Materiality Assessment and Greenhouse Gas Emissions

Meeting Sprint’s Supplier Criteria:

As of Sept. 24, 2013Version 1.0

This document is intended to be read only as a summary of, and in the context of, Sprint’s experience with corporate responsibility goals and practices, and is based only on information made available to Sprint as of the date written.

Sprint does not intend this document to be a tutorial, handbook, or recommendation regarding corporate responsibility practices, designation or certification; compliance with laws, regulations, governmental requirements, or governmental or industry standards.

Suppliers should not rely upon or cite this document in designing and implementing their own corporate responsibility practices or otherwise. Suppliers should engage their own experts, advisors, and counsel regarding all corporate responsibility matters. The text of this document may not be complete or comprehensive and may omit information regarding its subject matter.

Sprint makes no representation or warranty regarding the accuracy or content of this document, provides this document “AS IS”, and expressly disclaims all war-ranties regarding this document, whether express or implied, including any warranty of merchantability or fitness for a particular purpose.

This document is subject to change at any time, without notice, in Sprint’s sole discretion.

© 2013 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient. Any review, use, distribution or disclosure is prohibited without authorization.

Chapter 1: Corporate Responsibility and why it matters 21.1: Sprint’s commitment to Corporate Responsibility (CR) 2

1.2: What Sprint expects from your company 2

1.3: What’s in it for your business? 3

Chapter 2: Materiality assessment 42.1: Introduction 4

2.2: Get ready 7

2.3: Create a list of relevant topics 8

2.4: Score from both a business and stakeholder perspective 11

2.5: Review the results 17

2.6: Develop a plan and take action 18

2.7: Fulfilling Sprint’s materiality criteria 19

Chapter 3: Measuring, reporting and reducing Greenhouse Gas (GHG) Emissions 20

3.1: Understanding the basics of climate change 21

3.2: Fundamentals of GHG measurement 24

3.3: Get ready 26

3.4: Collect the data 29

3.5: Turn your activity data into GHG emissions 32

3.6: Document and report your results 35

3.7: Develop a plan to reduce GHG emissions 37

3.8: Where to go from here 38

3.9: Fulfilling Sprint’s criteria 39

APPENDIX A – Materiality topic definitions and questions 1

APPENDIX B – Sprint Inventory Management Plan 6

APPENDIX C – Resources GHG Emissions 20

APPENDIX D – Resources for Materiality assessment 21

Table of Contents

2

Ultimately, this booklet is about Corporate Responsibility (CR) and some of the basic components companies can consider as they establish a CR program. At its heart, CR (a concept that also referred to as Corporate Social Re-sponsibility, Sustainability, Triple Bottom Line, or Corporate Citizenship) is a form of corporate self-regulation integrated into the business. The goal of CR is to define responsibility for the company’s actions, improve the company’s social, environmental, and economic impact through its business activities, and obtain tangible business benefits as a result. In this chapter, we will review what Sprint is asking its sup-pliers to do and why, and share some of the benefits you could realize by embracing the potential that CR offers for you and your company.

1.1: Sprint’s commitment to Corporate ResponsibilitySprint began its CR journey in earnest in 2007. Building on its history of community engagement, strong ethics and governance practices, and commitment to diversity and inclusion, Sprint hired a nonprofit sustainability consultant (BSR) to work with its executive team on its first CR Mate-riality Assessment (see more on Materiality Assessments in Chapter 2). That served as the foundation for a set of CR Operating Priorities and the creation of ten long-term sustainability goals. Over the past six years, Sprint has strengthened its CR commitment to the point where it has become fully integrated into the business model. CR concepts are included in the strategic plan, and Sprint’s CEO Dan Hesse has become one of the most vocal CEOs in the U.S. regarding the elevated role CR should play in a leading organization and its importance to his role as Sprint’s top executive.

Sprint’s CR Program has three pillars: People, Product and Planet. The company’s commitment to people means fostering an innovative, rewarding, diverse, and ethical

workplace and supplier base. The commitment to product means we offer the highest quality products and services we can, make them accessible to as many people as we can, and honor ethical business practices in doing so. The commitment to the planet means we ensure responsible environmental stewardship in everything we do. Dan Hesse, Sprint’s CEO, strongly believes that in order to manage something you need to measure it, and that principle drove the creation of Sprint’s 10-year sustainability goals. By 2017, Sprint will:

