcessCollect & analyze internal product data(e.g. Review BOM, supplier processes)Collect & analyze internal product data(e.g. Review BOM, supplier processes)

Build a Supply Chain Process Map(Raw materials to end of life)

Define Scope and Boundaries and ID data requirements

Collect data(Primary and Secondary)

Calculate GHG’s for each supply chainCalculate GHG’s for each supply chainprocess step

Aggregate Results / Scenario Analysis

1

2

3

4

5

6


Project Management – Tasks & Timeframes• Timeframe depends on client’s access to primary data

• Plan for 6 – 12 weeks depending on complexity


Time Commitment


Fee AssessmentBudget for LCA / Product Carbon Footprinting Services is based on the following factors:

• Client’s objectives & agreed upon deliverables – Internal LCA vs. peer reviewed LCA for public disclosure

• Project scale – Scope and Boundaries of the project as agreed upon at project start – Number of desired variables in the development of a carbon model – Product/Service quantity and complexity – Number of products / services to be analyzed – Number of assemblies and subassemblies in the product

• Depth of the Supply Chain – Similarities and differences within the supply chain / manufacturer

• Intensity of client support – Challenges anticipated in the data collection process – # of agreed upon meetings per month – Frequency & distance of travel required – Degree of data and assumption validation desired by client

Client is usually responsible for data collection and related discussions with supply chain partners.


Project Challenges• Availability of Primary Data• 3rd Party Supplier & Distributor Logistics• Budget• Internal Staff Availability• External Communications / Strategy• Integration of Results through Business


Environmental Product Declaration


Defining your Carbon and Energy

Risks

Implementing Low Carbon Strategies

Designing a Low Carbon Future

Capturing Business Opportunity

Quantification &Carbon FootprintingSustainability AssessmentsCompetitor BenchmarkingStakeholder SegmentationScenario Analysis & Risk ModellingRegulatory Assessment

Data Management & ReportingAction Planning & Program SupportStakeholder EngagementMarketing StrategyInternal & External Communications & Reporting

Sustainable Product DesignSustainability Master PlanningGreen Building DesignGreen ITRenewable Energy

Carbon & Energy Efficiency AuditsAccess Incentives & RebatesAdaptation PlanningTechnology ReviewsStrategy Planning


About WSP

2010 Revenue US$1.1 Billion

WSP is a leading global supplier of environmental, energy, and management consultancy services.

250 Offices;35 Countries

Projects in 60 countries



Our Clients


Thank YouChristopher J. KralWSP Environment & Energy405 Howard Street, Suite 310 San Francisco, California 94105Tel: +1 415.904.8470 x 111Mob: +1 415.271.8336

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