GHG training

Climate and Energy

Jul 2023

Nike Confidential
Nike
Confidential
 FY 23: Climate & Energy deployment strategy

Deployment strategy – Climate, Energy & Renewable Energy

1. Capability 2. Energy 3. Digitalization 4. Onsite RE 5. Offsite RE

Building Efficiency
1.1 Center of Excellence 2.1 Energy Min program 3.1 Internet of Things (IoT) 4.1 Solar PV 5.1 Offsite power purchase
(CoE) agreements (PPA)
2.2 Best practice (BP) 3.2 Digital checklists • Nike Solar Program
management 5.2 Scalable, cost-effective,
1.2 Improve capability in 3.3 Digital learning • Feasibility studies additionality-bearing
partner factories 2.3 Move the Needle –Top3 instruments for renewable
• Guidance/facilitation
electricity
1.3 Tools and knowledge 4.2 Thermal
building Decarbonization

• Biomass

• Innovation
Foundation
Governance Advocacy SCAP
• Strategy Deployment process that is aligned with Partner • Collaborate with GPA/procurement • Suppliers set enterprise wide, SBT aligned, Scope 1&2
Relationship model, to drive performance in Suppliers with targets
“one voice”
• Establish conducive regulatory frameworks, commercial • Suppliers gain better visibility on energy parameters that
structures, financing modalities for Nike suppliers helps them improve operations, reduce climate risk, drive
collective action

Nike Confidential
FY 23: Climate & Energy deployment strategy

1. Capability Building: 1.2 Improve partner capability & 1.3 Tools & knowledge building

Top 3 Largest Gaps:

1. GHG inventory -External Q1’FY24
2. RE: Solar PV –internal Q1-Q2’FY4
3. Bottom making process –Q1’FY24

Nike Confidential
SUPPLIER TRAINING
Greenhouse Gas Emissions Accounting

July 7, 2023
 Kalpesh Tejani
Climate & Energy deployment director
Kalpesh.tejani@nike.com

Nancy Meyer Aicha Slassi Sennou

Global Director of Climate & GHG Inventory Lead

INTRODUCTIONS Energy, Responsible Supply

Chain
Aicha.SlassiSennou@anthesi
sgroup.com
Nancy.meyer@nike.com

Karen Hamilton
Melissa Donnelly Supplier Engagement
Climate Targets Lead Karen.Hamilton@anthesis
Melissa.Donnelly@anthesisgroup.com group.com
AGENDA

01 02 03
Introduction to Frameworks, Standards GHG Accounting
Climate & Regulations Principles
Change & GHG Inven
tories
4 15 27

04 05
Future Trends in GHG
06
Calculating GHG Appendix
Emissions Accounting & Case
Study

37 51 55
INTRODUCTION
TO CLIMATE
CHANGE & GHG
INVENTORIES
 CLIMATE CHANGE
DRIVERS AND IMPACTS

• Fossil fuels – coal, oil and gas – are by

far the largest contributor to global climate
change, accounting for over 75 per cent of
global greenhouse gas emissions.
• Greenhouse gas emissions trap the sun’s
heat. This leads to global warming and
climate change. The world is now warming
faster than at any point in recorded history.
• Warmer temperatures over time are
changing weather patterns and disrupting
the usual balance of nature as seen in the
medium blue circle.
• The light blue circle shows the threats
this poses to human beings and all other
forms of life on Earth.

MetOfficeImpacts.png (1637×1221) (staverton.org)

 CLIMATE SCIENCE Impacts are already occurring and will be much worse at 2°C than previously
 THE FACTS projected.

• We have already realized 1.1°C of warming.

• 2015 Paris Agreement was the catalyst to

pursue efforts to limit increases to 1.5°C.

• 195 Parties out of 198 Parties to the

Convention have signed the Agreement.

• Rapid and transformative change is required,

to avoid the worst effects of climate
change.
WE ARE EXPERIENCING CLIMATE CHANGE TODAY
2021 flooding in China $18.4 billion USD Kentucky Tornado $3.9 Billion USD 13 deaths due to 2023 heat wave in India

Texas Winter Storm $196.5 Billion USD 2021 flooding in India $3.2 billion USD 3rd largest wildfire in California's History
SCIENCE-BASED TARGETS ARE NECESSARY TO LIMIT WARMING
AND AVOID THE WORST EFFECTS OF CLIMATE CHANGE

• The Science-Based Targets (SBTs) Initiative was Min. Absolute

established in response to the Paris Agreement and to Pathway Annual %
Reduction
define a pathway to limit warming and avoid the worst
effects of climate change. 1.5˚C 4.2% 
Well-below
2.5%
2˚C
• SBTs aim to halve emissions by 2030 and eliminate
emissions by 2050, which is aligned with IPCC reports. 2˚C 1.23% 
• Previous IPCC reports concluded that we could avoid the
worst effects of climate change by limiting warming to 2°C
or well below 2°C, but most recent reports find that
effects will be worse than previously expected at those 1.5°C or lower!
temperature increases.

• SBTi has eliminated those pathways as a result.

NEAR TERM VS
NET ZERO
LONG TERM
TARGETS
1 Base Year Emissions:
Greenhouse gas emissions
Near term targets are 5 to in the base year

10 years and are meant to

Near-Term Emissions Target
roughly halve emissions by 2
Reduce emissions in the near-
2030 to avoid the worst term
effects of climate change.

Long term targets aim to 3 Net-Zero Emissions Target

reduce emissions over time Reach Net-Zero emissions by
2050
and achieve Net-Zero
emissions no later than
2050.
2020 2030 2040 2050
 PRESSURE TO MITIGATE AND ADAPT TO CLIMATE CHANGE

Regulators Customers Investors

Policymakers are targeting GHG emissions
issues for regulation. This includes the U.S.
SEC which proposed rules required climate
disclosure of public companies, as well as
additional regulations coming out of Europe.
Large brand retailers, such as Walmart,
Target, and HP, are demanding insights into
their upstream Scope 3 emissions and
engaging with their supply chain to set
emission targets.
Investor requests for GHG data have grown
rapidly as they look to account for climate
risks and opportunities into their investment
decisions.

Employees Peers & Competitors Consumers NGO’s & Activists

Integrating GHG performance and Competitors have advanced GHG Younger generations want to Campaigns around launching globally
good governance into business-as- emissions goals and are positioning purchase from companies who are on greenhouse gas emissions and
usual can help attract the next themselves as climate stewards. looking to minimize their climate climate impact to raise awareness.
generation of talent. impact.