1. Reduce its greenhouse gas emissions by 20%

2. Secure 10% of its energy from renewable sources

3. Reduce its electric energy consumption 20%

4. Reduce operational waste-to-landfill by 30%

5. Reduce its use of paper by 40%

6. Reduce its use of water by 30%

7. Send for reuse or recycle all of its Network and IT e-waste

8. Ensure that 90% of its suppliers, based on sourceable spend, meet its social and environmental criteria

9. Collect nine phones for reuse and recycling for every ten Sprint sells annually – a 90% collection rate

10. Ensure 70% of wireless devices launched annually meet Sprint environmental criteria

Sprint recognizes that it cannot achieve these goals without strong relationships with its suppliers. That is the reason there is a supply chain goal among these top ten. Sprint believes that by jointly pursuing CR, Sprint and its suppliers can improve our business performance and create value for both society and the environment. Although our criteria are specific to Sprint, they are based on generally accepted practices within the CR field. We have been impressed with the business results of several “early adopters” of these criteria and encourage you to prioritize the pursuit of similar benefits. We look forward to hearing about your progress.

1.2: What Sprint expects from your companyThis booklet addresses the eighth goal listed above – Sprint’s desire to have 90% of its suppliers, based on

Chapter 1:Corporate Responsibility and why it matters

ContEnts:

1.1: Sprint’s commitment to Corporate Responsibility (CR)

1.2: What Sprint expects from your company

1.3: What’s in it for your business?

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sourceable spend, meet its social and environmental criteria by 2017. All of our suppliers contributing to the 90% of sourceable spend are formally measured against our criteria, regardless of their industry. The criteria were introduced to suppliers in 2011 through Sprint’s first CR supplier assess-ment process. The first set of criteria is in effect from 2011 through 2013. With this booklet, we are introducing revi-sions to the criteria which will be effective for 2014. Some suppliers may receive additional Sprint criteria based on the

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a REviEw by DEutsCHE bank of over 150 research papers and other studies concluded that companies with high performance ratings for corporate responsibility have a lower cost of capital in terms of debt and equity, because the market recognizes that these companies have lower risk than other companies and rewards them accordingly.

Sustainable Investing - Establishing Long-Term Value and Performance

specific products or services Sprint purchases.

The social and environmental criteria for Sprint suppliers (the underlined text is NEW for 2014) are:

1. Conduct and publish the results of a basic or intermediate level CR materiality assessment by Dec. 31, 2014

2. Measure, publicly report and set a reduction target for greenhouse gas emissions by July 31, 2015

3. Develop and publish a human rights policy or statement

4. Develop and publish a safety policy or statement

5. Develop and publish an environmental policy or statement

In discussing the initial assessment with our suppliers, Sprint discovered that two particular criteria present the greatest difficulty: The materiality assessment and greenhouse gas measurement and reporting. Further, suppliers said they found existing public sources of information on these topics confusing and too complicated. Our goal with this booklet is to provide a less intimidating and more streamlined supplier resource that encourages rather than discourages you from doing work on these two important dimensions of CR. As for the remaining criteria, we expect to add chapters to address them over time.

We believe that corporate responsibility is a journey and not a destination. We hope you find the journey as beneficial as Sprint has and look forward to learning from your experiences.

1.3: What’s in it for your company?Many people initially underestimate the impact that CR can have on their business. Some think it’s a trend that will pass, and some see it as a type of “window dressing” – you just do a little bit here and there to look good and go on with business as usual. Since we are asking you to take this seri-ously and publicly share your progress, we want to explain how and why it may benefit your business.

Fortunately, there is an overwhelming amount of evidence that companies that improve their environmental, social and economic impact on society through CR also improve their business performance. In general, the benefits of CR come in several categories: reduced costs and risk; increased revenue and investment; improved employee morale and ability to recruit; and increased customer satisfaction. Here are examples of how Sprint has benefited from CR efforts:

Cost reduction: A big component of sustainability is

waste reduction. For Sprint, this means using less energy, paper and water, and fewer resources. In every case, it means we can take cost out of the business. Sprint’s annual electricity costs were nearly $400M in 2007. By reducing elec-tricity usage by 20% by 2017, we will save an expected $80M in electricity costs – and the potential for savings will increase as energy costs rise over time. We’ve cut our paper use by 60%, water use by nearly 30%, packaging materials by nearly 30% per box, reduced our fleet of vehicles, reduced employee business travel, etc. Using the same principles and general techniques we’re sharing with you in this booklet, our collective cost savings from our “green” efforts exceed $100 M.

