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A Review of Greenhouse Gas Scope 3 Emission Calculation Results Among Leading Electronics Manufacturers and Chinas Evolving Energy

& Greenhouse Gas Regulations Affecting These Manufacturers Future Activities

Paper # 12838 Roberto Piccioni, Environmental Resources Management (ERM), 1277 Treat Blvd, Suite 500, Walnut Creek, California 94597 Ariane Burwell Environmental Resources Management (ERM), 1277 Treat Blvd, Suite 500, Walnut Creek, California 94597

This study provides insights into the greenhouse gas emission results available among electronics companies and associated value stream impacts from the manufacture and use of these products and services. The study focuses on a review of selected companies in the Information, Communication and Technology sector, commonly referred to as the ICT sector. The studied companies include some of the most prominent global brands in the personal computer, mobile telephone and software markets. A value stream describes the sequence of activities required to design, produce, and provide a specific good or service, including all the information, materials and people involved. Greenhouse gases emissions result along the entire value stream from extraction and processing of raw materials, resulting intermediates and components, product production and manufacture, product use, and the end-of-life impacts associated with product disposal or recycling activities. The study summarizes the approaches used by different companies to address and quantitatively assess their value stream impacts, with an emphasis on Scope 3 greenhouse gas emissions. Chinas recent and emerging energy efficiency and greenhouse gas regulatory programs and associated 5-year plans are a pertinent part of this study. These new requirements are expected to have a direct impact on electronics manufacturers and their activities in Asia and China, and their associated greenhouse gas performance among each other. The study includes an analysis of China's 12th five-year plan (FYP) that incorporates objectives of energy efficiency and greenhouse gas reductions. Resources supporting the study include the World Resources Institute / World Business Council for Sustainable Development, Product Life Cycle Accounting & Reporting Standard. Data sources supporting the analysis included the Carbon Disclosure Project (CDP) Investor Reports

and individual company websites. Information about Chinas evolving regulation was attained from government and analyst sources.

This paper focuses upon an environmental survey conducted to collect representative data from leading global Information, Technology and Communication (ICT) companies. The objective of the study is to assess the extent of uniformity and completeness that these companies apply to measuring and reporting their value chain impacts as represented by their greenhouse gas emissions. The products and services produced by the Information, Technology and Communication (ICT) sector are increasingly pervasive in our everyday life. Estimates indicate there were a global total of six billion mobile phone subscriptions at the end 2011, thereby representing 85% of the world population. Through the innovations and globalization of the products and services of the ICT sector, there have been tremendous advances and improvements in human development. In 2010, global exports of ICT goods accounted for 12% of world merchandise trade, and as much as 20% in developing countries. In a similar fashion, the products and services of these companies can have a profound effect on social structures and the general environment, both positive and negative. The availability of mobile phones have purportedly led to changes in family dynamics with issues of safety and surveillance from parental and adolescent perspectives. Allegations of health and safety impacts from low-level radiation from mobile phones and associated usage are also discussed widely. Environmental issues that face scrutiny include issues such as: electronic waste, use of conflict material in components, water use, and greenhouse gas emissions, among others. Companies are realizing that these economic, social and environmental objectives and issues are linked and dependent upon each other for achieving the desired future potential of the organizations interests. Some of the objectives that can be accomplished through close linkages and partnerships between an ICT company and key business partners include: The minimization of risk from a value chain partner associated with a social or environmental crisis, The development of knowledge and improvement systems between the organization and the value chain partner that result in the avoidance of negative publicity and all the associated costs, The ability to develop communication that reflects responsible business practices and economic development within a community of value chain partners, The fortification of a brand. A group of the most prominent, innovative and successful companies in the ICT sector was chosen to evaluate their current greenhouse gas management practices. The study addresses one of the more significant environmental impacts of these companies: greenhouse gas emissions. Increased greenhouse gases have been determined to be the significant leading cause of climate change occurring on the planet. This study is focused upon assessing how each company 2

considers, measures and reports their greenhouse gas emissions and associated greenhouse gas management initiatives. A significant portion of the greenhouse gas impact associated with these companies activities results from the manufacture of the organizations products. And most of this product manufacture occurs in Asia, especially in China. In 2009, China produced 49.9% of phone handsets, 60.9% of personal computers and 48.3% of color televisions for the world. The study evaluates the regulatory environment evolving in China that will have significant impact on the ICT sectors manufacturing infrastructure. China is working to implement its 12th Five Year Plan (FYP) of the Chinese Central Committee. These objectives will have a significant impact on Chinese manufacturers, and consequently on the companies for whom these Chinese manufacturers fabricate products. Initiatives such as energy efficiency mandates, emission trading schemes, carbon taxes and development requirements play a significant role in shaping the future direction of the Chinese manufacturing industry for the ICT sector. The approach used in China will have an associated influence on other regions and nations where these manufacturing activities occur.