Companies are facing a new operating environment, one in which stakeholder expectations of business have shifted and
traditional corporate social responsibility engagement approaches are inadequate. This is forcing leaders to rethink how
business drives change in the world.
ALIGNING WITH CLIMATE SCIENCE IS GOOD FOR BUSINESS

Source: SBTi
 ALIGNING WITH CLIMATE SCIENCE IS GOOD FOR BUSINESS

Source: https://sciencebasedtargets.org/why-set-a-science-based-target/
WHAT ARE GREENHOUSE GASES & GHG INVENTORIES?

WHAT ARE GREENHOUSE SOURCES OF GREENHOUSE WHAT IS A GHG

GASES (GHGs)? GASES
GHGs trap heat in the atmosphere and Use of electricity, natural
warm the planet. Since the start of the
Industrial Revolution, human activities have gas, refrigerant in buildings
vastly increased the volume of GHGs
emitted into the atmosphere. Use of electricity, petrol &
diesel for transportation
Highest and distribution
Contributor
Purchased goods and
services from vendors
Waste from operations
Lowest
Contributor Business travel through air,
land and/or sea
INVENTORY?
A company’s GHG inventory
quantifies the number of heat-
trapping gases released within
the company's boundary using
standardized (GHG Protocol)
methods.
RESULT
AWHAT
comprehensive breakdown
ARE GREENHOUSE GASES?
that allocates a company’s
emissions appropriately across
Scope 1 (direct emissions),
Scope 2 (indirect emissions),
and Scope 3 (value-chain
emissions).
GREENHOUSE GAS ACCOUNTING OVERVIEW

Input Process Outputs

• Energy Consumption
• Facility Size • Data Analysis • Emissions by Business Segment
• Electricity Usage • Emissions Calculations • Emissions by Facilities
• Employee Headcount • Quality Assurance • Emissions by Geographical
• Business Travel • Inventory Reports Location
• Spend Data
• Etc

Report Analyze
RESULT

WHAT ARE GREENHOUSE GASES?

Check
Calculate
Quality
FRAMEWORKS,
STANDARDS &
REGULATIONS
REGULATORY DEFINITIONS

Framework: A structured approach or set of principles for organizations

to utilize when integrating ESG practices into their operations. “The What”
ex: UN SDGs, IIRC, Paris Agreement

Standard: A set of guidelines or criteria to provide a benchmark for

assessing the performance or practices of an organization (protocols are “The How”
usually considered standards with a specific focus)
ex: GRI, GHG Protocol, ISSB Standards

Regulation: A law, rule or policy implemented by a governmental or

regulatory body to enforce ESG standards and ensure responsible business
“The Why”
practice are implemented.
ex: SEC Regulation, SFRD, CSRD
A BRIEF HISTORY

United Nations Framework Convention on Climate Change (UNFCCC)

1992
A convention that established a global framework for addressing climate change. It
recognized the impact of GHG emissions on the climate and called for international
corporation for mitigation its effects.

The Kyoto Protocol

1997 An international protocol that addresses global warming through efforts to reduce GHG
emissions. It established binding emissions reduction targets for developed countries and
has played a key role in shaping international climate change policy.

GHG Protocol Corporate Standard

2001 A globally recognized standard for accounting and reporting an organization’s GHG
emissions. It provides guidance in determining Scope 1, Scope 3 and Scope 3 emissions,
along with calculation methodologies and reporting requirements

The Paris Agreement

2015 An international treaty negotiated under the UNFCCC, created to combat climate change
and limit global warming to well below 2 degrees Celsius above pre-industrial levels, and
pursue efforts to limit temperature increase to 1.5 degrees Celsius.
 THE BIG PICTURE:
ESG STANDARDS & FRAMEWORKS
BROADLY ACCEPTED CHINA-SPECIFIC
 ISSB Standards: General Requirements for Disclosure of Sustainability-related Financial
Information (S1) and Climate-Related Disclosures (S2) will go into effect Jan 2024. It is expected  China Enterprise Reform and Development
these standards will be broadly adopted. Society (CERDS): A guidance framework for voluntary
 Task Force on Climate Related Disclosures (TCFD): A non-profit that provides a ESG disclosures created by the Assets Supervision &
framework for public companies to measure, report and verify GHG emissions and climate- Administration Commission, with an emphasis on
domestic ESG priorities such as “common prosperity”. It
Standards & Frameworks

related risks and opportunities material to investors.

 GHG Protocol: A widely recognized and commonly used standard for measuring and managing
GHG emissions.
 Global Reporting Initiative (GRI): The GRI is encouraged in line with TCFD, with mandatory
Scope 1, 2 and 3 reporting and universal, sector and topic-based standards for disclosures.
 Sustainability Accounting Standards Board (SASB): An accounting standards board that
reviews the activities of a company within the previous year. It does not mandate Scope 1, 2 or 3
reporting, but has industry-specific ESG reporting criteria.
 European Sustainability Reporting Standards (ESRS) – A framework mandated by CSRD
that requires disclosures for climate-related and ESG matters, with GHG emissions disclosure for
all scopes, and a double materiality assessment conducted and published.
 EU Taxonomy: The EU Taxonomy is a framework established to clarify which investments are
environmentally sustainable, in the context of the European Green Deal. It helps direct
investments to the economic activities most needed for the transition.
NOTE: This is not an exhaustive list of all standards and frameworks, but notes the most relevant ones currently published
aims to establish uniform disclosures tailored to China.
 China Securities Regulatory Commission ESG
(CSRC): Guidelines for disclosing ESG information to
capital markets, including environmental performance,
social responsibility, corporate governance and risk
management.
 Shanghai Stock Exchange ESG Guidance (SSE): A
guidance framework for companies to report on their
environmental impact, social responsibility, and corporate
governance practices. It also provides specific
requirements for information disclosure related to climate
change, energy consumption, and pollution prevention
reporting.
 THE BIG PICTURE:
ESG REGULATIONS
UNITED STATES
 SEC Guidance: The SEC requires public companies
to disclose information that the issuer determines is
Current Regulations
material to investors, including ESG risks &
opportunities, though requirements are open-
ended; few companies report meaningfully
 EPA Reporting (GHGRP): Mandated reporting of
GHG emissions by fossil fuel producers, CO2 injection
sites and other large emitters.
 State Specific Regulations: Certain states have
mandatory reporting requirements – California is the
most notable of these
 SEC Enhanced Guidance: The SEC proposed
Proposed Regulations
amendments to existing ruling, requiring listed
companies to disclose physical and transition
climate-related risks using the TCFD framework in
addition to GHG disclosure and disclosure of climate
targets if a company has them.
 CA Bills: The proposed bills would require
companies > $1b to report Scope 1, 2 & 3 emissions
with widest ESG reporting in the US.
NOTE: This is not an exhaustive list of all regulations, but notes the most relevant ones currently published and being proposed
CHINA
 China Securities Regulatory
Commission (CSCR): Required
ESG reporting for all listed
companies, for information material
to investors.
 Hong Kong Stock Exchange ESG
Requirements (HKEX): The HKEX
mandates reporting of ESG practices
& performance, including emissions
& reduction targets.
 National Strategy for Climate
Change Adaptation 2035: An
initiative that will work towards
carbon neutrality, with control over
energy consumption and energy
efficiency. This will follow an
ecosystem approach, for both
natural ecosystems as well as social
& economic systems.
GLOBAL OR OTHER REGIONS
 Corporate Sustainability Reporting Directive (CSRD
- EU): CSRD requires all large (public & private) companies
to report ESG risks & opportunities via audited, double
materiality.
 German Supply Chain Due Diligence Act (SCDDA):
SCDDA requires supply chain due diligence obligations for
organizations
 Sustainable Finance Disclosure Regulation (SFRD -
EU): SFRD requires a full disclosure of Scope 1, 2 & 3
emissions and initiatives using the EU Taxonomy
framework (Art. 8 obligation). Similar UK regulations exist.
 Corporate Sustainability Due Diligence Directive
(CSDDD - EU): Regulation requires companies to conduct
due diligence on operations and supply chain impacts on
the environment and human rights, mitigate risks and
develop policies to prevent them.
 EU Green Deal – Contains regulations specific to product
sustainability and circularity, for social & environmental
issues, and requires green product claims to be verified
APPAREL-SPECIFIC INITIATIVES

