Scope 3 Bootcamp Tutorial - Sarah Golden
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This document provides an agenda for a Scope 3 bootcamp event. The agenda includes introductions, microtalks on various Scope 3-related topics, a foundational panel, and breakout tabletop conversations. Microtalk topics include what Scope 3 emissions are and why they matter, how to build a Scope 3 strategy, the role of data, calculation methods and disclosures, and what Scope 3 looks like in practice. The foundational panel will feature practitioners discussing navigating Scope 3. Tabletop conversations will allow for deeper discussion on forming reduction strategies, focusing calculations and disclosures, internal collaboration, moving strategies forward, building engagement programs, supplier and customer communication, bringing clean energy to supply chains, addressing downstream emissions, and navigating
Scope 3 Bootcamp Tutorial - Sarah Golden
- 2. Welcome
- 3. AGENDA Introduction & Welcome 15 minutes Level Setting Microtalks 30 minutes Foundational Panel 30 minutes Break 15 minutes
- 4. Operating Principles •Contribute Fully •Listen Actively •Suspend the Urge to Sell •Chatham House Rule
- 5. Chatham House Rules Participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed.
- 6. Write down reflection on note card Turn to neighbor and share What is your burning question?
- 7. Microtalks
- 8. Microtalks What is Scope 3 & why it matters How to build a Scope 3 strategy The role of data in your strategy Calculation methods & disclosures What Scope 3 looks like in practice
- 9. What is Scope 3 & why does it matter? Betty Cremmins | Frm. White House Council on Environmental Quality
- 10. 10 10 MD Vans HD Trucks What is Scope 3? Source: Greenhouse Gas Protocol
- 11. Why does it matter? → Full value-chain accountability → Shared responsibility and stewardship → Awareness of risks and opportunities across multiple sectors and geographies → New market differentiation for products that drive the low- carbon transition → Deepened understanding of embodied emissions in critical material and fuel inputs → Baselines for science-based targets Source: CDP
- 12. Example of a GHG Inventory Source: Practice Greenhealth, ENGIE Impact analysis
- 13. How to get started Source: EPA Center for Corporate Climate Leadership
- 14. Evolution of guidance for Scope 3 2015 2001 2010 2018 GHG Protocol Corporate Standard first edition defines Scope 1, 2 and 3 emissions Launch of the CDP Supply Chain program in recognition of relative importance of Scope 3 supply chain emissions Launch of Science-Based Targets initiative and signing of the Paris Agreement TCFD recommends Scope 3 emissions should be disclosed, if appropriate for sector 2022 Release of Science- Based Targets initiative Net-Zero standard requiring inclusion of all value chain emissions 2021 Regulatory bodies increasingly requiring disclosure of Scope 3, where material… 2011 GHG Protocol Corporate Value Chain (Scope 3) Standard defines 15 categories
- 15. Strategies to reduce Scope 3 Elizabeth Geller | 3 Degrees
- 16. Scope 3 emission reduction strategies GENERAL APPROACHES
- 17. Scope 3 emission reduction strategies GENERAL APPROACHES
- 18. Scope 3 emission reduction strategies GENERAL APPROACHES
- 19. Scope 3 emission reduction strategies GENERAL APPROACHES
- 20. Scope 3 emission reduction strategies GENERAL APPROACHES
- 21. The role of data in your strategy Wenjuan Liu | RMI
- 22. Companies need more supplier-specific data Data quality has been identified as the biggest challenge in tackling scope 3 emissions of CDP responding companies use supplier-specific methodologies to calculate their scope 3 emissions Source: CDP Supply Chain Report 2022, March 2023
- 23. Bridging the implementation gap Existing model is not effective in driving needed reduction actions for key emitting sectors General frame works Follow GHG Protocol framework or other overarching frameworks Consolidate collected data, then: 1) Improve scope 3 emissions inventory 2) Set scope 3 target following SBTi guidance 3) Engage with suppliers on reduction opportunities Follow CDP questionnaire, engage suppliers for scope 3 emissions Fill out questionnaire and disclose required data to buyers Lack sectoral specificity to provide clarity in key questions Questionnaires are often generic; Require sectoral knowledge to drive sector-specific actions Buyers don’t know how to make the best use of the data, thereby delaying reduction actions. SUPPLIER MANUFACTURER 1 2 3 4