Eight companies were selected for study. These companies collectively represent nearly $750 Billion (US) in annual sales (2011) which is equivalent to the GDP of nations such as the Netherlands or Argentina. A sustainability director from one of these companies requested a study of the ICT sector. This individual requested that these peer companies be reviewed as they represent, in his opinion, the most significant companies to observe for best practice and future orientation regarding greenhouse gas management. Table 1 provides a listing of the companies, associated headquarters locations, most recent years annual revenues and the current market capitalization of the company. Table 1 Profile of Selected ICT Companies Comprising Study Group

Company Apple Dell Fujitsu HewlettPackard Nokia Panasonic Philips

Headquarters Location Cupertino, CA Round Rock, TX Tokyo, Japan Palo Alto, California

Revenues (2011 $ US) 164.69 B 56.94 B 54 B 118.68 B

Market Capitalization ($ US) 410.59 B 25.01 B 9.03 B 41.05 B 13.38 B 16.34 B 27.01 B

Espoo, Finland Kadoma-shi, Japan Amsterdam, Netherlands

39.07 B 93.02 B 32.09 B

Samsung Electronics

Seoul, South Korea 180.99 B 196.18 B


Increasingly, companies are providing environmental stewardship and social responsibility performance information as part of their public reporting processes. This has become necessary since many companies have realized the range of stakeholders interested in company activities and the interest of stakeholders to understand and influence company impacts. In the ICT sector, several social and environmental issues have become prominent issues for these companies to address with interested stakeholders and manage effectively. Some of these issue include: electronic waste from spent products, conflict materials as raw materials for electronics, working hours, wages and health and safety issues in manufacturing locations, and climate change, among others. This paper addresses greenhouse gases as a selected value stream indicator to study the selected companies in the ICT sector. Greenhouse gases result from a variety of activities. The greenhouse gas emissions generated directly and indirectly by an entity can be classified into Scopes, based on the source of the emissions. Figure 1 provides an illustration of the 3 Scopes and examples of operational activities that comprise each scope. Figure 1 Scope 1, Scope 2 and Scope 3 Greenhouse Gas Emission Sources

Scope 1 emissions are direct greenhouse gas emissions from sources that are owned or controlled by the entity. Scope 1 can include emissions from fossil fuels burned on site, emissions from entity-owned or entity-leased vehicles, and other direct sources.

Scope 2 emissions are indirect greenhouse gas emissions resulting from the generation of purchased electricity, heating and cooling, or steam generated off site but purchased by the entity, and the transmission and distribution losses associated with some purchased utilities (e.g., chilled water, steam, and high temperature hot water). Scope 3 emissions include indirect greenhouse gas emissions from sources not owned or directly controlled by the entity but related to the entitys activities. Scope 3 greenhouse gas emission sources include business travel, employee commuting, contracted solid waste disposal, contracted wastewater treatment and emissions by suppliers or from the use of a product.

Companies in the ICT sector have become experienced at reporting their Scope 1 and Scope 2 greenhouse gas emissions occurring as a result of their own operations. There has been growing recognition that companies have an indirect influence on additional greenhouse gas emissions associated with their value streams. And stakeholders, including investors, community activists, government officials, customers and others will exert influence for these companies to work to minimize the greenhouse gas emissions from these indirect activities. Figure 2, from the Product Life Cycle Accounting & Reporting Standard, depicts the value chain associated with a product, and summarizes the Scope 1, 2 and Scope 3 contributors. Scope 3 emissions comprise a variety of sources that are often difficult to determine. The Product Life Cycle Accounting & Reporting Standard was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). The standard is to assist organizations in collecting the necessary data and completion of the appropriate calculations to determine Scope 3 emissions. This protocol outlines a framework for characterizing the upstream and downstream greenhouse gas emission sources to an organizations' overall greenhouse gas impact. The Standard provides a method to inventory emissions associated with individual products across their full life cycle and value streams, taking into account impacts both upstream and downstream of a companys operations. Figure 2 Sources of Scope 1, Scope 2 and Scope 3 Greenhouse Gas Emissions