Revenue creation: It has only been in the past couple of years that we began to understand the opportunity to incor-porate CR thinking into our strategic plans. In this materiality assessment chapter, we provide a chart showing how you can create value by addressing CR issues that are important for business success and also to stakeholders. Examples for Sprint include using mobile technology to remove barriers to communications for people with physical or cognitive disabili-ties (sprint.com/accessibility), enabling remote healthcare and education services through mobile devices, and offering solu-tions such as fleet management that enable our customers to reduce their fuel consumption and greenhouse gas (GHG) emissions. Sprint has booked several hundred million dollars of revenue through sales of communications technology solu-tions that enable social or environmental value.

additional benefits: Some other benefits Sprint has experienced are improved corporate reputation, increased employee pride, interest from top-level MBA talent to work at Sprint and cross-department cooperation.

At the very least, companies that develop a CR strategy can expect a better understanding of their business and its im-pacts on the environment, society, and the stakeholders who have an interest in the business. For some, CR strategy may lead to opportunities for innovation and/or revenue generation.

EvERy fiRM sHoulD look at decisions and opportuni-ties through the lens of shared value. This will lead to new approaches that generate greater innovation and growth for companies – and also greater benefits for society.

“Creating Shared Value” by Michael E. Porter and Mark R. Kramer

(HBR January - February 2011)

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Definition of a materiality assessment

In basic terms, a materiality assessment helps you identify what issues matter the most to your business.

Material topics are those that affect – or have the potential to affect – a company’s ability to create value over time. In a Corporate Responsibility (CR) context, material topics include current and potential environmental, social, and eco-nomic factors that could impact a company’s ability to create value now or in the future.

When you have completed a materiality assessment, you will

have a prioritized list of CR topics that should serve as the foundation for your CR activities. The process assesses top-ics based on the significance to both your business and its stakeholders. Stakeholders may include investors, employ-ees, customers, suppliers, governments, regulators, busi-ness partners, communities, media and non-governmental organizations (NGOs).

The greatest business opportunities come from focusing on topics that are most important to both the business and stakeholders (in Figure 1, these are seen in the upper right quadrant). Topics that are less important to both parties

Chapter 2:Materiality assessment

ContEnts:

2.1: Introduction

2.2: Get ready

2.3: Create a list of relevant topics

2.4: Score from both a business and stakeholder perspective

2.5: Review the results

2.6: Develop a plan and take action

2.7: Fulfilling Sprint’s materiality criteria

Highlights:• Definition of a materiality

assessment

• Benefits of completing a materialit assessment

• Steps to completing a materiality assessment

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“MANAGE RISK”Low business value, but

high social value – manage

for reputation

High

Low High

“INVEST FOR BUSINESS”Business value, but low

social value.

“HOLD OR DESELECT”Low business value, AND

low stakeholder value –

low opportunity

“SHARED VALUE”High business and social

value – greatest opportunity

Value to the business

Val

ue t

o e

xter

nal s

take

ho

lder

s

CREATING VALUEFigure 1: Creating Value through Corporate Responsibility

2.1: Introduction

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can be considered not relevant, or immaterial. Topics that are important to one party, but not the other, should be prioritized first based on business value, and second based on value to your stakeholders.

Completing a materiality assessment can be a significant undertaking, but the more time and effort you put into your materiality assessment, the more you will get out of it. We will discuss a basic approach to completing a materiality assessment. We will also include additional steps for an intermediate approach for a larger, more complex busi-ness as well as tips for an advanced approach that can be considered a best practice.

what are the benefits of completing a materiality assessment?

A materiality assessment is a great approach to help you step out of the day-to-day management of business issues and really evaluate what is important to you, which stake-holders you should care about, and what their big issues are. It requires time and resources to step back and take a broad view of the business, but there are significant benefits to doing so. You will gain a better understanding of your

business and its impacts on the environment, society, and the stakeholders who have an interest in your company. Materiality assessments also allow companies to:

• Better understand CR topics that can have a significant impact on your company

• Identify and manage emerging risks and opportunities

• Establish internal and external credibility for your CR strategy

• Align staff resources to topics with the greatest impact

• Increase executive and stakeholder engagement on CR topics

• Establish a foundation for a CR strategy for your company and a framework for a CR report

• Provide a foundation for CR reporting such as the Global Reporting Initiative (GRI) and Dow Jones Sustainability Index (DJSI)

what are the steps to completing a materiality assessment?

The actual process you follow will vary based on the re-sources you have available, the size and complexity of your business, the breadth and interest levels of your external stakeholders, and the amount of time you have to give it. As you would expect, the more time and resources you invest in your assessment, the greater the value for your business and your stakeholders.

If you are just getting started on your sustainability journey, or are a small to medium-sized business with less than

sPRint’s aPPRoaCHWater was a topic in the upper left quadrant for Sprint. Water is not a material issue for Sprint because our water usage is relatively low, but is very important to our stakeholders and is an increasingly important issue globally. Sprint developed a water reduction goal in 2012, four years after we developed our other 2017 sustainability goals. We also created a work-ing committee to identify our greatest opportunities to reduce our water use and find solutions that could potentially benefit other companies as well. We did not immediately address water, but after we had plans well underway in our priority “shared” value topics, we began addressing topics that were less material to us, but more important to our stakeholders.