UNFCC FASHION
INDUSTRY CHARTER G7 FASHION PACT EMERGING LEGISLATION

A charter that aims to drive the
fashion industry to achieve Net Zero
by 2050 through a collective
decarbonization plan.
Signatories, including Nike, pledge to
reach Net Zero by 2050, in line with
the latest climate science.
The charter includes commitment to
sourcing 100% renewable electricity
by 2030, sourcing environmentally
friendly materials and additional
commitments.
A global initiative for the fashion and
textile industry that commits to taking
collective action in three areas:
1. Implementation of SBTs to reach
Net Zero by 2050
2. Implement strategies and SBTs for
Nature Biodiversity
3. Reduce negative impact of fashion
on the ocean
Several regions have enacted or are
proposing new legislation affecting
apparel, including Extended Producer
Responsibility (EPR), Uyghur Forced Labor
Prevention Act, Packaging & Waste
Directives, and Persistent Chemistry Bans
(and more).
To keep informed in this space, Hey
Fashion’s Legislation Tracker provides
frequent updates, segmented by region.
MOST RECENT NEWS: ISSB GUIDANCE ISSUED
On June 26, 2023, the ISSB issued the first two disclosure guidance standards for global adoption.

IFRS S1: GENERAL SUSTAINABILITY DISCLOSURES IFRS S2: CLIMATE-RELATED DISCLOSURES

Provide information about significant sustainability-related
risks and opportunities with the goal of assisting users of
general-purpose financial reporting when assessing
enterprise value and deciding whether or not to provide
resources to the company.
Provide information about exposure to climate-related risks
and opportunities to assist users in assessing effects on
enterprise value, understanding resource use, and evaluating
strategy, business model, and operational adaptation ability.

IMPACT TO NIKE SUPPLIERS

ISSB Standards will serve as a voluntary reporting methodology, with jurisdictions around the globe encouraged to mandate them, based on the needs of each
jurisdiction. Voluntary adoption is most likely to begin, with some nations/regions opting for mandatory disclosures in coming years.

The US will likely adopt ISSB
standards for voluntary disclosure by
organizations, relying mainly on SEC
guidance for mandated reporting
requirements.
The UK announced a commitment
to mandate ISSB standards.
The EU has implemented CSRD and
will likely maintain this regulation as
it has broader focus areas.
China has signed an MoU stating
likelihood to adopt ISSB Standards.
ISSB has also opened an office in
Beijing, in anticipation of the new
standards.
INTERNATIONAL SUSTAINABILITY STANDARDS BOARD (ISSB)
EXPLAINED informs scope 3
disclosure

complements

International
Sustainability
Standards
Board
(ISSB)

The ISSB Standards are intended to simplify & clarify the reporting landscape.
Using these, organizations can more easily identify improvements and track progress
towards the UN SDGs and Paris Agreement.
JG0

THE GHG PROTOCOL

The standards developed by the GHG Protocol are the most broadly accepted in Greenhouse Gas (GHG) emissions reporting and
provide a unified framework for organizations to measure their GHG emissions. The GHG Protocol is recommended by the majority of
ESG disclosure and reporting entities.

Corporate Accounting and Corporate Value Chain (Scope 3) GHG Protocol Scope 2 Guidance
Reporting Standard Accounting and Reporting Standard
Slide 26

JG0 Might be helpful to define a standard vs a protocol vs framework vs etc, and share examples + how they link
Jesse Germanow, 2023-07-05T20:30:29.521

JG0 0 Even on this slide alone, the use of "standards" has 2 different meanings (broadly accepted standard + ESG
standards)
Jesse Germanow, 2023-07-05T20:31:56.837

MD0 1 Adjusted language to address this comment.

Melissa Donnelly, 2023-07-06T02:19:01.708

MD0 2 [@Karen Hamilton] should we add a slide that show how these accounting and reporting standards relate to
GRI, SASB, etc. as well as CDP, DJSI, etc?
Melissa Donnelly, 2023-07-06T02:21:39.526

KH0 3 Ive tried this a few ways, and I think there is so much nuance in how to position these standards vs all of the
reporting frameworks. I've asked the strategy team for a recommendation, but for now added a definition slide
Karen Hamilton, 2023-07-06T20:38:17.596
LEADING CLIMATE TARGET SETTING STANDARD
NIKE’S SCIENCE BASED TARGET

NIKE, Inc. has set an SBT to reduce absolute Scope 1 and

2 GHG emissions 65% by 2030 from a 2015 base year.

 The targets covering greenhouse gas emissions from company

operations (scopes 1 and 2) are consistent with reductions
required to keep warming to 1.5°C.

NIKE, Inc. also set a target to reduce absolute Scope 3

GHG emissions 30% within the same timeframe.

 As part of this, NIKE, Inc. has implemented its Supplier Climate

Action Program (SCAP) to enable its suppliers to measure their
GHG Inventories and set emissions reduction targets, in line with
the latest climate science.

 SCAP creates an opportunity for NIKE, Inc.’s sourcing partners to

drive sustainability from the inside, creating operation changes
FRAMEWORKS,
STANDARDS AND
REGULATIONS IN A
NUTSHELL

As the climate continues to change,

companies need to assess their impacts and
risks and identify opportunities to mitigate
climate change and how it affects
business.

Regulatory bodies, as well as key

stakeholders, including investors and
customers, use standards and frameworks
as a basis to develop these regulations and
requirements for companies to comply
with.

