6.3 Upstream Emissions
6.3.1 Category 1 — Purchased Goods and Services
6.3.1.1 Description and Minimum Boundary
Table 5.4 of the Scope 3
Standard describes Category 1 and its minimum boundary as follows:
Scope 3 Standard, Chapter 5,
“Identifying Scope 3 Emissions,” Page 34
Table 5.4 Description and
Boundaries of Scope 3 Categories
Upstream Scope 3 Emissions
|
Category
|
Category Description
|
Minimum Boundary
|
|---|---|---|
|
1. Purchased goods and
services
|
|
|
The Category 1 minimum boundary, defined above, includes all “cradle-to-gate”
GHG emissions of purchased goods and services except those specifically
included in another upstream Scope 3 category. Category 1 is one of several
upstream Scope 3 categories associated with cradle-to-gate GHG emissions,
which the Scope 3 Standard defines as “all emissions that occur in the life
cycle of purchased products, up to the point of receipt by the reporting
company (excluding emissions from sources that are owned or controlled by
the reporting company).” The Scope 3 Standard lists the following examples
of activities that generate cradle-to-gate GHG emissions:
-
“Extraction of raw materials.”
-
“Agricultural activities.”
-
“Manufacturing, production, and processing.”
-
“Generation of electricity consumed by upstream activities.”
-
“Disposal/treatment of waste generated by upstream activities.”
-
“Land use and land-use change.”
-
“Transportation of materials and products between suppliers.”
-
“Any other activities prior to acquisition by the reporting company.”
Connecting the Dots
The “cradle” is the starting point of what are
referred to as “life cycle” emissions and is the point at which the
raw materials were acquired or generated. To further clarify the
starting point, a reporting company considers the upstream GHG
emissions of the raw materials it has purchased from its Tier 1
supplier, and the Scope 1 and Scope 2 emissions of the Tier 1
supplier are reflected in the supplier-specific emission factors
that the reporting company collects. In other words, the Tier 1
supplier’s GHG emissions capture the GHG emissions generated from
any of the inputs the Tier 1 supplier uses in production of the
items supplied.
While it is relatively straightforward to identify the point in time
representing the cradle, identifying the “gate” depends on which
party is responsible for the inbound transportation and
distribution. Since the gate represents “the point of receipt by the
reporting company (excluding emissions from sources that are owned
or controlled by the reporting company),” the reporting company must
consider which party is paying to transport the purchased goods to
its location. If the supplier pays to have purchased goods shipped
to the reporting company, the gate would be at the buyer’s location
and the inbound transportation GHG emissions would fall within
Category 1 for the reporting company. Conversely, if the reporting
company pays for the shipping, the gate would be at the shipping
point and the inbound transportation GHG emissions would be reported
in Category 4 rather than Category 1 (see Section 6.3.4 for further discussion of Category
4).
It is important to note that Category 1 excludes GHG emissions that
are specifically accounted for in another upstream Scope 3 category.
As further illustrated in the next sections, there are exclusions
for certain upstream emissions occurring in the life cycle of
purchased products that are accounted for in a separate category.
Thus, Category 1 can be considered a residual category to capture
all remaining life cycle Scope 3 emissions that are outside the
scope of Categories 2 through 8.
6.3.1.2 Technical Calculation Guidance
To calculate GHG emissions for the Scope 3 categories, companies need (1)
emission data or (2) activity data and emission factors. Activity data
correspond to the quantities or units of goods purchased, and the emission
factors are required to convert activity data to emission data. The types of
activity data and emission factors to be used depend on the GHG emission
calculation method.
In the simplest terms, the
overall formula for calculating the GHG emissions to be included for an
activity is as follows:
However, the basis for the activity data and how they are derived, as well as
the nature and source of the emission factor, vary greatly. The discussions
below address the methods that can be applied to the formula above depending
on the emission category, type of emission activity within the category, and
availability of data.
While one method may be more accurate than another, companies may also
consider the relative size of the emissions from each activity, data
quality, and the level of effort each method requires. Companies will need
to use judgment to determine which calculation method to use for each
emission activity and whether to use multiple methods within each
category.
The Scope 3 Technical Guidance provides calculation methods for each
category, and they are listed in order from most specific to a company’s
activities to least specific. As noted in the Scope 3 Technical Guidance,
the specificity of a method does not necessarily correlate with the method’s
accuracy. For certain Scope 3 categories, the Scope 3 Technical Guidance
provides a decision tree to help companies select a calculation method.
Decision trees adapted from those in the Scope 3 Technical Guidance are
included in the discussions below.
Acceptable methods for
calculating Category 1 emissions are described in the Scope 3 Technical
Guidance as follows:
Scope 3 Technical Guidance, Category 1, “Purchased
Goods and Services,” Page 21
Summary of Methods for Calculating Emissions From
Purchased Goods and Services . . .
-
Supplier-specific method — collects product-level cradle-to-gate GHG inventory data from goods or services suppliers.
-
Hybrid method — uses a combination of supplier-specific activity data (where available) and secondary data to fill the gaps. This method involves:
-
collecting allocated scope 1 and scope 2 emission data directly from suppliers;
-
calculating upstream emissions of goods and services from suppliers’ activity data on the amount of materials, fuel, electricity, used, distance transported, and waste generated from the production of goods and services and applying appropriate emission factors; and
-
using secondary data to calculate upstream emissions wherever supplier-specific data is not available.
-
-
Average-data method — estimates emissions for goods and services by collecting data on the mass (e.g., kilograms or pounds), or other relevant units of goods or services purchased and multiplying by the relevant secondary (e.g., industry average) emission factors (e.g., average emissions per unit of good or service).
-
Spend-based method — estimates emissions for goods and services by collecting data on the economic value of goods and services purchased and multiplying it by relevant secondary (e.g., industry average) emission factors (e.g., average emissions per monetary value of goods).
The decision tree below,
which is reproduced from Figure 1.2 of the Scope 3 Technical Guidance, can
help reporting companies select a method for calculating such GHG
emissions.
Scope 3 Technical Guidance, Category 1, “Purchased
Goods and Services,” Page 23
Figure 1.2 Decision Tree for Selecting a
Calculation Method for Emissions From Purchased
Goods and Services
6.3.1.2.1 Supplier-Specific Method
Under the supplier-specific method, a reporting company uses the quantities
of goods or services purchased and a cradle-to-gate, supplier-specific
emission factor. While this method is the most accurate, it relies on the
availability of the supplier’s emission factor.
The formula for calculating
Category 1 emissions under the supplier-specific method is shown below.
Scope 3 Technical Guidance, Category 1, “Purchased
Goods and Services,” Page 24
Calculation Formula 1.1 Supplier-Specific
Method
6.3.1.2.2 Hybrid Method
Under the hybrid method, activity data are disaggregated into the
individual activities in the life cycle of the purchased good or
service. The hybrid method requires a reporting company to perform
additional steps to determine the activity data for each disaggregated
input. In addition, a reporting company that uses this method is
required to collect multiple emission factors to cover each activity
within the cradle-to-gate perimeter, whereas a reporting company that
uses any of the other calculation methods would apply a single
cradle-to-gate emission factor to total activity.
The formula for
calculating Category 1 emissions under the hybrid method when
supplier-specific data are available for all activities associated with
producing the purchased goods is shown below.
Scope 3 Technical Guidance, Category 1,
“Purchased Goods and Services,” Page 27
Calculation
Formula 1.2 Hybrid Method (Where Supplier-Specific
Activity Data Is Available for All Activities
Associated With Producing the Purchased
Goods)
As reflected in the formula above, some emission factors are collected
from the suppliers (supplier-specific) and others are obtained from
secondary sources (e.g., industry average, grid average). See Table 7.4
in the Scope 3 Standard for examples of primary and secondary data by
Scope 3 category.