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sPRint’s aPPRoaCHSprint completed its first materiality assessment in 2008 and used it to establish a set of CR Operating Priorities and long-term sustainability goals. We started with a list of CR topics for the global telecommunications sector. We fine-tuned the list to align with our business operations and stakeholder interests. Sprint executives rated the im-portance of the topics to the business. We had five large NGOs and socially responsible investment firms rate the importance of these topics from a stakeholder perspective. We supplemented this stakeholder perspective based on feedback we had received from other stakeholders, includ-ing regulators, supplier, customers, and employees.

Our materiality assessment formally launched our CR efforts within Sprint. We reviewed the assessment in our first CR Steering Committee meeting, developed CR Operating Priorities based on the final rankings, and then developed sustainability targets and scorecard. As a side benefit, the materiality assessment provided an introduc-tion to the World Wildlife Fund, World Resources Institute and Calvert Investments – stakeholders with whom we now have valued relationships.

We refresh our materiality assessment every two years to ensure we include emerging issues and changing priorities, and publish the revised version on our CR website.

tiP: There are many potential sources for proxy, or repre-sentative data, if interviews or surveys are not feasible: web-sites, publications, second-hand information from trusted advisors, public surveys, print or social media, internal resources with external contacts, conversations. Be creative with your sources.

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$1b in annual revenues, Sprint expects you to complete a basic materiality assessment. If you have already com-pleted a basic assessment, or are a larger company with thousands of employees and more than $1b in annual revenues, you should complete an intermediate material-ity assessment. large companies with complex issues and diverse stakeholders will get the greatest value from an advanced materiality assessment. We will focus on basic and intermediate approaches in this booklet, but will provide tips regarding advanced approaches for those companies planning ahead.

The phases for completing a materiality assessment at the basic, intermediate, and advanced levels are the same for each approach:

• Get ready

• Create a list of relevant topics

• Pare down your list of topics

• Score from both a business and stakeholder perspective

• Draw conclusions and take action

sPRint’s aPPRoaCHAs a multi-billion dollar company with thousands of employees, Sprint needed to go beyond the basic approach and conduct an intermediate materiality assessment. This allowed us to get a good understanding of the relevant CR issues we faced and we were able to use the materiality assessment results as the basis for our CR framework, goals, and objectives.

notE: The materiality assessment chapter of this booklet is designed as a stand-alone resource that allows you to meet Sprint’s materiality criteria. However, many supplementary publicly available resources are available to help you through-out the materiality assessment process. Key resources are listed in appendix b and are referenced throughout the materiality assessment chapter.

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Get executive buy-in

Identify the right executive sponsor for the materiality assess-ment. This will help ensure that resources are available and people are held accountable throughout the process. The sponsor should endorse actions coming out of the assess-ment. Ideally, the sponsor should be the CEO. If this is not possible, consider another senior executive with a broad view of the various parts of the business, such as the COO, Chief Audit Executive or Head of Strategy.

Pick a project leader

Assign a project leader to manage the end-to-end process. If you have sufficient resources available, create a core team led by the project leader. The core team could include 1-2 ad-ditional staff members who are able to help with each step of the assessment, including data collection, interviews, and rating topics. If you do not have resources to set up a core team, con-sider involving others from your organization along the way.

Establish your internal review committee (intermediate)

Establish an internal review committee with executives from across the board who understand how environmental, social, and economic topics affect – or potentially affect – different areas of the business. The composition of the internal review commit-tee will vary by company and may include representatives from key business lines, finance, marketing, public relations, products and solutions, human resources, legal, supply chain and opera-tions, and any other functions, regions, or businesses important to your enterprise. The internal review committee will oversee the process and approve the outputs.

identify internal experts

Identify relevant internal subject matter experts to assist in the materiality assessment. Subject matter experts should include employees who have a deep understanding of how environ-mental, social, and economic topics affect – or could affect – different areas of the business. Subject matter experts may include individuals from product development; environment, health, and safety (EHS); or community affairs. The subject matter experts will be called upon during the assessment, when needed, to provide input and feedback.