• Frameworks provide the approach

• Standards define the criteria

Keeping up to date ensures a sustainable

business and competitive edge.
GHG
ACCOUNTING
PRINCIPLES
WHAT ARE GREENHOUSE GHG PRIMER
GAS (GHG) EMISSIONS?
The GHG inventory covers seven direct
greenhouse gases under the Kyoto
 Greenhouse gases trap heat from the sun and warm the Protocol
planet’s surface
 Carbon dioxide (CO2)
 Methane (CH4)
 According to the IPCC Report, emissions of greenhouse gases  Nitrous oxide (N2O)
from human activities are responsible for approximately  Hydrofluorocarbons (HFCs)
1.1°C of warming since 1850-1900  Perfluorocarbons (PFCs)
 Sulphur hexafluoride (SF6)
 Primary anthropogenic sources of GHG emissions are the  Nitrogen trifluoride (NF3)
burning of fossil fuels for electricity, heat and transportation
To normalize the impact of different gases,
emissions are reported in carbon dioxide
equivalency units (CO2e)

Stationary Process & Mobile Purchased

Combustion Purchased
Combustion Refrigeration Heating &
Electricity
Gases Cooling
GLOBAL WARMING POTENTIAL
BEYOND CO2

Global warming potential (GWP): A measure of how much

a greenhouse gas contributes to global warming relative to CO2
GWPs convert tones of a GHG to tones of carbon
dioxide equivalent (CO2e) to calculate total emissions using
a common unit.

WHY IT MATTERS
Accurate Accounting: Accounting of all greenhouse gas
emissions without addressing each one’s global warming
potential would contribute to inaccurate measurements and
reporting.

Reduction Opportunities: Using the GWP framework,

organizations can accurately target lowest-hanging fruits to
reduce their emissions. For some, this will mean beginning
with finding alternatives to low-volume and high impact
products such as fluorinated gas alternatives.
JG0

OPERATIONAL BOUNDARY:
SCOPE 1, 2 AND 3 GHG EMISSIONS

Scopes 1-3
GHG emissions are categorized into Scopes, defined by operational
boundaries in relation to direct and indirect GHG emissions.

Direct emissions from sources owned or controlled

Scope 1 by the company, such as combustion of fuels on-site
or in owned/leased vehicles & emissions from
refrigerant leaks.

Indirect emissions from generation of purchased

Scope 2 electricity, heating, cooling, or steam for the
company.

Other indirect emissions resulting from company

Scope 3 activities such as manufacturing, transportation &
distribution, business travel, consumer use, etc.

Nike SCAP requires measurement of Scope 1 and 2

emissions within the boundary of your target
Slide 33

JG0 Recommend dropping the 95% reference from the orange text
Jesse Germanow, 2023-07-05T20:39:12.666

MD0 0 Done
Melissa Donnelly, 2023-07-06T02:22:46.111
JG0

COMMON SOURCES OF GHG EMISSIONS

OPERATIONAL EMISSIONS VALUE CHAIN EMISSIONS

Scope 1 Scope 2 Scope 3 – upstream Scope 3 - downstream

 Fuels used in operations  Purchased utilities  Product materials processing  Downstream transportation
 Natural gas  electricity and manufacturing and distribution
 Indirect procurement  Processing of sold products
 Fuel oil  steam/heat
 Diesel  chilled water  Capital goods  Use of sold products

 Gasoline  Fuel/energy related activities  End-of-life treatment of sold

 Upstream transportation and products
 Propane, etc.
distribution  Downstream leased assets
 Refrigerants and process
 Waste generated from  Franchises
gases
operations
 Mobile fuels used in vehicles  Investments
 Business travel
 Diesel
 Employee commuting
 Gasoline
 Propane, etc.
Slide 34

JG0 The scope 3 portion appears to be similar/identical to slide 31, so suggest combining the 2
Jesse Germanow, 2023-07-05T20:42:08.704

MD0 0 moved the slide up so it can compliment the previous slide.

Melissa Donnelly, 2023-07-06T02:24:07.316
ORGANIZATIONAL BOUNDARIES FOR GHG ACCOUNTING
Determine which activities an organization owns, controls or operates

EQUITY APPROACH CONTROL APPROACH

Equity Share Financial Control Operational Control

Organization accounts for GHG
emissions from operations
according to its share of equity in
the operation. The equity share
reflects economic interest, which
is the extent of rights a company
has to the risks and rewards
flowing from an operation.
Organization accounts for 100% of
the GHG emissions from operations
over which it has either financial
or operational control.
Financial control means that an
organization may have financial
control over the operation even if
it has less than a 50% interest in
that operation.
Organization accounts for 100% of
the GHG emissions from operations
over which it has either financial
or operational control.
Operational control means that an
organization has the authority to
introduce and implement its
operating policies (from how the
building is managed, to control of
thermostats or light switches)
EXAMPLES OF SCOPE 1, 2 & 3
FOR DIFFERENT BUSINESSES

Parent company with multiple Vendor that both owns/operates Vertically integrated
subsidiary companies and outsources manufacturing manufacturer

• Scope 1: Includes direct emissions from
energy/fuel use in all owned/operated parts of
the business, including subsidiary companies’
direct emissions
• Scope 2: indirect emissions from purchasing
electricity/steam/chilled water for all owned
and operated facilities
• Scope 1: Includes direct emissions from
energy/fuel use in all owned/operated parts of
the business, including all owned/operated
manufacturing facilities
• Scope 2: indirect emissions from purchasing
electricity/steam/chilled water for all owned
and operated facilities
• Scope 1: Includes direct emissions from
energy/fuel use in owned/operated facilities and
operations across production stages
• Scope 2: indirect emissions from purchasing
electricity/steam/chilled water for all
owned/operated facilities across all production
stages

• Scope 3: All indirect value chain emissions of
the parent and subsidiary companies (e.g.
manufacturing, distribution, product use)
• Scope 3: All indirect value chain emissions,
including from outsourced manufacturing and
downstream emissions (e.g. third-party
distribution to DCs)
• Scope 3: All indirect value chain emissions, both
upstream (e.g. material manufacturing if
materials are being purchased from a supplier,
and/or raw materials extraction) and
downstream (e.g. third party distribution to DCs)

Note on leased facilities & fleet: Emissions from leased facilities or fleet are typically counted in scope 1 and 2 if your company operates these assets;
however if you choose not to count them in scope 1, they must be counted in scope 3 (upstream or downstream leased assets) – just make sure not to
double count leased asset emissions regardless of how you choose to account for them.
DATA COLLECTION & CALCULATION

Calculation Methodology Data Collection Approach

The most widely recognized accounting standard is the  Data Sources
GHG Protocol. To ensure consistent and accurate data  Utility Bills
collection:
 Fuel Consumption Records
 Maintain a consistent accounting approach  Production Data, etc.