- 24. Example: Sector-specificity improves emissions transparency RMI methodologies provide clarity on product-level emissions under general frameworks Primary data (% calculated using supplier specific data) Material specific climate metrics (electricity procurement best practice, etc) Recycling information (post-consumer scrap, etc) Primary aluminum emissions ALUMINUM SUPPLY CHAIN Bauxite mining Alumina refining Smelting Casting Semi-fabrication Energy source Buyer 1 2 3 4 Product-level emissions data package
- 25. Supplier-specific data Scope 3 strategy impact Material-specific climate metrics • Engage suppliers with more targeted questions • Better understand suppliers’ decarbonization actions Primary metal emissions • Provides clarity on emissions sources • Informs low-carbon procurement strategies Recycling information • Inform recycling and circularity decarbonization strategies Primary data • Reduce data uncertainty, set baselines for accurate progress tracking Specific data empowers scope 3 action Facilitates collaboration along supply chain to jointly tackle emissions hot spots 1 2 3 4
- 26. • Product level data will inform participant’s internal carbon pricing system • Product-level data will be critical establishing the scope 3 inventory for participant to set 1.5 aligned reduction targets Example: Case studies show impacts of data-empowered actions Pilots demonstrated that improving data transparency can enable decarbonization action STEEL: AUTOMOTIVE Pilots were conducted between August and December 2023 with 10 organizations. Reports are forthcoming in March at rmi.org. • The additional metrics included in RMI’s Guidance could improve procurement strategy • Participant to include metrics in supplier questionnaires to provide further transparency on suppliers’ abatement actions STEEL: AUTOMOTIVE • Participant to include more sectoral targeted metrics in supplier survey to improve responsible sourcing practices • Standardized emissions data exchange enables scale to entire supplier network ALUMINUM: AUTOMOTIVE • Buildings value chain collaboration resulted in better emissions data for procurement decisions • Aluminum specifications used by property developer in subsequent project to compare curtain wall manufacturers ALUMINUM: BUILDINGS
- 27. RMI – Energy. Transformed. Thank You! We are exploring different ways to collaborate with key industry stakeholders – come talk to us! Wenjuan Liu Manager, Climate Intelligence wliu@rmi.org
- 28. Understanding Calculation Methods & Disclosures David Martenson, IBM Envizi ESG Suite
- 29. SEC & California Climate Legislation Scope 3 reporting required when deemed material to investors OR when the company has emissions targets that encompass Scope 3 emissions EU CSRD/ESRS Scope 3 reporting required (ESRS E1-9) in these categories: – (i) upstream purchasing (Cat 1&2) – (ii) downstream sold products (Cat 11) – (iii) goods transportation (Cat 4 & 9) – (iv) travel (Cat 6) – (v) financial investments. (Cat 15) Voluntary disclosures What’s driving priorities and investments for Scope 3 reporting and analysis? External Disclosures Driving Decarbonization Assessing materiality Identify hotspots and opportunities Data quality assessment Set and track against targets: organization, category, supplier, teams, geography Scenario modelling
- 30. Data quality & calculation accuracy 3 0 Data completeness Data accuracy (average and category specific) Emission factor libraries Emission factor management tools Tools for managing calculation methods
- 31. Average method Proactively analyze & drive emission reductions across largest suppliers within the most material scope 3 categories Supplier-specific Proactively drive emission reductions at a product level . Spend-method Meet regulatory and investor reporting requirements 3 1 Case study: global manufacturer Don’t let perfection be the enemy of progress Footer text (optional) GHG Calculation Method Reporting focus 9700 parts – emissions calculated with spend method 3100 parts – emissions calculated with average method using 3rd party factor set Aspire to capture Product Carbon Footprint data from suppliers.