Determine who your stakeholders are and how to represent their interests

It is important to represent the viewpoints of external stake-holders in a materiality assessment. This can be achieved either by directly involving stakeholders (e.g., through interviews or surveys) or indirectly through proxies – informa-tion from sources that is representative of their perspective. Table 4 in section 2.4 lists potential external stakeholders to consider involving. Many companies use proxies in their first materiality assessment and involve external stakeholders directly in future iterations of the assessment.

sPRint’s aPPRoaCH

Get executive buy-in: With support from the CEO, Sprint established a CR Steering Committee that included twelve executives from the various operational units within Sprint. Two years later, Sprint later turned this committee into the CR Leadership Committee, and added a higher level Steering Committee that meets quarterly, led by the CEO, and con-sisting of nearly the entire C-Suite.

Pick a project manager: Sprint did not yet have a dedi-cated Corporate Responsibility Manager, so we selected an individual with a passion for sustainability and strong operational knowledge to lead the project internally. The proj-ect was expected to take 30 to 45 days for completion, and required 25% of this person’s time during the project.

identify internal experts: Most of the Steering Committee members selected a person from their team to serve as their sustainability subject matter expert.

Determine who your stakeholders are and how to represent their interests: Sprint directly engaged some stakeholders for feedback. Sprint also leveraged our sustain-ability consultant’s recently completed a materiality assessment for the global wireless industry. So, we used a combination of direct feedback and secondary feedback to represent stake-holder interests.

Highlights:• Get executive buy-in

• Pick a project leader

• Establish your internal review committee (intermediate)

• Identify internal experts

• Determine who your stakeholders are and how to represent their interests

2.2: Get ready

tiP: Try to identify potential corporate responsibility cham-pions within your company and recruit them to help you. It is nearly impossible to succeed in CR if you do not have people with passion leading and participating in your efforts.

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introduction

A materiality assessment is based on a list of environmental, social and economic topics that (1) are of greatest concern to your stakeholders and (2) could significantly affect your business performance, now or in the near future:

topics of concern to your stakeholders: Topics that are important to, or have an impact on, the company’s stakeholders (investors, employees, customers, suppliers, governments, regulators, business partners, communities, media and NGOs).

topics of concern to the company: Topics that have the most significant impact on the company’s performance in terms of risk, cost, growth and financial performance.

The number of topics to consider can be large, but the top-ics should be those that are most relevant to your company. We provide an initial list below, and a suggested process to add additional topics and remove less relevant topics, with an aim to create a final list of 20 to 30 topics.

The topics can be current or potential - that is, topics you think may become relevant in the near future. For example, water scarcity may not be on your radar if you are not a manufacturing company. However, if you have offices in an area that experiences droughts, water could affect employ-ees’ cost of living, health, and safety, as well as your ability to attract talent in the area in the long-term. It is important to think through each topic with a long-term view of how it could affect your company.

Prepare your initial list of environment, social and economic topics

Start with a generic list of CR topics, such as the one in Table 1. appendix a has definitions of these topics, and questions to ask to decide whether to include the topics in your initial list.

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tiP: For a basic assessment, this step may be completed quickly. Have several people review the list and challenge your assump-tions. If you plan to review the list with your executives, plan in advance to allow plenty of time for exectutive interviews.

CatEGoRy toPiC

Environmental – Energy and greenhouse gas (GHG) emissions management – Water use and management – Materials use – Waste management – Impacts on biodiversity – Product and service impacts

Social – – Employee engagement labor practices – Inclusion and diversity – Occupational health and safety – Human resource management – Employee rights

Social – – Respect for indigenous rights human rights – Nondiscrimination – Child, forced, and compulsory labor

Social – – Philanthropy society – Community engagement – Ethical business practices – Customer satisfaction

Social – – Customer health and safety product – Protection of privacy responsibility – Marketing practices

Economic – Corporate governance – Stakeholder engagement – Regulatory compliance – Research, development and innovation – Executive compensation – Business continuity – Political contributions/lobbying – Supply chain management (including supplier diversity)

Table 1: Sample initial topics list

2.3: Create a list of relevant topics

Highlights:• Introduction

• Prepare an initial list of environmental, social, and economic topics

• Research additional industry-specific topics for your list (intermediate)

• Group topics into categories that are meaningful to your business

• Clearly define topics to create a common understanding

• Seek internal approval of the topics list (intermediate/advanced)

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sPRint’s aPPRoaCH

We found that the list of topics we started with was a bit European-centric. We identified several topics that are more pertinent in the U.S. than in Europe, including distracted driving and cell phone e-waste management. These issues are also on the radar for regulatory action, and we felt it was important for them to be included in our assessment.

Table 2: Resources: Sector-specific topics

Research additional industry-specific topics (intermediate)

Add other topics that are relevant to your company. The fol-lowing questions may help you determine additional topics:

1. Is there a list of sector-specific topics available for your industry? (See Table 2.) At a minimum, we recommend evaluating GRI sector guidance appli-cable to your industry.