 Utilize most up to date emissions factors  Data Collection Frequency

 Make a note of all assumptions made throughout  Recommended on a yearly cadence
the process
 QA/QC Process
 Internal data validation
 Verification of inventory through 3rd party
EMISSIONS FACTORS

Emissions factors provide a mechanism to estimate the amount of emissions that result from a specific activity or process.
• Physical activity factors (scope 1 & 2): Most commonly is expressed as a quantity of CO2e emitted from a specific energy
source (e.g. MT CO2e per mmBTU of natural gas) or quantity of CO2e emitted associate with purchasing electricity in a specific
location (e.g. MT CO2e per MWh electricity in Vietnam)

Metric Tons CO2 = electricity use (MWh) x emissions factor ( )

• Environmentally-extended input output (EEIO – Scope 3): EEIO models estimate energy use and/or GHG emissions resulting
from the production and upstream supply chain activities of different sectors and products within an economy. They are
derived by allocating national GHG emissions to groups of finished products based on economic flows between industry sectors
and expressed as kg CO2e/$ spend.

• Sources for emissions factors:

– Government publications e.g. US EPA eGRID (US) and IEA Fuel and Country (Global)
– Licensed 3rd party databases e.g. Ecoinvent for product related emissions factors; or Peer-reviewed studies for product-
specific factors
CALCULATION TIMEFRAME REPORTING PERIOD

Baseline Year: Most common reporting periods are

The baseline year is a reference point of emissions, against which future annual. Choose the approach that is
emissions reductions may be measured. It serves as a benchmark. consistent with the calculation from
your baseline year. Options may
Selection: include:
Your base year (i.e. baseline year) should be the most recent,
representative, 12-month period between 2015-2022.  Company Fiscal Year
 Calendar Year
Re-Calculation:
Baseline Years are used as a benchmark, but may need to be recalculated
if the following occurs:
 Significant changes in organizational structure (e.g.
mergers, acquisitions, divestitures)
 Significant changes in calculation methodology (e.g. improved activity
data or emissions factors)
 Discovery of significant errors (set a threshold upon which a recalculation
would be triggered)
CALCULATING
GHG EMISSIONS
BUILDING A GHG INVENTORY FOR
SCOPE 1 & SCOPE 2
INVENTORY NEEDS INVENTORY RESPONSIBILITIES BUSINESS FUNCTION

Buy-In
• Can support inventory development project through
 Socialization and awareness raising Leadership Team
 Providing budget or resources

Defining the • Can identify types of assets owned, leased or operated by the
Asset Management Teams
company and their locations
Inventory Boundary
• May have asset details relevant to an inventory such as square
footage, usage dates, available data
• May have insights into mergers and acquisitions
Sustainability Team

Data Collection • Collects energy invoices (e.g., electricity, natural gas, bills)
• Has insights into site level operations and specific energy types
consumed at the site Building or Facilities
• May have access to sub-metered energy information if Managers
applicable
A GHG INVENTORY IS THE FOUNDATION FOR CLIMATE ACTION
To take action on climate, organizations must understand where in their own operations and in their supply chain they are
producing Greenhouse Gas (GHG) emissions so they can set a baseline (inventory) of their emissions.

DEVELOP AN INVENTORY SET A TARGET IMPLEMENT REDUCTIONS

DEFINE YOUR
MEASURE YOUR
BOUNDARY & DEVELOP DEVELOP A TRACK PROGRESS &
CARBON
COLLECT ENERGY A TARGET REDUCTION PLAN INCREASE AMBITION
FOOTPRINT
DATA

Convert energy data to emissions Energy efficiency &

Engage stakeholders Define baseline year Monitoring & Measuring
data onsite renewables

Use science-based models to set

Identify company assets Renewable energy procurement Reporting & communications
targets

Obtain energy data Gain buy-In for targets Supply chain engagement Aim for Net-Zero

Commit to target

TIME
 GHG INVENTORY STEPS

Scope Collect Review and Estimate Finalize

and Plan
• Review GHG accounting standards
and methods for company reporting
• Determine organizational and
operational boundaries
• Define base year
• Consider third-party verification
Data
• Identify data requirements and
preferred methods for data collection
• Develop data collection procedures,
tools, and guidance materials
• Compile facility data
Data and Report
● Review facility-level data and ● Finalize data
resolve potential issues ● Formalize data collection
● Estimate missing data to fill gaps procedures
● Complete third-party verification
(optional)
● Report requested data
FOLLOW THESE STEPS TO INITIATE APPROPRIATE DATA
COLLECTION, COLLECT THAT DATA EFFECTIVELY, AND
IDENTIFY GAPS AND ASSUMPTIONS THAT NEED TO BE MADE.

Solidify organizational data Identify emissions sources within your operational control or in relevant Scope 3 categories, what
#1 owners and data sources (Scope data corresponds with those sources, and who is likely to own that data in your organization;
1, 2, 3) checklist!

Send initial emails requesting data, or set up introductory calls with likely data owners to identify
#2 Perform initial engagement
the correct point of contact, the data available, and collection timeline

Make sure to follow up with and support your data owners to deliver the data on the agreed
#3 Follow up, get involved
timeline, and build partnerships (as they will be important for future years!)

Identify and track gaps and Make note of any assumptions or data gaps you may encounter, and make appropriate estimates and
#4 assumptions replacements where necessary; these can be improved in future years

Populate data into tool/storage, Collect the data centrally, and begin populating tools/centralized data trackers to support
#5 record process calculation; consolidate notes on process, gaps, and data owners into an Inventory Management Plan
BUILDING ENERGY USAGE
GETTING STARTED WITH DATA COLLECTION
There are two main types of energy sources in a scope 1 and 2 inventory –
energy use by buildings and fuel use by vehicles, aviation, and other
forms of transportation.
The best and easiest source documents for building energy usage are
invoices! These can be requested directly from your utility providers and
can be sometimes be provided for a full calendar year.
If you cannot obtain invoices, you can estimate data using building type,
location and square footage.

Common sources of scope 1 and 2 emissions

• Electricity
• Natural gas
• Purchased heat or cooling
• Refrigerants
DECIDING WHICH EMISSIONS SOURCES APPLY TO YOU
1
Scope 1-2 Data Collection Checklist

Emission Type Description Data Required

Direct emissions occurring onsite from fuel combustion (e.g., 1. Fuel type
1 - Stationary Emissions natural gas, propane, diesel, coal, biomass) in stationary equipment 2. Fuel usage
to produce electricity, heat, or steam. 3. Fuel units (volume or weight)

Two of the following:

1 - Mobile Emissions
Emissions from fuel combustion (e.g., diesel, biodiesel, gasoline,
1. Total fuel used by each vehicle
aviation gasoline, CNG) by vehicles owned or leased by your
2. Total distance traveled by each vehicle
company.
3. Fuel efficiency of each vehicle

1. Refrigerant type
2. Quantity of gas serviced
Leaks in your company's refrigeration and air conditioning 3. Quantity of gas recycled
1 - Fugitive Emissions 4. Units for quantity serviced or recycled
equipment through which refrigerant gas escapes.
Quantity of leaked gas is assumed to equal amount of gas replaced by your
maintenance company.