The goal within many organizations is to develop a framework for measuring these indirect, Scope 3 greenhouse gas emissions so that the company can make informed choices to reduce

greenhouse gas emissions from the products and services that they design, manufacture, sell, purchase, or use. Scope 3 greenhouse gas measurement and calculation systems are in a state of development in the ICT sector, and broadly across industry. Summary of Greenhouse Gas Data for ICT Companies Reviewed Table 2 summarizes the Scope 1, 2 and Scope 3 emissions reported by the selected ICT companies. The source of information is the 2012 Carbon Disclosure Project (CDP) results from the 2012 CDP Investor Program and information from individual company websites. The Carbon Disclosure Project, or CDP, as it is now known, was initiated in 2001. The organization has developed a global disclosure system for companies to report to financial investors. The objective of CDP is to provide climate performance information of companies for shareholders use in investment portfolio selection. The CDP information helps investors select companies that are socially and environmentally responsible. In the US, approximately 1 dollar of every 8 dollars professionally invested is directed to socially responsible funds. Over 4100 organizations, including 81% of the worlds largest public companies, use CDP to disclose their impacts on the environment and natural resources to stakeholders. According to CDP, 722 investors representing US$87 trillion, which represents more than half the worlds invested capital, utilize climate data collected and compiled by CDP. Seven of the eight studied companies provide responses to the CDP disclosure request. Apple has chosen not to respond, and the Apple data provided for this paper is collected from the Apple environmental stewardship company website. Table 2 lists the companies in rank order associated with annual revenue. This is used to differentiate the companies in terms of relative size to each other and the approximate amount of product and services provided in the marketplace. Table 2 - Scope 1, Scope 2 and Scope 3 Emissions Reported by Select ICT Companies
2012 Revenues (2011 $ US) Company 1. 2. 3. 4. 5. Samsung Electronics Apple (source Apple company website) Hewlett-Packard Panasonic Dell 180.99 B 164.69 B 118.68 B 93.02 B 56.94 B 4,045,113 378,000 276,449 743,722 38,672 7,258,865 84,000 1,724,377 2,930,368 397,558 45,465,753 22,638,000 27,272,000 85,000,000 98,407 2012 CDP Investor Program (All values in metric tonnes (MT CO2e) Scope 1 Scope 2 Scope 3 Scope 3 Percent of Sum of Scope 1, 2 & 3 80.1 % 98 % 93.2 % 95.9 % 18.4 %

6. 7. 8.

Fujitsu Nokia Philips

54 B 39.07 B 32.09 B

266,000 18,600 430,603

832,000 251,800 427,322

4,793,600 3,726,500 6,512,640

81.4 % 93.2 % 88.4 %

Scope 3 greenhouse gas emissions are the subject of particular interest for this study. As indicated above, Scope 3 greenhouse gas emissions are the indirect greenhouse gas emissions that occur as a result of an organizations operations, but not under the direct control of that entity. The difference between total greenhouse gas emissions, and Scope 3 greenhouse gas emissions reporting for these companies is noteworthy. The table depicts that some of the large companies have relatively small total greenhouse gas reporting, and conversely, some of the larger companies have relatively high greenhouse gas reporting when compared to each other. The discipline of Scope 3 greenhouse gas calculation methodologies does not yet provide for direct comparison between companies to determine actual greenhouse gas emission management efficiencies. The variance in reported greenhouse gas emissions among these companies indicates that the companies are not yet applying uniform calculation methodologies to describe their total greenhouse gas impact. The operational profile of these companies also affects their greenhouse gas performance. For example, if a company manufactures their own products and services, the associated greenhouse gases will be Scope 1 and 2. If a companys emphasis is on development of products and services, and contracts the sourcing and manufacture, the greenhouse gases associated with the products manufacture will be Scope 3 for that company. As experience within the companies continues to develop and as Scope 3 calculation methodologies become standardized, this data should serve as an important environmental stewardship performance indicator of a companys greenhouse gas management efforts and associated results. For example, some companies are using greenhouse gas emissions per revenue dollar as an indicator of the relative efficiency of products and to serve as indicator to promote environmentally efficient design. By normalizing greenhouse gas emissions to revenue, the company, and the companys stakeholders can track the progress and results of the companys efforts. The Product Life Cycle Accounting & Reporting Standard for Scope 3 emissions provides a listing of Scope 3 contribution sources. These categories are characterized as upstream and downstream sources. The upstream greenhouse gas contributions are characterized as: 1. Purchased goods and services, 2. Capital goods, 3. Fuel- and energy-related activities, (not included in scope 1 or scope 2), 4. Upstream transportation and distribution, 5. Waste generated in operations, 6. Business travel, 7. Employee commuting, 8. Upstream leased assets. 7