- 32. What Scope 3 looks like in practice Marty Spitzer, WWF
- 33. | 2/5/2024 | 33 15 years of Scope 3 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 GHG Protocol Corporate Value Chain (Scope 3) Standard Released GHG Protocol initiates process for additional guidance related to Scope 3 Standard SBTi Launched; Ambitious and measurable scope 3 target required if scope 3 emissions are at least 40% of total emissions. Must cover top 3 categories or 2/3 of total scope 3 emissions 34 companies road test GHG Protocol Scope 3 Standard 1,134 scope 3 Targets** *Estimated from https://sciencebasedtargets.org/resources/files/SBTiMonitoringReport2022.pdf **96% (excluding SMEs and financial institutions) of all companies with science-based targets covered scope 3 by the end of 2022 ***As of1/30/2024 ~100 Scope 3 Targets* 0 Scope 3 Targets ~400 Scope 3 Targets 2,288 scope 3 Targets*** SBTI Criteria V3 strengthens S3 criteria, specifies options, 2C alignment for absolute targets, supplier engagement targets introduced SBTI Criteria V5 updates S3 target setting approaches, requires WB2C alignment for numeric reduction S3 targets GHG Protocol launches supply chain survey
- 34. Moderated by: Featured Speakers: ELIZABETH GELLER Director - Energy & Climate Practice 3Degrees MARSHALL CHASE Director of Sustainability Micron DEVIN CARSDALE Associate Director, Global Sustainability, Supplier Diversity Bristol-Myers Squibb TOLU FALADE Senior Manager, Sustainability Indeed Foundational Panel Practitioners Navigating Scope 3
- 35. BREAK
- 36. How to form a reduction strategy: Elizabeth Geller | 3Degrees How to get unstuck: moving your strategy forward: Wenjuan Liu | RMI Bringing clean energy to your supply chain: Terese Decker | 3Degrees How suppliers and customers talk to each other: Marshall Chase| Micron How to build a supplier engagement program: Devin Carsdale | Bristol-Myers Squibb Internal collaboration to meet Scope 3 goals: Tolu Falade | Indeed Focusing where it matters: calculation and disclosure: David Martenson | IBM Addressing downstream emissions: LCAs and products sold: Betty Cremmins | Frm. White House CEQ How to navigate Scope 3 strategies in a changing world: Marty Spitzer | WWF Tabletop Conversations
- 37. How to form a Scope 3 reduction strategy Elizabeth Geller Director - Energy & Climate Practice, 3Degrees
- 38. Focusing where it matters: calculations & disclosures David Martenson Solution Director, IBM Envizi ESG Suite
- 39. Internal collaboration to meet Scope 3 goals Tolu Falade Senior Manager, Sustainability | Indeed
- 40. How to get unstuck: moving your strategy forward Wenjuan Liu Manager, Climate Intelligence, RMI
- 41. How to build a supplier engagement program Devin Carsdale Associate Director, Global Sustainability, Supplier Diversity Bristol-Myers Squibb
- 42. How suppliers and customers talk to each other Marshall Chase Director of Sustainability | Micron
- 43. Bringing clean energy to your supply chain Terese Decker Director - Energy & Climate Practice 3Degrees
- 44. Addressing downstream emissions: LCAs and products sold Betty Cremmins Frm. White House Council on Environmental Quality
- 45. How to navigate a Scope 3 strategy in a changing world Marty Spitzer Senior Director, Climate and Renewable Energy, WWF
- 46. How to form a reduction strategy: Elizabeth Geller | 3Degrees Focusing where it matters: calculations & disclosures: David Martenson | IBM Envizi ESG Suite Internal collaboration to meet Scope 3 goals: Tolu Falade | Indeed How to get unstuck: moving your strategy forward: Wenjuan Liu | RMI How to build a supplier engagement program: Devin Carsdale | Bristol-Myers Squibb How suppliers and customers talk to each other: Marshall Chase| Micron Bringing clean energy to your supply chain: Terese Decker | 3Degrees Addressing downstream emissions: LCAs and products sold: Betty Cremmins | Frm. White House CEQ How to navigate Scope 3 strategies in a changing world: Marty Spitzer | WWF Tabletop Conversations: Round 1
- 48. Tabletop Conversations: Round 2 How to form a reduction strategy: Elizabeth Geller | 3Degrees Focusing where it matters: calculations & disclosures: David Martenson | IBM Envizi ESG Suite Internal collaboration to meet Scope 3 goals: Tolu Falade | Indeed How to get unstuck: moving your strategy forward: Wenjuan Liu | RMI How to build a supplier engagement program: Devin Carsdale | Bristol-Myers Squibb How suppliers and customers talk to each other: Marshall Chase| Micron Bringing clean energy to your supply chain: Terese Decker | 3Degrees Addressing downstream emissions: LCAs and products sold: Betty Cremmins | Frm. White House CEQ How to navigate Scope 3 strategies in a changing world: Marty Spitzer | WWF
- 50. Write down reflection on note card What tool did you find?
- 51. Thank You