1. Energy source
Indirect emissions from electricity, steam, and hot/chilled water
2 - Purchased Energy 2. Energy usage
purchased from your local utility (not combusted on-site).
3. Units (kWh for electricity)

1 The data collection checklists describe the most commonly reported GHG emissions. Additional scope 1 emissions include process emissions and other fugitive emissions (e.g., methane leakages from gas transport).

Additional scope 3 emissions include other business travel emissions (e.g., hotel stays), other waste emissions (e.g., wastewater treatment), and emissions associated with purchased goods and services, capital
goods, fuel- and energy-related activities (not included in scope 1-2), leased assets, processing and use of sold products, end-of-life treatment of sold products, franchises, and investments.
CALCULATING GHG EMISSIONS

GHG emissions are measured in mass of carbon dioxide equivalents (CO2e)

Emission Factors: Global Warming Potentials (GWPs):

Representative value that attempts to relate the quantity of a
pollutant released to the atmosphere with an activity associated
with the release of that pollutant
• Electricity:
○ eGRID2020 (US EPA)
○ CO2 Emissions from Fuel Combustion (IEA)
○ International Electricity Emission Factors by Country
(IEA)
• Combustion
○ Emission Factor Hub 2022 (US EPA)
○ Guidelines for National GHG Inventories (IPCC)
Different GHGs can have different effects on the Earth's
warming. GWPs were developed to allow comparisons of
the global warming impacts of different gases
● Compares amount of heat trapped by a given mass of a
GHG to amount of heat trapped by similar mass of CO2
● Converts mass of various gases to mass of CO2e
● Recommend using 100-year GWPs from IPCC Fifth
Assessment Report (AR5)

Metric Tons CO2e Emissions =

Metric Tons CO2 Emissions =
( ) (
Metric Tons CO2 + Metric Tons CH4 × CH4 GWP + Metric Tons N2O × N2O
( ) ( )
Electricity Use MWh × Emissions Factor Metric Tons CO2 / MWh
GWP )
 CALCULATING GHG EMISSIONS - SCOPE 1 EXAMPLE

Example: An organization purchased 4,000 million Btu of natural gas in the reporting year. Emissions calculations for
the natural gas use are as follows:

Calculate Emissions Convert to CO2e Sum

4,000 (mmBtu) × 0.05306 (Metric Tons CO2 / mmBtu) 212.24 (mtCO2) × 1 =

CO2

= 212.24 mtCO2 212.24 mtCO2e 212.24 (mtCO2e) +

0.11 (mtCO2e) +

4,000 (mmBtu) × 0.000001 (Metric Tons CH4 / mmBtu) 0.004 (mtCH4) × 28 = 0.11 0.11 (mtCO2e)
4
CH4
CH

= 0.004 mtCH4 mtCO2e

= 212.46
4,000 (mmBtu) × 0.0000001 (Metric Tons N2O / mmBtu) 0.0004 (mtN2O) × 265 = mtCO2e
NN22OO

= 0.0004 mtN2O 0.11 mtCO2e

Emission factor source: Emission Factor Hub 2022 (US EPA)

 CALCULATING GHG EMISSIONS - SCOPE 2 EMISSIONS (FROM PURCHASED
ELECTRICITY)

Companies must quantify and report electricity emissions using a location-based method and/or a market-based
method. Please see the electricity emissions calculation guidance for more information.

Method Explanation Emission Factor

Uses average emission factors for the electricity grids that provide electricity to a Grid average
Location-based reporting organization (e.g., eGRID)

Considers contractual arrangements under which the reporting organization procures Most specific factor
Market-based power from specific suppliers or sources, such as renewable energy available
CALCULATING GHG EMISSIONS - SCOPE 2 EXAMPLE (C6.3)

Example: An organization with facilities in China purchased 200,000 MWh of electricity in the reporting year.
Emissions calculations for the electricity purchases are as follows:

Calculate Emissions Convert to CO2e Sum

200,000 (MWh) × 0.764 (Metric Tons CO2 / MWh) 152,800 (mtCO2) × 1 =

CO2

= 152,800 mtCO2 152,800 mtCO2e 152,800 (mtCO2e) +

81 (mtCO2e) +

200,000 (MWh) × 0.0000146 (Metric Tons CH4 / MWh) 2.9 (mtCH4) × 28 = 980 (mtCO2e)
CH4

= 2.9 mtCH4 81 mtCO2e

= 153,861
200,000 (MWh) × 0.0000184 (Metric Tons N2O / MWh) 3.7 (mtN2O) × 265 = 980 mtCO2e
N2O

= 3.7 mtN2O mtCO2e

Emission factor source: International Electricity Emission Factors by Country (IEA); Emission Factor Hub 2022 (US EPA)
CALCULATING GHG EMISSIONS - SCOPE 2 EXAMPLE

Example continued: The organization decides to purchase Renewable Electricity Certificates (RECs) for half of its
electricity purchases. Market- based emissions calculations for the electricity purchases are as follows:

Calculate Emissions Convert to CO2e Sum

( )
100,000 MWh × 0.764 Metric (
76,400 (mtCO2) × 1 =
100,000 (MWh) × 0.764 (Metric Tons CO2 100,000 (MWh) × 0 (Metric Tons CO2 /
CO2

)
/ MWh) MWh)
Tons CO2 /mtCO2
= 76,400 MWh = 0 mtCO2 76,400 mtCO2e 76,400 (mtCO2e) +
= 76,400 mtCO2
42 (mtCO2e) +
( )
100,000 MWh × 0.0000146
490 (mtCO2e)
1.5 (mtCH4) × 28 =
100,000 (MWh) × 0.0000146 (Metric Tons 100,000 (MWh) × 0 (Metric Tons CH4 /
CH4

( )
CH4 / MWh) MWh)
Metric=Tons CH4 / MWh
1.5 mtCH4 = 0 mtCH4 42 mtCO2e
= 1.5 mtCH4 = 76,985
( )
100,000 MWh × 0.0000184
100,000 (MWh) × 0.0000184 (Metric Tons 100,000 (MWh) × 0 (Metric Tons N2O /
1.85 (mtN2O) × 265 = 490 mtCO2e
N2O

( )
N2O / MWh) MWh)
Metric=Tons N2O / MWh
1.85 mtN2O = 0 mtN2O mtCO2e
= 1.85 mtN2O
Emissions from grid electricity Emissions from RECs

Emission factor source: International Electricity Emission Factors by Country (IEA); Emission Factor Hub 2022 (US EPA)
ABOUT RENEWABLE ELECTRICITY

Renewable energy claims should only be made by organizations that possess

EACs and have documentation for the exclusive claim
● “Energy attribute certificates” (EACs): credits that are created every time one megawatt hour
(MWh) of renewable electricity is generated and put on the grid
○ Proves that 1 MWh of renewable energy was generated, and it embodies all of the green,
environmental benefits of that MWh
○ When a company buys an EAC, they are buying renewable electricity and can claim all of the
environmental benefits of that MWh. This is a means of reducing GHG emissions from electricity
purchases.