2. What social, environmental and economic topics are your competitors reporting? Review your competitors’ web sites to see if they have completed a materiality assessment and listed their material topics. Large companies in your sector might be a good source for this information

3. Are there any known social, environmental and economic topics for your industry that have caught the attention of regulators or NGOs? Are there any issue-specific reports where the conclusions can be used as representative of specific stakeholder groups? Your Legal, Environmental, Health & Safety (EHS), Investor Relations, or Government Affairs departments may have this information. Or, use industry intelligence services such as Bloomberg or Forrester to identify key stakeholder issues.

4. Do you have business continuity or risk management plans that identify social, environmental or economic risks?

5. Are there relevant topics the media has been covering?

Group topics into categories that are meaningful to your business

It is helpful to group the topics into similar categories, as done in Table 1. The categories will vary depending on your business and industry. For example, a software company might use the category “privacy and security,” which would include “customer privacy,” “secure computing,” and “employee privacy.”

• Combine similar topics and remove less relevant topics – Combine topics that are similar for your company. For example, some companies may combine “philanthropy” and “community service” into one topic.

– Remove irrelevant topics. For example, “impacts on biodiversity” may not be a relevant topic for accountants, attorneys, or consultants.

• Keep the topics list to 20-30 topics

– Aim for no more than 20-30 topics, and focus on those most relevant. If you are struggling to reduce the number of topics, speak to a few important stakeholders (such as your internal subject matter experts or internal review committee) to help you arrive at the topics that are most relevant to the company and its stakeholders.

Clearly define topics to create a common understanding

When you have your list of 20-30 topics, write a definition of each that makes sense for your company. This will ensure a common understanding of each topic as you conduct the materiality assessment. This is important because people may otherwise interpret topics differently, or not understand how the topic relates to the company. For example, the topic “water” might seem straightforward, but it could mean water use, water discharge, or water quality, depending on what is most important to a company. Writing a definition will ensure everyone interprets the topic in the same way. see appendix a – Materiality topic definitions and ques-tions, for sample definitions.

REsouRCEs: sECtoR-sPECifiC toPiCs

Global Reporting initiative (GRi) provides guidance for re-porting a company’s performance on economic, environmental, and social topics. GRI documentation includes both generic and industry-specific topics. Reviewing the GRI’s sector-spe-cific guidance may provide additional relevant topics. • Link to GRI• Link to GRI sector guidance

sustainability accounting standards board (sasb) is developing industry-specific sustainability accounting standards. The SASB Environmental, Social, and Governance (ESG) topics and SASB issue briefs may provide additional relevant topics.• Link to SASB• Link to SASB’s list of issues by industry

Dow Jones sustainability index (DJsi). The RobecoSAM Corporate Sustainability Assessment provides the input for the DJSI annual questionnaire, which is sent to the largest listed companies in the world by market capitalization (in 2013, the questionnaire was sent to the largest 2,500 companies). RobecoSAM’s industry-specific questionnaires are not publicly available – check with your Investors Relations team to see if they receive a questionnaire from RobecoSAM around March/April of each year. If not, the list of topics per industry may still provide additional relevant topics. • Link to RobecoSAM • Link to RobecoSAM topics per industry

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seek internal approval on proposed topics (intermediate/advanced)

• intermediate: Get approval from the internal review committee.

• advanced: Get input from representatives of external stakeholders.

Table 3 is a sample output from this step.

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sPRint’s aPPRoaCH

Group topics into categories that are meaningful to your business: We grouped topics into 25 buckets, and mapped them into 5 main categories – operations, products, employees, customers and community. These categories mapped to our CR operational priority statements. As our busi-ness and industry has changed, we modified the topics and categories to better map to where we need to put our focus.

Combine similar topics and remove less relevant topics: For Sprint, some of the topics that are less relevant include local hiring and forced labor, which are issues more common for companies operating in developing countries. Since Sprint has more than 99.5 percent of its workforce in the U.S. and must meet U.S labor laws, labor practices that are at odds with U.S. law are not relevant – these issues are unlikely, given our compliance with U.S. legislation in this area.

Define each topic: We completed a definition document to accompany the draft materiality assessment as it made its rounds at Sprint and as we secured executive engagement. Each person had a slightly different interpretation of each topic, so this step was essential to ensure we were working from a common understanding of each topic.

Changing the topic list over time: For subsequent assessments, usually completed every 2 years, we modified the list to better map to specific topics that we heard about directly from our stakeholders. We also modified the topic language and categories to better match our CR priority structure.