The downstream greenhouse gas contributions are characterized as: 1. Downstream transportation and distribution, 2. Processing of sold products, 3. Use of sold products, 4. End-of-life treatment of sold products, 5. Downstream leased assets, 6. Franchises, 7. Investments. The GHG Protocol Initiatives Corporate Standard was developed by WRI and WBCSD in 2001 and revised in 2004. It is now described as the most widely used accounting and reporting standard for Scope 1 and Scope 2 greenhouse gas emissions. In November 2011, WRI and WBCSD finalized and released the Product Life Cycle / Corporate Value Chain (Scope 3) Accounting and Reporting Standard. A supplemental ICT Sector Guidance Document is aligned with the Greenhouse Gas Protocol standards and was published jointly by WRI, WBCSD, and Carbon Trust. This document provides guidance, specifically for ICT organizations, for the carbon foot printing of associated products and services. The ICT sector guidance was developed following WRI and WBCSDs multi-stakeholder process for developing standards and guidance under the GHG Protocol Initiative. The ICT guidance initiative works to provide a guidance document that covers the following scope: An overview section providing general guidance, Guidance related to ICT infrastructure (covering areas such as networks, data centers, hardware and software), Guidance related to ICT Service Applications, Supporting default data, secondary emissions factors, references and glossary. For the companies reviewed that reported Scope 3 emissions, the companies also provided detail of the categories of Scope 3 reporting. In some cases, companies reported to CDP that the company was tracking the Scope 3 category and provided a quantitative measure of the category Scope 3 impact. In other cases, the company reported that the Scope 3 category area was studied, but that quantitative data was not available or provided to CDP. Table 3 provides a review of the companies studied and the extent of the Scope 3 categories for which the companies have assessed and reported Scope 3 greenhouse gas performance. Table 3 - Scope 3 Reporting Categories of ICT Companies
Scope 3 Category Source Upstream 1. Purchased goods and services 2. Capital goods 3. Fuel- and energy-related activities, (not included in scope 1 or scope 2) 4. Upstream transportation and distribution Initiatives and Quantitative Results Reported Initiatives, but without Quantitative Results Reported Dell

Panasonic, Samsung, Apple, Nokia, Hewlett-Packard, Fujitsu, Philips

Samsung, Apple, Nokia, HewlettPackard, Fujitsu, Philips


5. Waste generated in operations 6. Business travel 7. Employee commuting 8. Upstream leased assets Downstream 9. Downstream transportation and distribution 10. Processing of sold products 11. Use of sold products 12. End-of-life treatment of sold products 13. Downstream leased assets 14. Franchises 15. Investments

Samsung, Nokia, Philips Nokia, Hewlett-Packard


Samsung, Apple, Nokia, HewlettPackard, Fujitsu Apple, Hewlett-Packard

Dell HP


The majority of the companies profiled have mature systems for reporting Scope 1 and Scope 2 greenhouse gas emissions. Many of these companies are progressing on in their pathways to reporting efforts of Scope 3 greenhouse gas emissions management. As part of the CDP report submissions, the ICT companies discuss approaches and initiatives associated with greenhouse gas management. Samsung has focused on operational practices and energy management to improve operational performance. Scope 3 emissions are being mitigated through reduced travel, increased video teleconferencing, and an ambitious Scope 3 reduction goal. Apple chooses not to participate in the public reporting mechanism of CDP, but provides comparable data on the company website. The company operates with a philosophy of connecting all business activities, including greenhouse gas management, directly back to associated product and service lines. Other companies tend to focus on their operations, and partition their operations into product lines subsequently. HP has actively supported the development of greenhouse gas reporting frameworks of value chain partners. HPs work on creating positive impact is associated with product energy efficiency, and capture of market opportunities through innovative HP products replacing less effective competitor alternatives. Panasonic is building Scope 3 reporting methods, and is currently focused on reporting greenhouse gases from purchased goods and services supporting Panasonic operations. Panasonics diversified business creates opportunities to share innovations associated with greenhouse management across different product and service platforms. Dell has discussed a variety of innovative and diversified initiatives underway to understand and mitigate Scope 3 greenhouse gas impacts, but has reported little in terms of quantitative data terms. Fujitsu describes a holistic approach to greenhouse gas emission management across the companys entire value stream. Focus on product energy efficiency has resulted in a variety of important innovations.