Examples of EACs: Renewable sources:

Key Points: ● RECs ● Wind
● EACs are separate from the physical distribution of energy ● I-RECs ● Solar
● EACs represent a contractual arrangement to procure the ● GOs ● Hydropower
environmental benefits of renewable energy generation ● REGOs ● Geothermal
● If you purchase electricity from a state, private, public, or municipal ● J-Credits ● Biomass
electricity utility or supplier, you should only report this as renewable ● Marine (tidal, wave)
electricity if an exclusive claim to the use of unique renewable
electricity generation can be made

Read more: GHG Protocol Scope 2 Guidance

FUTURE TRENDS
IN GHG
ACCOUNTING
& CASE
STUDIES
FOREST, LAND AND AGRICULTURE
GUIDANCE (FLAG)

The SBTi’s FLAG Guidance provides the

world’s first standard method for
companies in land-intensive sectors to
set science-based targets that include
land-based emission reductions and
removals. The guidance enables
companies to reduce the 22% of global
greenhouse gas emissions from
agriculture, forestry and other land
use.
 FLAG VALUE CHAIN
FLAG Emissions Non-FLAG Emissions

Food Production Food Production Food & Beverage Processing Food & Staples Retailing Waste Managers
Agriculture Production Animal Source
Food System

Intermediate Final

Forest & Paper Products Forest Product Processing Retailing Waste Managers
(forestry, timber, pulp,
Forest Products System

paper, and rubber)

Intermediate Final
UPDATES TO THE GHG PROTOCOL

• The Greenhouse Gas Protocol is undergoing a process to update its

standard and guidance documents (changes not likely until 2024)
"Unbundled" energy
• The Scope 2 Guidance has received particular attention, and some believe attribute certificates (EACs,
there will be significant changes to the market-based (MB) accounting or RECs) are EACs that have
method, and/or how unbundled EACs (i.e. RECs) can be used been separated from the
underlying electricity, and
• Potential outcomes:
sold to companies to address
o MB accounting method remains unchanged their Scope 2 emissions.
o MB method remains generally unchanged, but the Guidance is updated to require more Many of our clients use
impactful methods of renewable energy procurement, like PPAs or onsite solar unbundled EACs
o Unbundled EACs are expressly prohibited from MB accounting
o Wholesale changes are made to the MB method, such as shifting to an "emissionality"
approach, or requiring more granular or marginal emission factors
APPENDIX
ONCE AN ORGANIZATION HAS DEVELOPED AN INVENTORY AND
ANNOUNCED A TARGET, THEY CAN FOCUS ON HOW TO REDUCE
EMISSIONS

DEVELOP AN INVENTORY SET A TARGET IMPLEMENT REDUCTIONS

DEFINE YOUR
MEASURE YOUR
BOUNDARY & DEVELOP DEVELOP A TRACK PROGRESS &
CARBON
COLLECT ENERGY A TARGET REDUCTION PLAN INCREASE AMBITION
FOOTPRINT
DATA

Convert energy data to emissions Energy efficiency &

Engage stakeholders Define baseline year Monitoring & Measuring
data onsite renewables

Use science-based models to set

Identify company assets Renewable energy procurement Reporting & communications
targets

Obtain energy data Gain buy-In for targets Supply chain engagement Aim for Net-Zero

Commit to target

TIME
IDENTIFY EMISSIONS REDUCTION OPPORTUNITIES
EXAMPLE LIST OF GHG REDUCTION MEASURES

Scope Aspect Potential Initiatives

Buildings Efficiency measures for natural gas, diesel, and refrigerants

Transition from natural gas to electric (i.e., electrification of all gas-using equipment such as
Buildings
Scope 1 boilers, hot water heaters, etc.)

Buildings Phase out refrigerants

Mobile Combustion Transition of company fleet to electric vehicles

Increase renewable energy via use of onsite solar, renewable energy certificates, PPAs &
Buildings
VPPAs

Scope 2 Buildings Electricity efficiency measures for all owned sites and leased sites (LED retrofits)

Green Lease clauses that include 100% renewable energy requirement for multi-tenant office
Buildings
spaces
Purchased Goods and Light weighting packaging, transitioning to organic cotton or renewable and low carbon raw
Services materials

Employee Commute EV adoption by employees, ride shares, transit passes

Scope 3
Business Travel Increase use of Sustainable Aviation Fuel (SAF), increase % of flights with biofuels

Use of sold products Energy Star, increased efficiency and addressing consumer behavior
STRATEGIES TO REDUCE SCOPE 1 EMISSIONS (NATURAL GAS AND FUELS)

Energy Efficiency and

Electrification

• Identify facilities that are the

most energy intensive and
consider options to improve
efficiency, including:
• lighting and HVAC upgrades,
• equipment settings, and
• shutting down equipment when
it's not being used.
• If your operations are heavier on
scope 1 emissions than scope 2
emissions, you can consider
electrifying equipment so that
you can then source renewable
energy to power that
equipment
STRATEGIES TO REDUCE SCOPE 2 EMISSIONS (ELECTRICITY)

Renewable Energy

There are several options to

integrate renewable energy into
your operations, including:
• Utility green tariffs
• Renewable energy credits
• Virtual Power Purchase
Agreements
• Onsite generation and Physical
Power Purchase Agreements
RENEWABLE ELECTRICITY: MOST COMMON OPTIONS
Utility Green Tariffs
Pros
• Optional enrollment if offered
• Relatively low-cost premium
• RE could be owned by utility
Cons
• Not offered by all utilities
Renewable Energy Credits
Pros
• Readily available for most countries
• Quick procurement (30-60 days)
• Flexibility in volume each year
Cons
• Subject to market risks; REC pricing in NA
has doubled within past 1 year
• Limited options and regulations in APAC
and Central/Latin America
• GHG Protocol may adjust guidance that
would limit using unbundled RECs to
account for emissions reductions
Virtual Power Purchase
Agreements (VPPA)
Pros
• Remote financial contract
• New RE added to grid
• Potentially breakeven or revenue-
generating
• Can offer additionality
Cons
• Subject to market risks; potentially
costly if market is lower than
contract price
• Limited options for smaller contracts
Onsite RE / Physical Power
Purchase Agreement (PPA)
Pros
• System visible at sites
• New RE added to grid
• Onsite clean/backup power
• Offers additionality
Cons
• Potentially high capital $ and
construction time
• Limited for leased space
• Limited generation capacity
ENERGY ATTRIBUTE CERTIFICATES

EACs are traditionally the most common method for sourcing REC Purchase: RECs purchased
renewable energy and involve a simple annual purchase. EACs must from eligible RE project
be matched to actual electricity consumption in order to be used
as renewable electricity.