For an illustration of how the hybrid method may be used to calculate
Category 1 emissions, see Example 1.2 of the Scope 3 Technical Guidance
(reproduced in Section 6.3.1.3), in
which supplier-specific emission factors are available for all
activities and secondary data are not used.
6.3.1.2.3 Average-Data Method
Like calculations performed under the supplier-specific method, those
performed under the average-data method are based on the use of the
total amount of purchased goods and services. However, the two methods
differ in that the hybrid method breaks down the purchased good or
service into the individual inputs, whereas the average-data method uses
the total activity amount (quantity or other unit of measure). In
addition, while the hybrid method can use supplier-specific or secondary
emission factors, the average-data method only uses emission factors
from secondary sources.
The formula for
calculating Category 1 emissions under the average-data method is shown
below.
Scope 3 Technical Guidance, Category 1,
“Purchased Goods and Services,” Page 32
Calculation Formula 1.4 Average-Data
Method
6.3.1.2.4 Spend-Based Method
The spend-based method can be used when data limitations make the other
calculation methods impractical. Under this method, reporting companies
use the total amount spent on purchased goods or services and a
secondary cradle-to-gate emission factor per unit of economic value.
The formula for
calculating Category 1 emissions under the spend-based method is shown
below.
Scope 3 Technical Guidance,
Category 1, “Purchased Goods and Services,” Page
33
Calculation Formula 1.5
Spend-Based Method
6.3.1.3 Practical Examples
Example 1.2 of the Scope 3 Technical Guidance, which is reproduced below,3 illustrates how a reporting company may calculate Category 1 emissions
under the hybrid method.
Scope 3 Technical Guidance, Category 1, “Purchased
Goods and Services,” Pages 27–29
Example 1.2 Calculating Emissions From Purchased
Goods Using the Hybrid Method
Example 1.4 of the Scope 3 Technical Guidance, which is reproduced below,
illustrates how a reporting company may calculate Category 1 emissions by
using a combination of the average-data method and the spend-based
method.
Scope 3 Technical Guidance, Category 1, “Purchased
Goods and Services,” Pages 34–35
Example 1.4 Calculating Emissions From Purchased
Goods and Services by Using a Combination of the
Average-Data Method and the Spend-Based
Method
6.3.2 Category 2 — Capital Goods
6.3.2.1 Description and Minimum Boundary
Table 5.4 of the Scope 3 Standard describes
Category 2 and its minimum boundary as follows:
Scope 3 Standard, Chapter 5, “Identifying Scope 3
Emissions,” Page 34
Table 5.4 Description and Boundaries of Scope 3
Categories
Upstream Scope 3 Emissions . . .
|
Category
|
Category Description
|
Minimum Boundary
|
|---|---|---|
|
2. Capital goods
|
|
|
The minimum boundary of Category 2 is all upstream (cradle-to-gate) GHG
emissions of purchased capital goods. Like Category 1, Category 2 includes
the cradle-to-gate GHG emissions generated in the production of purchased
goods. However, Category 2 includes the GHG emissions of purchased capital
goods rather than those of noncapital goods.
The Scope 3 Standard defines capital goods as “final products that have an
extended life and are used by the company to manufacture a product, provide
a service, or sell, store, and deliver merchandise.” In addition, the Scope
3 Standard clarifies that a reporting company’s financial accounting policy
for classifying an asset as property, plant, and equipment can be used to
determine whether to account for a purchased good in Category 2 (capital
goods) or Category 1 (noncapital goods). For example, fixed assets such as
computer equipment or vehicles would be reported in Category 2, whereas
supplies and raw materials would be reported in Category 1.
Connecting the Dots
Certain capital goods, such as vehicles or machinery used in a
manufacturing process, may be emission-generating. It is important
to differentiate GHG emissions generated during the production of
the asset from GHG emissions generated by the asset. GHG emissions
generated to produce an asset are included in the cradle-to-gate
emissions and are recognized entirely in the year in which the
reporting company purchases the asset, whereas GHG emissions
produced by the asset during its use are included in the reporting
company’s Scope 1 or Scope 2 inventory over the asset’s life as the
emissions are generated. See Chapters
4 and 5 for
discussion of the GHG emission activities included in Scopes 1 and
2.
6.3.2.2 Technical Calculation Guidance
The acceptable methods and technical calculation guidance for Category 2 are
consistent with those for Category 1. See Section
6.3.1.2 for more information.
6.3.2.3 Practical Example
The example below illustrates how a reporting company may calculate Category
2 emissions under the hybrid method by using both supplier-specific and
secondary emission factors. Note that the activity data and emission factors
in the example are illustrative only and do not refer to actual data.
Example 6-6
Company A purchases four delivery trucks from
Supplier B. Supplier B has allocated its Scope 1 and
Scope 2 emissions to the delivery trucks purchased
by A. In addition, B has provided allocated emission
data on its waste generated in operations.
To determine the cradle-to-gate emissions of the
delivery trucks, A must estimate B’s upstream
emissions by using secondary data. Company A uses
(1) internal records to determine the quantity of
trucks purchased in the reporting year and (2) a
database to obtain the emission factor for the
production of a delivery truck.
Scope 1 and Scope 2 data from B related to
production of the four delivery trucks purchased by
A are as follows:
Waste outputs by B related to production of the
four delivery trucks purchased by A are as follows:
As shown in the table below, A uses the quantity of
delivery trucks purchased from B and a
cradle-to-gate emission factor from a life cycle
database. The cradle-to-gate process emission factor
makes it possible to disaggregate the stages of the
life cycle of the delivery trucks. Emissions
associated with the manufacturing stage have been
excluded since they represent the emissions of B
itself, which are already included in B’s Scope 1
and Scope 2 allocated data. The life cycle stages
represented in the cradle-to-gate emission factor
include upstream activities such as the production,
transportation, and distribution of auto parts
purchased by B.
Emissions at each stage are calculated by multiplying
activity data by their respective emission factors
as follows:
-
Scope 1 and Scope 2 emissions from B:Σ Scope 1 and Scope 2 emissions of B related to truck (kg CO2e)= (100,000 × 0.5) + (25,000 × 0.2)= 55,000 kg CO2e
-
Waste output from B:Σ (mass of waste from B related to the truck [sent to landfill] [kg]× emission factor for waste to landfill [kg CO2e/kg])= 500 × 0.5= 250 kg CO2e
-
All other upstream emissions from B:Σ (mass or quantity of units of trucks [kg]× emission factor of purchased good excluding Scope 1 and Scope 2 emissions of producer [kg CO2e/kg or unit or $])= (4 × 100 × 80)= 32,000 kg CO2e
Total emissions of purchased trucks from B are
calculated as the sum of the above results:
55,000 + 250 + 32,000 = 87,250 kg
CO2e
6.3.3 Category 3 — Fuel- and Energy-Related Emissions Not Included in Scope 1 or Scope 2
6.3.3.1 Description and Minimum Boundary
Table 5.4 of the Scope 3
Standard describes Category 3 and its minimum boundary as follows:
Scope 3 Standard, Chapter 5, “Identifying Scope 3
Emissions,” Page 34
Table 5.4 Description and Boundaries of Scope 3
Categories
Upstream Scope 3 Emissions . . .
|
Category
|
Category Description
|
Minimum Boundary
|
|---|---|---|
|
3. Fuel- and energy-related
activities (not included in scope 1 or scope
2)
|
|
|
Category 3 includes GHG emissions related to the production of fuels and
energy purchased by the reporting company in the reporting year that are not
included in Scope 1 or Scope 2. Accordingly, the GHG emissions included in
this category are the life cycle GHG emissions generated in the production
of fuel and energy (electricity, steam, heating, and cooling) up to the
point at which the reporting company consumes the purchased fuel and
electricity. The GHG emissions from the combustion of the purchased fuel are
recorded in Scope 1, and the GHG emissions from the combustion of fuels used
to generate the energy are recorded in Scope 2. Specifically, the GHG
emissions included in Category 3 activities (a), (b), and (c) are further
upstream than Scope 1 and Scope 2 emissions from energy consumption.