Nokia has set aggressive 20-year goals for product energy efficiencies. The company suggests that use of their mobile telephone device to telecommute is a technique to reduce greenhouse gas emissions from employee commuting. Philips is very focused on greenhouse gas emissions from purchased goods and services, and transportation implications of products and people. The company has set aggressive goals for energy efficiency, greenhouse gas reduction and marketing of green products.

Many of the companies cite the WRI / WBCSD GHG Protocol for Scope 3 Reporting as the reference resource for performing their calculations.


The ICT sector is closely associated with China for its manufacturing activities. Much of the sourcing and manufacturing of the ICT products and services originates in Asia, particularly in China. Consequently, a review of the evolving greenhouse gas and energy policies evolving in China will have an effect on ICT companies operating there, and their associated Scope 3 greenhouse gas emission impacts. Chinas National Efforts: Chinas national government is pursuing ambitious energy and greenhouse gas objectives as part of the nations vision to grow the country economically, while also responding to the increasing concerns about environmental impairment associated with its rapid economic growth. Chinas environmental degradation has occurred for many reasons: rapid industrialization, reliance on coal as an energy source, relatively large and energy-intensive manufacturing industries and lax environmental protection and enforcement. The future plan for China has a large focus on reducing pollution, increasing energy efficiency and ensuring a stable, reliable and clean energy supply. Chinas environmental goals will likely have a far-reaching effect as they will impact and shape a range of other industrial policies in a multitude of sectors. In October 2010, the Communist Party of Chinas (CPC) Central Committee approved the guiding principles of Chinas 12th Five-Year Plan for National Economic and Social Development (FYP) (2011-2015). The National Peoples Congress (NPC) ratified the plan in March 2011. The national carbon intensity reduction commitment has been integrated into the 12th FYP and serves as a driver for specific actions to be implemented in various sectors at the provincial and municipal levels in China. China adopted a national voluntary GHG commitment in 2009 and reaffirmed it in 2010 under the United Nations Framework Convention (UNFCCC) Copenhagen Accord (COP15). At the COP15 in Copenhagen, China set a target to reduce its national carbon intensity per unit of economic activity (i.e., GDP) in 2020 by 40-45% below 2005 levels. In addition to the national targets, there is increasing pressure on provincial and municipal governments to implement stronger measures on shorter timeframes. The Ministry of Industry


and Information Technology (MIIT) set the energy reduction target for the industrial sector higher than the national target and changed it from a 16% reduction in energy use per GDP to a 21% reduction in energy consumption per unit of industrial output. This new target is potentially a stronger and more absolute target because it is based on product specific data rather than a GDP based benchmark. This presents important ramifications for potential regulation to companies for their associated manufacturing activities and associated energy use and greenhouse gas emissions. Emissions Trading & Carbon Tax in China Emission trading has been announced by the central government as a technique to create market incentives to effect desired change. The government has announced that pilot emissions trading schemes will be instituted in seven provinces and municipalities. The cities of Beijing, Tianjin, Shanghai, Chongqing, Shenzhen, and the provinces of Guangdong and Hubei have been selected for pilots. In late 2011, the plan for these pilot programs was to develop seven unique schemes and pilot different designs based on the European, Australian, and Californian emissions trading schemes. By 2015 or 2016 for the next Five Year Plan, the 13th FYP, the government plans to have unified national rules in place for emissions trading based on best practices they develop from the pilots. The emissions trading scheme and carbon tax will be used as mutually supportive tools. The tax is aimed at lowering consumption by the end user of electricity and fossil fuels while the emissions trading scheme is primarily aimed at large businesses and industries which emit more greenhouse gases. With missed annual targets recently and increasing scrutiny around implementation in China, there is additional pressure to establish a carbon tax to send market signals to reduce energy use by 2015. A new carbon tax could be adopted readily and could impact a number of manufacturing facilities depending on the final rules and the associated threshold. Chinas Provincial & Municipal Efforts A guidebook has been released by the central government for use by local governments outlining methods the municipality or province should use to estimate greenhouse gas emissions. It is expected that these local inventories will inform the design of emissions trading schemes including the sectors covered and anticipated targets. It remains unclear how the national targets will be implemented on the local level. However, there is increasing pressure on provincial governments to implement targets that cover and reduce emissions and energy usage at industrial facilities. A newly developed emission trading scheme or carbon tax could be administered by local officials who would be responsible for assigning the program requirements to regulated industries and businesses. If a business exceeds its allocated emissions, than they would pay an extra allowance fee or carbon tax and potentially be viewed with disfavor by the regulatory authority. Under the worst of circumstances, officials could turn off power to the factory.