There are several types of EACs globally, defined by the

geographical market of purchase. These include, but are not
limited to:
− Renewable energy certificates (RECs) – North America
− Guarantees of origin (GOs) – Europe
− Renewable energy guarantees of origin (REGOs) – UK
− Large-scale generation certificates (LGCs) - Australia
Energy: Electron transfer
− International renewable energy certificates (IRECs) – various from local grid network
− Tradeable instruments for global renewables (TIGRs) - various
ACCOUNTING FOR ENERGY ATTRIBUTE CERTIFICATES

Energy Attribute Certificates (EACs) are established

instruments that allow electricity consumers to make and
verify their renewable electricity claims. EACs can be
1 MWh electricity

+
quickly deployed to help meet renewable energy targets,
particularly in countries and regions where other renewable
procurement solutions are challenging or unavailable.

For each megawatt-hour (MWh) of electricity generated by

wind, solar, and other renewable sources put onto the grid,
one EAC is also created. 1 EAC

=
EACs convey the renewable attributes of those MWhs of
electricity, and combined with one MWh of electricity
create one MWh of renewable electricity.

1 MWh renewable
electricity
EAC CERTIFICATION AND VERIFICATION PROGRAMS

To ensure EACs are procured from high-quality projects and

are not double-counted or double-sold by market
participants, companies should source EACs that have been
certified by reputable third-party verification bodies.

Green-e Energy, The International REC Standard, and EKO

Energy are three of the most used third-party certification
programs. These programs are recognized by CDP, RE100, and
other climate NGOs as ensuring quality renewable energy
claims.

Other country-specific programs exist in various markets, but

companies should always conduct research before trusting
ecolabels marketed by EAC providers.
CREATE A ROADMAP OR PLAN FOR REDUCTIONS
Suite of emissions reductions
to be implemented

Include:
• Activities Projected emissions under
business-as-usual scenario.
Business growth factored in.
• Timeline

• Percent reductions

• Investments required Target pathways

• Stakeholders accountable for

delivering results
• Internal processes to
integrate activities into
Project emissions pathway as
emissions reductions are
implemented

• Business as Usual emissions

projections
GHG TERMS
Greenhouse gases (GHGs): GHGs are naturally occurring gases in the earth’s atmosphere that absorb and re-emit radiation, trapping heat and making
the planet warmer, known as the greenhouse effect. There are seven major GHGs: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and the recently added and nitrogen trifluoride (NF3). The
consumption of fossil fuels is associated with an increase in the presence of these gases in the atmosphere and with climate change.

Indirect energy: Indirect energy is the energy obtained from purchased electricity, heat, or steam. This type of energy is obtained from a third-party,
such as a utility provider. Indirect energy produces what are known as Scope 2 emissions under the GHG Protocol.

Onsite fuel combustion (direct): Any fuels combusted by a company-owned asset, such as natural gas used in a boiler or a back-up generator that
runs on diesel fuel.

Operational boundary: Defined scope of both direct and indirect emissions within an organizational boundary. When defining operational boundaries,
the entity must specify who/what is responsible for emissions, i.e. the entity itself or a 3rd party.

Organizational boundary: Those businesses and operations that make up an organization for the purpose of accounting for and reporting GHG
emissions.

Purchased energy (indirect): Energy that is sourced by a third-party provider and purchased by the organization. For example, natural gas purchased
from a utility or a governmental agency.

Purchased steam: Steam that is generated by a third-party provider and then purchased by the organization.

Renewable energy: Energy derived from naturally occurring, repeatable, and replenishing sources. Types of renewable energy include geothermal,
solar, wind, ocean and other forms of hydropower, biomass, etc.

Science-based targets: Emissions reductions goals that are in line with what the latest climate science says is necessary to keep global temperature
rise at safe levels. https://sciencebasedtargets.org/what-is-a-science-based-target/
 GHG TERMS
Base year: As greenhouse gas (GHG) accounting is an ongoing process, the first emissions inventory that is conducted is known as the base year.
The base year is used as a point of reference to track changes in an inventory as well as progress toward reduction goals.

Baseline metrics: Basic or beginning measurements. Baseline metrics are valuable when setting management and/or reduction goals in order to
have something to compare against when making improvements, diagnosing inefficiencies, or tracking progress.

CO2e: Emissions of different greenhouse gases are often expressed in carbon dioxide (CO2) equivalent (CO2e) terms, which represents the amount
of carbon dioxide that would have the same relative effect as the greenhouse gases actually emitted.

Direct energy: Direct energy is energy that is produced on-site by the consumption of fuel. Direct energy produces what are known as Scope 1
emissions in the World Resource Institute’s GHG Protocol.
JG0
Emissions: The exhaust gas(es) produced as the result of fuel combustion.

Energy efficiency projects: Capital investment in projects to achieve an overall reduction in energy consumption or a less energy intensive
production process. Examples include low-hanging fruit such as behavioral changes or more intensive initiatives such as equipment retrofits.

Energy or GHG reduction emission targets: Goals set by an organization to reduce its energy consumption or greenhouse gas (GHG) emissions.
This goal is typically set by measuring an organization’s energy consumption and/or GHG emissions and establishing a start date (baseline), setting
an appropriate and achievable target, and outlining a reduction plan that can be achieved by a specific date.

Environmental policies & reporting: Standards and protocols developed by various agencies to track and disclose environmental and social
impacts. Environmental reporting and management standards help organizations identify how to reduce or mitigate their environmental impacts.
Standards and protocols include ISO 14001, the Global Reporting Initiative, and the Carbon Disclosure Project.

GHG Protocol: The GHG Protocol is the most widely used, internationally accepted tool for accounting for greenhouse gas emissions. It was
developed by the World Resources Institute and the World Business Council for Sustainable Development. http://www.ghgprotocol.org/
Slide 68

JG0 Under Direct Energy, WRI = Resources, not Reporting

Jesse Germanow, 2023-07-05T20:34:37.078