Category 3 also includes emissions associated with the generation of energy
(electricity, steam, heating, and cooling) that is sold to end users, which
is applicable to utility companies and energy retailers that purchase
wholesale electricity to resell to their customers.
Table 5.5 of the Scope 3 Standard further
describes the four activities into which Category 3 emissions are
disaggregated as follows:
Scope 3 Standard, Chapter 5, “Identifying Scope 3
Emissions,” Page 41
Table 5.5 Activities Included in Category 3 (Fuel-
and Energy-Related Emissions Not Included in Scope
1 or Scope 2)
The following example from the Scope 3
Standard illustrates the source of each of the activities described above
and the allocation of GHG emissions to Scope 1, Scope 2, and the four
distinct activities in Scope 3, Category 3:
Scope 3 Standard, Chapter 5, “Identifying Scope 3
Emissions,” Page 42
Box 5.5 Accounting for Emissions From the
Production, Transmission, and Use of
Electricity
Figure 5.4
Emissions Across an Electricity Value
Chain
Connecting the Dots
In the process illustrated above, Company C is a utility company that
sells and distributes the energy produced by Company B to the end
consumer, Company D. As shown above, C consumes (i.e., loses) 10
megawatt-hours (100 MWh received – 90 MWh distributed to D) in the
T&D of the electricity. Thus, activity (c) T&D losses are
determined on the basis of the 10 megawatt-hours of electricity
consumed by C.
The table below, which is adapted from Table 5.6 of the
Scope 3 Standard, presents the GHG emissions reported by each company in the
example above. For purposes of the example, it is assumed that the emission
factor of the electricity sold by Company B is 1 metric ton of
CO2 equivalent per megawatt-hour.
Table
6-3 Accounting for Emissions Across an Electricity Value Chain
|
Reporting Company
|
Scope 1
|
Scope 2
|
Scope 3
|
Total GHG Emissions (Scopes 1, 2,
and 3)
|
|---|---|---|---|---|
|
Company A
|
5 metric tons CO2e, which
is directly generated by A in the coal mining
process
|
0 metric tons CO2e
(assuming that A does not use any electricity,
steam, heating, or cooling in the coal mining,
processing, and transportation process)
|
Category 3 — Company A does
not report any GHG emissions in Category 3 because
this is an upstream category and A is the first
company in the electricity’s value chain.
Category 11 — 100 metric tons
CO2e. Note that Category 11 is a
downstream category (see Section 6.4.3
for more information). This example is focused on
Category 3, and downstream GHG emissions are
included only for completeness.
|
105 metric tons CO2e
|
|
Company B
|
100 metric tons CO2e,
which is directly emitted by B from the combustion
of the coal purchased from A
|
—
|
Category 3:
|
105 metric tons CO2e
|
|
Company C
|
0 metric tons CO2e
(assuming that SF6 is not released from
the T&D system).
If SF6 were released from
the T&D system, C would account for it in Scope
1 since SF6 is one of the GHGs within the
scope of the Kyoto Protocol. SF6 is
commonly used to insulate power lines and other
devices in the energy T&D system. Because of
leakage, SF6 often results in process
(rather than combustion) GHG emissions.
|
10 metric tons CO2e from
the generation of electricity that was (1) purchased
by C and (2) consumed by C (i.e., lost in
T&D).4
|
Category 3:
|
105 metric tons CO2e
|
|
Company D
|
—
|
90 metric tons CO2e for
D’s share of the GHG emissions generated by B from
the combustion of the coal.7
|
Category 3:
|
105 metric tons CO2e
|
Connecting the Dots
Note that for each of the four companies in the value chain, the GHG
emissions across all scopes total 105 metric tons of CO2
equivalent. While Scope 1 and Scope 2 emissions cannot be duplicated
by reporting companies (i.e., a company cannot report the same Scope
1 and Scope 2 emissions reported by another company), there is
double counting across Scope 3. Consequently, the total GHG
emissions of all three scopes are the same for all companies in the
supply chain of a particular product or service.
6.3.3.2 Technical Calculation Guidance
The Scope 3 Technical Guidance describes two methods for calculating GHG
emissions from any of the four distinct activities in Category 3: the
supplier-specific method and the average-data method. While both methods are
acceptable, the manner in which each method is applied depends on the
particular Category 3 activity for which it is being used.
For determining upstream
emissions of purchased fuels, the Scope 3 Technical Guidance describes the
two methods as follows:
Scope 3 Technical Guidance, Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Page 40
Calculating Upstream Emissions of Purchased Fuels
. . .
-
Supplier-specific method, which involves collecting data from fuel providers on upstream emissions (extraction, production and transportation) of fuel consumed by the reporting company
-
Average-data method, which involves estimating emissions by using secondary (e.g., industry average) emission factors for upstream emissions per unit of consumption (e.g., kg CO2e/kWh).
For determining upstream
emissions of purchased electricity, the Scope 3 Technical Guidance
characterizes the methods as follows:
Scope 3 Technical Guidance, Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Page 42
Calculating Upstream Emissions of Purchased
Electricity . . .
-
Supplier-specific method, which involves collecting data from electricity providers on upstream emissions (extraction, production, and transportation) of electricity consumed by the reporting company
-
Average-data method, which involves estimating emissions by using secondary (e.g., industry average) emission factors for upstream emissions per unit of consumption (e.g., kg CO2e/kWh).
For calculating emissions
from T&D losses, the following definitions are provided:
Scope 3 Technical Guidance, Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Page 44
Calculating Upstream Emissions From Transmission
and Distribution Losses . . .
-
Supplier-specific method, which involves collecting data from electricity providers on T&D loss rates of grids where electricity is consumed by the reporting company
-
Average-data method, which involves estimating emissions by using average T&D loss rates (e.g., national, regional, or global averages, depending on data availability).
Lastly, for calculating the
emissions from the generation of purchased electricity that is sold to end
users, the following definitions apply:
Scope 3 Technical Guidance, Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Page 47
Calculating Life Cycle Emissions From Power That
Is Purchased and Sold . . .
-
Supplier-specific method, which involves collecting emissions data from power generators
-
Average-data method, which involves estimating emissions by using grid average emission rates.
Specifically, the activity data and emission factor used for each activity
must reflect the phase of the life cycle as shown in the table below.
Table
6-4 Activity Data and Emission Factors for Category 3 Activities
|
Activity
|
Activity Data
|
Emission Factor
|
|---|---|---|
|
a. Upstream emissions of purchased
fuels
|
Quantity and types of fuel
purchased
|
Life cycle emission factor less
combustion emission factor
|
|
b. Upstream emissions of purchased
electricity
|
Quantity of electricity, steam,
heating, and cooling purchased
|
Life cycle emission factor less
combustion emission factor less T&D losses9
|
|
c. T&D losses10
|
Quantity of electricity, steam,
heating, and cooling consumed
|
Life cycle emission factor × T&D
loss rate11
|
|
d. Generation of purchased
electricity that is sold to end users
|
Quantity of electricity purchased
and resold
|
Life cycle emission factor
|
The calculation formula for activity (a),
upstream emissions of purchased fuels, is shown below. For each proceeding
calculation, the emission factor to be applied varies depending on whether
the supplier-specific method or the average-data method is used.