Beijings poor air quality has been in the news frequently in the recent past. The municipality has been preparing a citywide greenhouse gas inventory and anticipates that more than 600 companies will be included in their program. Recently, emergency measures have been instituted including the temporary closure of more than 100 factories and prohibiting government vehicles from operation as air monitoring results confirm unhealthful levels. Meanwhile, the mayor of Beijing is ordering 180,000 older vehicles off the roads, promoting the use of clean energy for government vehicles and heating systems, and growing trees over 250 square miles of land in the next five years. The central government has capped Guangdong Provinces 2020 carbon dioxide emissions at 660 million tonnes, which is a 30% increase over 2010 emissions levels. To meet the targets, the local government recognizes that the economy will need to shift towards the service sector and implement a variety of reduction measures similar to those that occurred under the 11th Five Year Plan. Key actions include promoting low-carbon development across all sectors, optimizing the structure of energy production and consumption, continuing actions to save energy and improve efficiency, and exploring new mechanisms or institutions for low-carbon development. The government of Shanghai is developing an emissions trading scheme. The emissions threshold for inclusion in the cap may be set at 5,000 tce (tons of standard coal equivalent). There may be up to 800 participants in the market. According to government documents, there will be renewed focus on a number of industries and an effort to continue to grow the quality of the manufacturing sector. With these ambitious national objectives and evolving regulatory programs and new programs including carbon emissions trading scheme and carbon taxes, companies in the ICT sector will be challenged to monitor and respond successfully.


ICT Companies, Value Chain Environmental Stewardship, & Greenhouse Gas Management ICT Companies are increasingly managing their value chains with environmental stewardship and social responsibility in mind. There are a multitude of important reasons for collaborating closely with key partners and suppliers from an economic, social, and environmental standpoint. Recent developments and many news stories affecting many companies have emphasized the inextricable linkages between an organizations success and the responsible performance of its key partners. Stakeholders from a variety of interest areas are asking pointed questions about business impacts. Companies need to be ready to respond to stakeholder interest with initiatives and results that are responsive to interests. If ICT companies expect to continue to grow their product offerings and associated manufacturing activities, their operational characteristics will need to reflect the increasing 12

interest in greenhouse gas emissions as a business performance indicator across the entire value chain of the company. The companies will also need to respond to the potential for greenhouse gas regulation and associated costs of the new operating environment. As greenhouse gas standards and measurement and reporting standards evolve and favor product specific data, it will be increasingly important for companies in the ICT sector to demonstrate increased energy efficiency per unit of product. ICT companies should create methods for information disclosure by value chain partners that can be produced applying consistent calculation methods and summarized and reported to stakeholders. There should be incentives for value chain partners to measure their emissions, set achievable reduction goals and report on their progress. ICT companies should continue to develop methods so that value chain partners provide absolute emission details, and emissions details normalized by an indicator such as total revenue, number of employees or square footage. In that way, changes in emissions, positive or negative, can be understood within the overall context of the organization.

ICT Companies and Value Chain Operations in China Chinas 12th FYP introduced additional stakeholders and regulations into various industrial activities. It will be increasingly necessary for multinational companies operating in China, and worldwide, to develop a clear understanding of the impending changes and the resulting effect on the organization. Greenhouse gas and energy use targets for industrial activities are more aggressive than other sectors of the Chinese economy. This increased scrutiny places additional pressure on industrial operations affecting the ICT sector. As new innovations and technologies evolve, production in China may be more strictly regulated. The government may continue to favor domestic development, and may place domestic development interests over foreign development opportunities. It will be increasingly important for companies operating in China to stay appraised of emerging regulation and to actively engage in industry associations and other groups where information might be exchanged or where influencing the regulations may be possible. Missed annual targets associated with Chinas 12th FYP may create increased pressure to catch up, and regulated industries may face stronger scrutiny or enforcement.

With the variability of greenhouse calculation capability, and the growing demand for responsiveness to a larger group of stakeholders, and with changing operating environments around the world, the expression known as the Chinese curse is apropos for the challenges being faced by ICT companies: May you live in interesting times.


China Regulations Climate Change Greenhouse Gases ICT Sector Scope-3 GHG Supply Chain Value Chain

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