CatEGoRy toPiC

Eonomic – Economic performance – Innovation – Indirect economic impacts

Environment – Renewable energy – Energy efficiency – Water – Biodiversity – GHG emissions – Hazardous waste disposal – Compliance (environmental)

Labor – Employment practices – Occupational helath and safety – Diversity and equal opportunity – Supplier diversity

Human rights – Indigenous rights

Society – Community – Public policy

Product – Customer engagement responsibility – Customer health and safety – Energy delivery reliability

Table 3: Example initial list of topics

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Determine criteria and rating scales

You now need to determine how to prioritize your topic list. This is typically done by scoring each topic from two perspectives – that of the business and that of the stakeholders. Plot each topic on a chart based on the scores – the X-axis is the business perspec-tive and the Y- axis is for the stakeholder perspective. The scale

for each axis depends on your scoring range. In Figure 2, the range for each axis is 100, with a starting point of 0. The X-axis value is the first one; the Y-axis value is second.

The score for each topic must be a composite view that represents many perspectives. Table 4 provides sample perspectives you may want to consider.

Topic A, 20, 60

High

Low High

Topic B, 60, 20Topic D, 20, 40

Topic C, 70, 80

Impact on the business

Impa

ct t

o e

xter

nal s

take

hold

ers

MATERIALITY CHARTFigure 2: Example of a materiality chart

2.4: Score from both a business and stakeholder perspective

Highlights:• Determine criteria and rating scales to evaluate the business perspective and then the stakeholder perspective.

What factors determine impact on business success? Stakeholder impact?

• Collect input data

• Conduct the materiality assessment

• Rate each topic for both business and stakeholder impact, and plot the results on a 2 × 2 chart

Table 4: Examples of business and stakeholder perspectives

businEss PERsPECtivEs stakEHolDER PERsPECtivEs

Views of the core team and internal review committee on business priorities NGO priorities

Company commitments and goals Investor priorities

Company strategic priorities Customer priorities

Compliance requirements Government priorities

Employee priorities Peer priorities

Corporate responsibility priorities Corporate responsibility ratings agencies

Company risks Corporate responsibility trends Industry trends

12 CHaPtER 2

Once you have identified the perspectives you plan to use for business and stakeholder impact, you need to determine what rating scale you will use. There are several different approaches to choose from. We recommend a three point rating scale for the basic approach, and a five point rating scale for the intermediate approach. See Tables 5 and 6 for sample rating scales. You will rate each topic from each of the perspectives within impact to the business and impact to stakeholders. So, if you have 20 topics, and 5 perspectives to consider for business impact, you will be creating 100 scores – one for each topic, from each perspective.

Collect input data

Once you have your topic list and rating scales, it will be

time to collect the data to rate the topics against each perspective. The data you collect will depend on what level of materiality assessment you are doing. For the basic ap-proach, you will want to take advantage of existing data that you have, and figure out how it can be used to represent each perspective. For example, you may have an employee survey you can use to represent the views of employees. For an intermediate approach, you may choose key stakeholders to interview to represent their perspectives. For an advanced approach, you may create surveys and conduct interviews of all stakeholder groups.

Tables 7 and 8, represent possible data sources for a sample of internal and external perspectives.

Rating business Perspective: Company commitments and goals

0 No data or insufficient data to rate

1 No internal or external commitments about the topic

2 Internal commitment and/or goal about the topic

3 External commitment and/or goal about the topic

Table 5: Sample rating scale – basic approach

Rating business Perspective: Company commitments and goals

0 No data or insufficient data to rate

1 No internal or external commitments about the topic

2 Internal commitment about the topic

3 Internal commitment and policy about the topic

4 External commitment about the topic

5 External commitment and goal about the topic

Table 6: Sample rating scale – intermediate approach

Table 7: Examples of data sources for specific internal perspectives

businEss iMPaCt PossiblE Data souRCEs

Views of the core team and internal Surveys review committee on business priorities

Company commitments and goals Existing commitments, policies, or goals (e.g., documents of governance, public goals)

Company strategic priorities Standing agendas of leadership meetings

External communications (e.g. 10-K, CEO statements)

Components of executive remuneration

Compliance requirements Applicable laws, regulations and standards

Employee priorities Internal surveys (e.g., employee engagement); employee complaint reports

Corporate responsibility priorities Existing corporate responsibility documentation including LCA studies, external reports, etc.

Company risks Risk registers currently compiled through other internal departments or initiatives such as internal audit, enterprise risk management, etc.

13CHaPtER 2

Output from this step: Data available to represent each perspective

At the end of this section, you should have identified what data you will use to represent each perspective. Keep in mind that the data may not cover all the topics in the materi-

ality assessment. For example, an employee survey may only reference a few of the topics on your list. That is still helpful, because then you would understand which topics are cur-rently most important to employees.