Scope 3 Technical Guidance, Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Page 41
Calculation Formula 3.1 Upstream Emissions of
Purchased Fuels
The calculation formula for activity (b),
upstream emissions of purchased electricity, is shown below.
Scope 3 Technical Guidance, “Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Page 44
Calculation Formula 3.2 Upstream Emissions of
Purchased Electricity
The calculation formula for activity (c),
T&D losses, is shown below.
Scope 3 Technical Guidance, “Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Page 45
Calculation Formula 3.3 Transmission and
Distribution Losses
The calculation formula for activity (d),
generation of purchased electricity that is sold to end users, is shown
below.
Scope 3 Technical Guidance, “Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Page 48
Calculation Formula 3.4 Emissions From Power That
Is Purchased and Sold
6.3.3.3 Practical Example
Example 3.1 of the Scope 3 Technical
Guidance, which is reproduced below, illustrates how a reporting company may
calculate upstream GHG emissions of purchased electricity.
Scope 3 Technical Guidance, Category 3, “Fuel- and
Energy-Related Activities Not Included in Scope 1 or
Scope 2,” Pages 46–47
Example 3.1 Calculating Upstream Emissions of
Purchased Electricity
6.3.4 Category 4 — Upstream Transportation and Distribution
6.3.4.1 Description and Minimum Boundary
Table 5.4 of the Scope 3 Standard describes
Category 4 and its minimum boundary as follows:
Scope 3 Standard, Chapter 5, “Identifying Scope 3
Emissions,” Page 35
Table 5.4 Description and Boundaries of Scope 3
Categories
Upstream Scope 3 Emissions . . .
|
Category
|
Category Description
|
Minimum Boundary
|
|---|---|---|
|
4. Upstream transportation and
distribution
|
|
|
The minimum boundary of Category 4 is defined as the Scope 1 and Scope 2
emissions of transportation and distribution providers that occur during use
of vehicles and facilities (e.g., from energy use). As noted above, Category
4 includes both inbound and outbound transportation services provided by
third parties if paid for by the reporting company. Further, this
category specifically excludes transportation and distribution GHG emissions
that are accounted for in Category 3 as part of the fuel and energy supply
chain.
The Scope 3 Standard describes the activities
included in Category 3 as follows:
Scope 3 Standard, Chapter 5, “Identifying Scope 3
Emissions,” Page 44
Category 4: Upstream Transportation and
Distribution . . .
Specifically, this category includes:
-
Transportation and distribution of products purchased by the reporting company in the reporting year, between a company’s tier 1 suppliersFN6 and its own operations (including multi-modal shipping where multiple carriers are involved in the delivery of a product)
- Third-party transportation and distribution services purchased by the reporting company in the reporting year (either directly or through an intermediary), including inbound logistics, outbound logistics (e.g., of sold products), and third-party transportation and distribution between a company’s own facilities.
__________________________________________________
FN6 Tier 1 suppliers are companies with
which the reporting company has a purchase order for
goods or services (e.g., materials, parts,
components, etc.). Tier 2 suppliers are companies
with which Tier 1 suppliers have a purchase order
for goods or services (see Figure 7.3).
In addition, the Scope 3 Standard provides the following examples of Category
4 emission sources:
-
“Air transport.”
-
“Rail transport.”
-
“Road transport.”
-
“Marine transport.”
-
“Storage of purchased products in warehouses, distribution centers, and retail facilities.”
Connecting the Dots
Although Category 4 is an upstream category, it also includes GHG
emissions from outbound logistic services that are purchased by the
reporting company. If outbound logistic services are not paid for by
the reporting company, they are included in Category 9 (downstream
transportation and distribution), which is discussed in Section
6.4.1. Conversely, GHG emissions from shipping
activities that occur further upstream than the reporting entity’s
Tier 1 suppliers are included in Category 1, as discussed in
Section 6.3.1.
When reporting companies use warehouses, distribution, and retail facilities
owned or controlled by third parties to store purchased or sold products
(e.g., third-party logistics providers), the GHG emissions from the
facilities are part of Category 4. Since these activities are part of the
transportation and distribution of the reporting companies’ goods, the
related GHG emissions are attributable to Category 4.
6.3.4.2 Technical Calculation Guidance
Since Category 4 includes GHG emissions from both transportation and
distribution activities, which differ in nature, there are different
calculation methods prescribed for each activity.
6.3.4.2.1 Calculating Emissions From Transportation
The Scope 3 Technical Guidance describes
acceptable methods for calculating Category 4 emissions from upstream
transportation activities as follows:
Scope 3 Technical Guidance, Category 4, “Upstream
Transportation and Distribution,” Page 51
Calculating Emissions From Transportation . .
.
-
Fuel-based method, which involves determining the amount of fuel consumed (i.e., scope 1 and scope 2 emissions of transport providers) and applying the appropriate emission factor for that fuel
-
Distance-based method, which involves determining the mass, distance, and mode of each shipment, then applying the appropriate mass-distance emission factor for the vehicle used
-
Spend-based method, which involves determining the amount of money spent on each mode of business travel transport and applying secondary (EEIO) emission factors.
The decision tree below, which is adapted
from Figure 4.1 of the Scope 3 Technical Guidance, can help reporting
companies select a method for calculating such GHG emissions.
6.3.4.2.1.1 Fuel-Based Method (Transportation)
The fuel-based method is more accurate than the distance-based method
for calculating Category 4 emissions from transportation. When
applying this method, a reporting company generally relies on its
suppliers (transportation and distribution companies) to provide
data on fuel usage. However, the Scope 3 Guidance indicates that a
reporting company may also indirectly determine the amount of fuel
usage attributable to it by using other supplier data, such as:
-
The “[a]mount spent on fuels and the average price of fuels.”
-
The “[d]istance travelled and the vehicle’s fuel efficiency.”
-
The “[a]mount spent on transportation services, fuel cost share (as percent of total cost of transportation services) and the average price of fuels.”
When allocating GHG emissions under this method, companies are also
encouraged to consider (1) the amount of goods that are or can be
transported within each vehicle and (2) the vehicle type (i.e.,
truck, ship, aircraft, or rail). For example, since aircraft
capacity is generally limited by weight, a weight-based allocation
may be appropriate for air transport. When there are multiple
shipments on a transport leg, a distance-based allocation would also
be appropriate.
The formula for calculating Category
4 emissions from transportation under the fuel-based method is shown
below.
Scope 3 Technical Guidance, Category 4,
“Upstream Transportation and Distribution,” Page
54
Calculation Formula 4.1 Fuel-Based Method
(Transportation)
The Scope 3 Technical Guidance includes additional guidance on
determining the inputs above when (1) the quantity of fuel consumer
is not available and (2) the goods transported were not exclusively
the reporting company’s (e.g., less than truckload, shared vehicle).
In addition, it provides optional technical guidance on accounting
for the GHG emissions from unladen backhaul of the vehicle after the
reporting company’s goods are delivered. For more information on
optional reporting for Category 4, see Section 6.3.4.4.
6.3.4.2.1.2 Distance-Based Method (Transportation)
The distance-based method can be used without the supplier-specific
fuel usage data required for the fuel-based method. Instead, a
reporting company determines GHG emissions per distance traveled and
per unit of product. To determine the emissions, the company may use
assumptions (e.g., about the vehicle type, fuel efficiency, distance
traveled, amount of goods per trip segment). The calculation is
performed separately for each mode of transport (e.g., air, rail)
and vehicle type.
The formula for calculating Category
4 emissions from transportation under the distance-based method is
shown below.
Scope 3 Technical Guidance, Category 4,
“Upstream Transportation and Distribution,” Page
61
Calculation Formula 4.6 Distance-Based
Method (Transportation)
6.3.4.2.1.3 Spend-Based Method (Transportation)
When activity data cannot be obtained from suppliers, the spend-based
method can be used since the amount spent on expenses related to
transportation and distribution is based on internal records.
Environmentally extended input output (EEIO) GHG emission factors
are applied to each type of activity to determine the GHG emissions.
A list of EEIO emissions factors is available from third-party
databases listed on the GHG Protocol Web site.
The formula for calculating Category
4 emissions from transportation under the spend-based method is
shown below.
Scope 3 Technical Guidance,
Category 4, “Upstream Transportation and
Distribution,” Page 65
Calculation Formula 4.7 Spend-Based Method
(Transportation)
6.3.4.2.2 Calculating Emissions From Distribution
The Scope 3 Technical Guidance describes
acceptable methods for calculating Category 4 emissions from
distribution activities as follows:
Scope 3 Technical Guidance,
Category 4, “Upstream Transportation and
Distribution,” Page 66
Calculating
Emissions From Distribution (Upstream) . . .
-
Site-specific method, which involves site-specific fuel, electricity, and fugitive emissions data and applying the appropriate emission factors
-
Average-data method, which involves estimating emissions for each distribution activity, based on average data (such as average emissions per pallet or cubic meter stored per day).
The decision tree below,
which is adapted from Figure 4.2 of the Scope 3 Technical Guidance, can
help reporting companies select a method for calculating such GHG
emissions.
6.3.4.2.2.1 Site-Specific Method (Distribution)
Under the site-specific method, Category 4 emissions
from distribution activities are calculated on the basis of fuel and
energy use data from each facility used by the reporting company to
distribute its goods (regardless of whether the reporting company
owns or controls the facility). As noted above, the distribution
activity can be either upstream (for inbound purchased goods) or
downstream (for outbound goods for sale) if the distribution
facility fees are paid for by the reporting company. When the
reporting company uses only a portion of a facility, the fuel and
energy use is allocated to the reporting company. Similarly, an
allocation may be performed when the reporting company uses a
facility for only a portion of the reporting year. For a summary of
allocation methods, see Section 6.5.
The formula for calculating Category
4 emissions from distribution activities under the site-specific
method is shown below.
Scope 3 Technical Guidance,
Category 4, “Upstream Transportation and
Distribution,” Page 68
Calculation Formula 4.8 Site-Specific Method
(Distribution)
6.3.4.2.2.2 Average-Data Method (Distribution)
When site-specific data are unavailable, reporting
companies can use their internal sources to determine the activity
data (i.e., volume of goods stored, number of pallets stored,
average days stored) and use either supplier-specific or
grid-average emission factors.
The formula for calculating Category
4 emissions from distribution activities under the average-data
method is shown below.
Scope 3 Technical Guidance,
Category 4, “Upstream Transportation and
Distribution,” Page 70
Calculation Formula 4.9 Average-Data Method
(Distribution)
6.3.4.3 Practical Examples
Example 4.1 of the Scope 3
Technical Guidance, which is reproduced below, illustrates how a reporting
company may calculate Category 4 emissions from upstream transportation
under the fuel-based method.
Scope 3 Technical Guidance, Category
4, “Upstream Transportation and Distribution,” Page
56
Example 4.1
Calculating Emissions From Upstream Transportation
Using the Fuel-Based Method
Example 4.2 of the Scope 3
Technical Guidance, which is reproduced below, illustrates how a reporting
company may calculate Category 4 emissions from upstream transportation
under the distance-based method.
Scope 3 Technical Guidance, Category
4, “Upstream Transportation and Distribution,” Page
62
Example 4.2
Calculating Emissions From Upstream Transportation
Using the Distance-Based Method
Example 4.4 of the Scope 3
Technical Guidance, which is reproduced below, illustrates how a reporting
company may calculate Category 4 emissions from upstream transportation
under the spend-based method.
Scope 3 Technical Guidance, Category
4, “Upstream Transportation and Distribution,” Page
66
Example 4.4
Calculating Emissions From Transportation by Using
the Spend-Based Method
Example 4.5 of the Scope 3
Technical Guidance, which is reproduced below, illustrates how a reporting
company may calculate Category 4 emissions from distribution activities
under the site-specific method.
Scope 3 Technical Guidance, Category
4, “Upstream Transportation and Distribution,” Page
69
Example 4.5
Calculating Emissions From Upstream Distribution
Using the Site-Specific Method
Example 4.6 of the Scope 3
Technical Guidance, which is reproduced below, illustrates how a reporting
company may calculate Scope 4 emissions from distribution activities under
the average-data method.
Scope 3 Technical Guidance, Category
4, “Upstream Transportation and Distribution,” Page
71
Example 4.6
Calculating Emissions From Upstream Distribution
Using the Average-Data Method
6.3.4.4 Optional Reporting for Category 4
Category 4 is the first of the consecutively numbered Scope
3 categories that have an optional boundary. The Scope 3 Standard defines
the optional boundary for Category 4 as the “life cycle emissions associated
with manufacturing vehicles, facilities, or infrastructure.”
Companies that choose this optional reporting boundary would capture their
share of the GHG emissions generated in the production of the related
transportation equipment in addition to reporting GHG emissions from the
operation of the transportation equipment as required under the Scope 3
Standard.
In addition to reiterating the Scope 3 Standard’s description of the optional
boundary for Category 4, the Scope 3 Technical Guidance gives companies the
option of including “emissions from unladen backhaul (i.e., the return
journey of the empty vehicle)” within Category 4. For example, if a company
contracts for a delivery from Chicago to Cleveland via truck and there is no
return cargo, it must report emissions associated with the initial trip with
cargo and has the option to report the emissions from the return leg of the
trip without cargo.
6.3.5 Category 5 — Waste Generated in Operations
6.3.5.1 Description and Minimum Boundary
Table 5.4 of the Scope 3
Standard describes Category 5 and its minimum boundary as follows:
Scope 3 Standard, Chapter 5,
“Identifying Scope 3 Emissions,” Page 35
Table 5.4
Description and Boundaries of Scope 3 Categories
Upstream Scope 3 Emissions . . .
|
Category
|
Category Description
|
Minimum Boundary
|
|---|---|---|
|
5. Waste generated in
operations
|
|
|
The minimum boundary of Category 5 is defined as the Scope 1 and Scope 2
emissions that occur during the disposal or treatment of waste by waste
management services purchased by the reporting company. Specifically, the
GHG emissions generated from the processing of waste products by solid-waste
and wastewater management companies are attributable to the reporting
company that generated the waste. While some of those GHG emissions may
occur after the year in which the reporting company generated the waste,
such future GHG emissions are reported in the year the waste was
generated.
The Scope 3 Standard includes the following examples of Category 5
activities:
-
“Disposal in a landfill.”
-
“Disposal in a landfill with landfill-gas-to-energy (LFGTE) — i.e., combustion of landfill gas to generate electricity.”
-
“Recovery for recycling.”
-
“Incineration.”
-
“Composting.”
-
“Waste-to-energy (WTE) or energy-from-waste (EfW) — i.e., combustion of municipal solid waste (MSW) to generate electricity.”
-
“Wastewater treatment.”
6.3.5.2 Technical Calculation Guidance
The Scope 3 Technical
Guidance describes acceptable methods for calculating Category 5 emissions
from waste generated in operations as follows:
Scope 3 Technical Guidance, Category
5, “Waste Generated in Operations,” Page 73
Calculating
Emissions From Waste Generated in Operations . .
.
-
Supplier-specific method, which involves collecting waste-specific scope 1 and scope 2 emissions data directly from waste treatment companies (e.g., for incineration, recovery for recycling)
-
Waste-type-specific method, which involves using emission factors for specific waste types and waste treatment methods
-
Average-data method, which involves estimating emissions based on total waste going to each disposal method (e.g., landfill) and average emission factors for each disposal method.
The decision tree below, which is adapted
from Figure 5.2 of the Scope 3 Technical Guidance, can help reporting
companies select a method for calculating such GHG emissions.
6.3.5.2.1 Supplier-Specific Method
Under the supplier-specific method, third-party waste
treatment companies (i.e., solid-waste, recycling, and wastewater
management companies) provide allocated Scope 1 and Scope 2 emission
data (based on the weight or volume of waste collected) to reporting
companies. As noted in the Scope 3 Technical Guidance, reporting
companies applying this method would not need any GHG emission factors
since the waste treatment companies from which they obtained emission
data “would have already used emission factors to calculate the
emissions.”
The formula for calculating Category 5
emissions from waste generated in operations under the supplier-specific
method is shown below.
Scope 3 Technical Guidance,
Category 5, “Waste Generated in Operations,” Page
74
Calculation
Formula 5.1 Supplier-Specific Method
6.3.5.2.2 Waste-Type-Specific Method
Under the waste-type-specific method, the calculation
formula is broken out into each type of waste (e.g., cardboard, food
waste, wastewater) and treatment method (e.g., incineration, landfilled,
recycling). Thus, reporting companies using this method require activity
data based on the amount of waste generated for each waste type and the
emission factor that applies to both the waste type and the treatment
type, as shown in the calculation formula below.
Scope 3 Technical Guidance,
Category 5, “Waste Generated in Operations,” Page
75
Calculation
Formula 5.2 Waste-Type-Specific Method
6.3.5.2.3 Average-Data Method
When a reporting company has data on the total quantity
of waste produced for each treatment type but does not have information
on the type of waste, it may apply the average-data method. The emission
factor to be used under this method is the average waste treatment
emission factor specific to the type of treatment. Thus, the emission
factor is specific to the treatment type but is not specific to the
waste type. In addition, the emission factor is limited to end-of-life
processes (i.e., it is not a cradle-to-gate or life cycle emission
factor).
The formula for calculating Category 5
emissions under the average-data method is shown below.
Scope 3 Technical Guidance,
Category 5, “Waste Generated in Operations,” Page
76
Calculation
Formula 5.3 Average-Data Method
6.3.5.2.4 Accounting for Emissions From Recycling
Accounting for the GHG emissions related to recycling
can be complex given that the GHG emissions can be aligned with
activities in multiple categories.
For example, suppose that Company Y purchases a product, plastic water
bottles, and that the product includes recyclable content. Company Y’s
use of the product generates waste (empty water bottles) that is
recycled. GHG emissions are generated from the recycling of the waste
disposed of by Y. Company Z purchases the recycled raw material
(plastic) and uses it to manufacture a new product.
Thus, the GHG emissions from the recycling of Y’s waste product would
represent waste generated in operations for Y (upstream Category 5). The
same GHG emissions would also represent a component of the
cradle-to-gate GHG emissions of Z’s purchased goods and services
(upstream Category 1). In addition, since the product that Y purchased
from its supplier was recyclable, the GHG emissions from the recycling
of the product sold would represent end-of-life treatment of sold
products for the supplier (downstream Category 12, which is discussed in
Section
6.4.4).
Table 5.1 of the Scope 3 Technical
Guidance, which is reproduced below, summarizes the accounting treatment
for each type of recycling-related activity.
Scope 3 Technical Guidance,
Category 5, “Waste Generated in Operations,” Page
78
Table 5.1
Accounting for Emissions From Recycling Across
Different Scope 3 Categories
As highlighted above, the same GHG emissions generated in the water
bottle recycling process would be counted toward Category 5 for Y and
Category 1 for Z. This would result in double counting of GHG emissions.
To avoid double counting within the same scope by multiple reporting
companies, the GHG Protocol provides two approaches for allocating GHG
emissions from recycling: the “recycled content method” and the “closed
loop approximation method.” While both methods are described in the
Product Life Cycle Accounting and Reporting
Standard (the “Product Standard”), the Scope 3
Technical Guidance recommends the recycled content method, explaining
that this method “allocates the emissions to the company that uses the
recycled material (reported as category 1).” Under the recycled content
method, the GHG emissions from the recycling of the empty water bottles
in the scenario described above would be reported by Z and excluded from
Y’s Scope 3 emissions.
The above scenario demonstrates an example of when GHG emissions
generated and reported are lower than what they would have been had the
companies not used recycled or recyclable materials. Companies may wish
to disclose not only the absolute GHG emissions, but also that there was
an action taken by management to avoid GHG emissions. Under the Scope 3
Standard, claims of avoided GHG emissions (i.e., the difference between
actual GHG emissions and the GHG emissions that would have been
generated without using recycled or recyclable materials) are not
deducted from any GHG emissions in Scope 1, Scope 2, or Scope 3 but may
be separately reported.
The themes described above are intended to avoid double counting and are
similar in concept to the accounting for GHG emissions related to the
incineration of waste used as energy. If the facility to which a company
sends waste that is being incinerated for energy recovery is also the
facility from which the company purchases energy, the GHG emissions from
incineration would be included in Scope 2 rather than Scope 3. GHG
emissions generated from preparing the waste and transporting it to the
incineration facility would be included in Scope 3, Category 5.
Reporting companies may also need to consider GHG emissions from
wastewater. The Scope 3 Technical Guidance indicates that considerations
related to such emissions are particularly important for the following
industries:
-
“[S]tarch refining.”
-
“[A]lcohol refining.”
-
“[P]ulp and paper.”
-
“[V]egetables, fruits, and juices.”
-
“[F]ood processing.”
6.3.5.3 Practical Examples
The supplier-specific method used for Category 5 is based on
Scope 1 and Scope 2 emissions from a waste treatment company that have
already been allocated to the reporting company. Therefore, no emission
factors are needed.
Example 5.1 of the Scope 3 Technical
Guidance, which is reproduced below, illustrates how a reporting company may
calculate Category 5 emissions from waste generated in operations by using
the waste-type-specific method.
Scope 3 Technical Guidance, Category
5, “Waste Generated in Operations,” Page 75
Example 5.1
Calculating Emissions From Waste Generated in
Operations Using the Waste-Type-Specific
Method
Example 5.2 of the Scope 3
Technical Guidance, which is reproduced below, illustrates how a reporting
company may calculate Category 5 emissions from waste generated in
operations by using the average-data method.
Scope 3 Technical Guidance, Category
5, “Waste Generated in Operations,” Page 77
Example 5.2
Calculating Emissions From Waste Generated in
Operations Using the Average-Data Method
6.3.5.4 Optional Reporting for Category 5
In the calculation of emissions under the
waste-type-specific method, emission factors may include transportation of
waste. In addition, reporting companies have an option to include GHG
emissions generated from the transportation of waste if those emissions are
not reflected in the emission factor. The calculation methods for optional
reporting of GHG emissions from the transportation of waste are the same as
those used to calculate GHG emissions in Category 4 (transportation and
distribution). For more information about those calculation methods, see
Sections
6.3.4.2 and 6.3.4.3.
6.3.6 Category 6 — Business Travel
6.3.6.1 Description and Minimum Boundary
Table 5.4 of the Scope 3
Standard describes Category 6 and its minimum boundary as follows:
Scope 3 Standard, Chapter 5,
“Identifying Scope 3 Emissions,” Page 35
Table 5.4
Description and Boundaries of Scope 3 Categories
Upstream Scope 3 Emissions . . .
|
Category
|
Category Description
|
Minimum Boundary
|
|---|---|---|
|
6. Business travel
|
|
|
The Scope 3 Standard defines the minimum boundary of Category 6 as the “scope
1 and scope 2 emissions of transportation carriers that occur during use of
vehicles (e.g., from energy use).” It provides the following examples of
Category 6 emission sources:
-
“Air travel.”
-
“Rail travel.”
-
“Bus travel.”
-
“Automobile travel (e.g., business travel in rental cars or employee-owned vehicles other than employee commuting to and from work).”
-
“Other modes of travel.”
Table 6.1 of the Scope 3 Technical Guidance,
which is reproduced below, clarifies the accounting for employee
transportation across the value chain.
Scope 3 Technical Guidance, Category 6, “Business
Travel,” Page 82
Table 6.1 Accounting for Employee Transportation
Across the Value Chain
6.3.6.2 Technical Calculation Guidance
The Scope 3 Technical
Guidance describes acceptable methods for calculating Category 6 emissions
as follows:
Scope 3 Technical Guidance, Category
6, “Business Travel,” Page 82
Calculating
Emissions From Business Travel . . .
-
Fuel-based method, which involves determining the amount of fuel consumed during business travel (i.e., scope 1 and scope 2 emissions of transport providers) and applying the appropriate emission factor for that fuel
-
Distance-based method, which involves determining the distance and mode of business trips, then applying the appropriate emission factor for the mode used
-
Spend-based method, which involves determining the amount of money spent on each mode of business travel transport and applying secondary (EEIO) emission factors.
Note that the methods are the same as those for Category 4 (upstream
transportation and distribution).
The decision tree below, which is adapted
from Figure 6.1 of the Scope 3 Technical Guidance, can help reporting
companies select a method for calculating Category 6 emissions.
The fuel-based and spend-based methods are used to calculate Category 6
emissions the same way they are used to calculate Category 4 emissions; see
Sections 6.3.4.2 and 6.3.4.3
for more information. Under the distance-based method, however, Category 6
emissions are calculated differently than Category 4 emissions. Whereas
companies calculate Category 4 emissions under the distance-based method by
using the distance traveled and the amount of products transported for each
trip, they calculate Category 6 emissions under that method by using the
distance traveled by the individual travelers.
The distance-based method calculation formula
for Category 6 is shown below.
Scope 3 Technical Guidance, Category 6, “Business
Travel,” Page 84
Calculation Formula 6.1 Distance-Based
Method
6.3.6.3 Practical Example
Example 6.1 of the Scope 3
Technical Guidance, which is reproduced below, illustrates how a reporting
company may calculate Category 6 emissions by using the distance-based
method.
Scope 3 Technical Guidance, Category
6, “Business Travel,” Pages 85–86
Example 6.1
Calculating Emissions From Business Travel Using
the Distance-Based Method
Note that the example above provides potential ranges for short-haul,
medium-haul, and long-haul flights. However, emission factor databases
generally have unique definitions of and/or criteria for determining the
type of flight (e.g., based on distance ranges rather than hours) and the
corresponding emission factor.
6.3.6.4 Optional Reporting for Category 6
The Scope 3 Standard defines the optional boundary for
Category 6 as the “life cycle emissions associated with manufacturing
vehicles or infrastructure.”
Companies that choose this optional reporting boundary would capture their
share of the GHG emissions associated with manufacturing vehicles or
infrastructure used in business travel in addition to reporting GHG
emissions from the operation of equipment used in business travel as
required under the Scope 3 Standard.
Further, companies have the option to report GHG emissions from business
travelers staying in hotels (by allocating Scope 1 and Scope 2 emissions of
the hotels or by applying emission factors per night to the total nights of
hotel stays).
6.3.7 Category 7 — Employee Commuting
6.3.7.1 Description and Minimum Boundary
Table 5.4 of the Scope 3 Standard describes
Category 7 and its minimum boundary as follows:
Scope 3 Standard, Chapter 5,
“Identifying Scope 3 Emissions,” Page 35
Table 5.4
Description and Boundaries of Scope 3
Categories
Upstream Scope 3 Emissions . . .
|
Category
|
Category Description
|
Minimum Boundary
|
|---|---|---|
|
7. Employee commuting
|
|
|
The Scope 3 Standard defines the minimum boundary of Category 7 as the “scope
1 and scope 2 emissions of employees and transportation providers that occur
during use of vehicles (e.g., from energy use).” It further specifies that
the emission activity in Category 7 is the transportation of employees
between their homes and their worksites that may arise from the following
sources:
-
“Automobile travel.”
-
“Bus travel.”
-
“Rail travel.”
-
“Air travel.”
-
“Other modes of transportation.”
6.3.7.2 Technical Calculation Guidance
The Scope 3 Technical Guidance describes
acceptable methods for calculating Category 7 emissions as follows:
Scope 3 Technical Guidance, Category
7, “Employee Commuting,” Page 87
Calculating
Emissions From Employee Commuting . . .
-
Fuel-based method, which involves determining the amount of fuel consumed during commuting and applying the appropriate emission factor for that fuel
-
Distance-based method, which involves collecting data from employees on commuting patterns (e.g., distance travelled and mode used for commuting) and applying appropriate emission factors for the modes used
-
Average-data method, which involves estimating emissions from employee commuting based on average (e.g., national) data on commuting patterns.
Note that the methods are the same as those for Category 4
(upstream transportation and distribution).
The decision tree below, which is adapted
from Figure 7.1 of the Scope 3 Technical Guidance, can help reporting
companies select a method for calculating Category 7 emissions.
The fuel-based method is used to calculate Category 7 emissions the same way
it is used to calculate Category 4 emissions; see Sections
6.3.4.2 and 6.3.4.3 for more
information. Under the distance-based method, however, Category 7 emissions
are calculated differently than Category 4 emissions. Whereas companies
calculate Category 4 emissions under the distance-based method by using the
distance traveled and the amount of products transported for each trip, they
calculate Category 7 emissions under that method by using the distance
traveled by the individual travelers. Since it may not be feasible to obtain
comprehensive employee commuting data, the Scope 3 Technical Guidance allows
companies to use a representative sample of employee commuting patterns to
extrapolate commuting patterns of the companies’ total employee
population.
The formula for calculating Category 7
emissions under the distance-based method is shown below.
Scope 3 Technical Guidance, Category 7, “Employee
Commuting,” Page 89
Calculation Formula 7.1 Distance-Based
Method
The average-data method may be used to
calculate Category 7 emissions when company-specific data are unavailable.
To use this method, companies estimate the average distance traveled and
determine the average mode of transportation. The calculation formula is
shown below.
Scope 3 Technical Guidance, Category 7, “Employee
Commuting,” Page 92
Calculation Formula 7.2 Average-Data
Method
6.3.7.3 Practical Examples
Example 7.1 of the Scope 3 Technical
Guidance, which is reproduced below, illustrates how a reporting company may
calculate GHG emissions from employee commuting by using the distance-based
method.
Scope 3 Technical Guidance, Category
7, “Employee Commuting,” Page 90
Example 7.1
Calculating Emissions From Employee Travel Using
the Distance-Based Method
Example 7.2 of the Scope 3 Technical Guidance, which is reproduced below,
illustrates how a reporting company may calculate GHG emissions from
employee commuting by using the average-data method.
Scope 3 Technical Guidance, Category 7, “Employee
Commuting,” Pages 92–93
Example 7.2 Calculating Emissions From Employee
Travel Using the Average Data Method
6.3.7.4 Optional Reporting for Category 7
Companies are not currently required to report GHG emissions generated by
employees working at home. However, companies have the option to report GHG
impacts of teleworking. The emission amounts reported would represent the
incremental emissions generated as a result of teleworking. For example, an
employee’s home may use a certain baseline of energy or natural gas during
the day while the employee is at an office (e.g., refrigerator running). The
optional reporting would capture the incremental energy and natural gas
usage attributable to the employee’s working from home that is above the
baseline required while the employee is away from home.
In addition, both the Scope 3 Standard and the Scope 3 Technical Guidance
give reporting companies the option of expanding the definition of employees
for purposes of identifying Category 7 activities to include employees of
other companies that are not owned or controlled by the reporting company.
Such employees may include consultants, contractors, employees of franchises
or outsourced operations, and other individuals who are not employees of the
reporting company but commute to facilities that the reporting company owns
and operates.
6.3.8 Category 8 — Upstream Leased Assets
6.3.8.1 Description and Minimum Boundary
Table 5.4 of the Scope 3
Standard describes Category 8 and its minimum boundary as follows:
Scope 3 Standard, Chapter 5,
“Identifying Scope 3 Emissions,” Page 35
Table 5.4
Description and Boundaries of Scope 3 Categories
Upstream Scope 3 Emissions . . .
|
Category
|
Category Description
|
Minimum Boundary
|
|---|---|---|
|
8. Upstream leased assets
|
|
|
The Scope 3 Standard defines the minimum boundary of
Category 8 emissions as the “scope 1 and scope 2 emissions of lessors that
occur during the reporting company’s operation of leased assets (e.g., from
energy use).” The lessee’s selected consolidation approach and the lease
type inform whether the lessee reports GHG emissions from a leased asset in
Category 8. If the lessee determines that those emissions are from a leased
asset within its organizational boundary and therefore do not qualify for
inclusion in Category 8, it would report them in Scope 1 (direct GHG
emissions) and Scope 2 (indirect GHG emissions). For an illustration of this
concept, see Table
7-2 in Section 7.3 of
this Roadmap. For discussion of a lessor’s accounting for downstream GHG
emissions in Scope 3, Category 13, see Section 6.4.5.
If an asset was leased for only part of a reporting year, only emissions for
the portion of the year in which the asset was leased are included in
emissions from leased assets.
6.3.8.2 Technical Calculation Guidance
The Scope 3 Technical
Guidance describes acceptable methods for calculating Category 8 emissions
as follows:
Scope 3 Technical Guidance, Category
8, “Upstream Leased Assets,” Pages 94–95
Calculating
Emissions From Leased Assets . . .
-
Asset-specific method, which involves collecting asset-specific (e.g., site-specific) fuel and energy use data and process and fugitive emissions data or scope 1 and scope 2 emissions data from individual leased assets
-
Lessor-specific method, which involves collecting the scope 1 and scope 2 emissions from lessor(s) and allocating emissions to the relevant leased asset(s)
-
Average data method, which involves estimating emissions for each leased asset, or groups of leased assets, based on average data, such as average emissions per asset type or floor space.
The decision tree below, which is adapted
from Figure 8.1 of the Scope 3 Technical Guidance, can help reporting
companies select a method for calculating Category 8 emissions.
Under the asset-specific method, a reporting company calculates Category 8
emissions on the basis of the actual fuel and energy use of the leased asset
or the actual Scope 1 and Scope 2 emissions of the leased asset. In
addition, if the leased asset releases GHG emissions through the industrial
process or fugitive GHG emissions, the reporting company would include those
emissions in the asset-specific emission data. For example, a leased
building may include air conditioning equipment that generates fugitive
emissions through its use.
The formula for calculating Scope 8 emissions
under the asset-specific method is shown below.
Scope 3 Technical Guidance, Category 8, “Upstream
Leased Assets,” Page 96
Calculation Formula 8.1 Asset-Specific
Method
The lessor-specific method
relies on obtaining the lessor’s Scope 1 and Scope 2 emission data and total
energy usage and allocating GHG emissions to each leased asset. The
calculation formula is shown below.
Scope 3 Technical Guidance, Category 8, “Upstream
Leased Assets,” Page 100
Calculation Formula 8.3 Lessor-Specific
Method
Under the average-data
method, a reporting company estimates the GHG emissions from each leased
asset or group of leased assets on the basis of average statistics and
secondary data (e.g., average GHG emissions per asset type or floor space).
The calculation formulas are shown below.
Scope 3 Technical Guidance, Category 8, “Upstream
Leased Assets,” Page 101
Calculation Formula 8.4 Average-Data Method for
Leased Buildings (Where Floor Space Data Is
Available)
Calculation Formula 8.5 Average-Data Method for
Leased Assets Other Than Buildings and for Leased
Buildings Where Floor Space Data Is
Unavailable
6.3.8.3 Practical Example
Example 8.1 of the Scope 3 Technical
Guidance, which is reproduced below, illustrates how a reporting company may
calculate GHG emissions from upstream leased assets under the asset-specific
method.
Scope 3 Technical Guidance, Category
8, “Upstream Leased Assets,” Pages 97–98
Example 8.1
Calculating Emissions From Upstream Leased Assets
Using the Asset-Specific Method
6.3.8.4 Optional Reporting for Category 8
Companies that choose Category 8’s optional reporting boundary would capture
their share of the GHG emissions associated with manufacturing or
constructing the leased assets in addition to reporting GHG emissions from
the operation of the leased assets as required under the Scope 3
Standard.
Footnotes
3
Bracketed amounts in the calculations shown reflect
editorial corrections of mathematical errors in the source text.
4
This amount represents C’s
share of the GHG emissions generated by B from the
combustion of the coal and is calculated as (10
MWh of electricity consumed by C) ÷ (100 MWh of
electricity produced by B) × (100 metric tons CO2e
from B’s GHG emissions).
5
This amount represents C’s
share of the GHG emissions generated by A from the
coal mining process and is calculated as (10 MWh
of electricity consumed by C) ÷ (100 MWh of
electricity produced by B) × (5 metric tons CO2e
emitted by A in the coal mining process).
6
This amount represents the sum
of the following:
- 90 metric tons CO2e for D’s share of the GHG emissions generated by B from the combustion of coal. This amount is calculated as (90 MWh of electricity sold to D) ÷ (100 MWh of electricity produced by B) × (100 metric tons CO2e of B’s GHG emissions).
- 4.5 metric tons CO2e for D’s share of the GHG emissions generated by A in the mining process. This amount is calculated as (90 MWh of electricity sold to D) ÷ (100 MWh of electricity produced by B) × (5 metric tons CO2e of A’s GHG emissions).
7
This amount is calculated as
(90 MWh of electricity consumed by C) ÷ (100 MWh
of electricity produced by B) × (100 metric tons
CO2e of B’s GHG emissions).
8
This amount represents the sum
of the following:
- 10 metric tons CO2e for C’s share of the GHG emissions generated by B representing energy that is consumed (i.e., lost) in T&D.
- 0.5 metric tons CO2e for C’s share of the GHG emissions generated by A representing energy that is consumed (i.e., lost) in T&D.
9
Combustion emission factors
are deducted from the life cycle emission factor
since emissions from combustion are accounted for
in Scope 2 (in the case of electricity). Regarding
the deduction of T&D losses, it is important
to know what type of emission factor is being used
and whether T&D loss rates are included.
T&D losses would be subtracted only if they
are included in the life cycle emission factor.
Companies would check the emission factor to
establish whether T&D losses have been taken
into account.
10
See footnote 9.
11
When emissions associated with
T&D losses are calculated, it is important to
check whether the life cycle emission factor
includes T&D losses. If the life cycle
emission factor includes T&D losses, reporting
companies would simply multiply the life cycle
emission factor by the T&D loss rate (and by
the consumption amount).
12
See Section 6.3.4.4
for discussion of Category 4’s optional
boundary.
13
See Section 6.3.5.4
for discussion of Category 5’s optional
boundary.
14
See Section 6.3.6.4
for discussion of Category 6’s optional
boundary.
15
See Section 6.3.7.4
for discussion of Category 7’s optional
boundary.
16
See Section 6.3.8.4
for discussion of Category 8’s optional
boundary.