Table 8: Examples of data sources for specific external perspectives

stakEHolDER iMPaCt PERsPECtivEs PossiblE Data souRCEs

NGO priorities Research on issues of importance to NGOs relevant to your sector and to sustainability

Investor priorities Investor feedback; shareholder resolutions; sustainability index questionnaires (e.g., Dow Jones Sustainability Index)

Customer priorities Analysis of RFPs and customer requirements; customer surveys; customer insight analysis; customer complaints

Government priorities Government policies, which should be monitored by the appropriate executive or function within your company, depending on the topic area (e.g., HR, EHS, or Sustainability)

Peer priorities Benchmarking material issues reported by competitors and other peers

Corporate responsibility ratings agencies Questions asked in corporate responsibility questionnaires (e.g., Carbon Disclosure Project (CDP), Dow Jones Sustainability Index (DJSI), Newsweek Green Ranking)

Corporate responsibility trends Research on corporate responsibility trends within the sector (e.g., from sources such as GreenBiz or Environmental Leader)

Industry trends Media/Internet searches of trends and articles relevant to the company and/or the industry

14 CHaPtER 2

Conduct the materiality assessment

After establishing rating scales for each perspective, rate each topic. Table 9 shows an example of Stakeholder impact perspectives – in this case, for customer priorities– rated on a scale of 1 – 5 for each topic.

With a basic approach, customer priority ratings can be de-termined by the company based on its knowledge of what’s important to its customers.

With an intermediate approach, the rating can be based on average levels of importance for each topic, provided by customers through a survey. That is to say, if customer A states that they see the importance of supplier diversity

programs put in place by the company as a 1, customer B states it’s a 2, and customer C states it’s a 3, the customer priority rating for supplier diversity will be the average, 2.0 (i.e., (1+2+3)/3).

After rating topics for both business impact and stakeholder impact, average the business impact and stakeholder impact ratings for each topic. Table 10 shows an example of aver-age ratings of internal and external topics.

With an intermediate approach, you could combine the data from both perspectives to get an aggregated or total rating. This would allow you to stack rank the topics based on their total, combined score.

Table 10: Example materiality ratings

Category topic internal External perspectives perspectives average rating average rating

Economic Economic performance 3.4 4.0

Innovation 3.2 4.0

Indirect economic impacts 2.8 3.3

Environment Renewable energy 3.3 4.5

Energy efficiency 3.2 4.8

Water 2.9 4.2

Bodiversity 2.3 3.8

GHG emissions 3.5 4.7

Hazardouse waste 2.8 4.0 disposal

Compliance (Environmental) 2.9 4.4

Labor practices Employment 2.5 4.0

Occupational health/safety 3.4 4.3

Diversity and 3.0 3.6 equal opportunity

Supplier diversity 3.0 3.2

Human rights Indigenous rights 2.2 3.6

Society Community 2.4 3.1

Public policy 2.5 4.2

Product Customer engagement 3.6 3.1 responsibility programs

Customer health/safety 2.4 3.3

Energy delivery reliability 2.7 3.7

Table 9: Sample rating for customer priorities using a 5 point scale

topic Customer priority rating

Economic performance 5.0

Innovation 5.0

Indirect economic impacts 4.0

Renewable energy 4.0

Energy efficiency 3.5

Water 4.0

Bodiversity 3.0

GHG emissions 4.0

Hazardouse waste 5.0 disposal

Compliance (Environmental) 3.5

Employment 4.0

Occupational health/safety 4.0

Diversity and 3.0 equal opportunity

Supplier diversity 2.0

Indigenous rights 2.0

Community 1.0

Public policy 3.0

Customer engagement 3.0 programs

Customer health/safety 5.0

Energy delivery reliability 4.0

Low priority Relevant but may Potentially material (1 - 2.5) not be material (3.5 - 5) (2.5 - 3.5

Key for Tables 9 and 10:

15CHaPtER 2

Rate each topic for both business and stakeholder impact, and plot the results on a 2×2 chart

Next, plot the results on a 2 x 2 chart, such as the one in Figure 5. This can be done with a simple Excel spread sheet, or manually.

Sample output from this step: Prioritized topics represented in a 2 x 2 matrix

Business impact

Sta

keho

lder

impa

ct

Economic performance

5.0

Innovation

Indirect economic impacts

Renewable energy

4.0

Energy efficiency

3.5

Water

4.5

3.0

GHG emissions

Hazardouse waste disposal

2.5

Compliance (Environmental)

3.6

Employment

3.8

Occupational health/safety

2.0

Diversity and equal opportunity

3.4

Supplier diversity

2.0

Indigenous rights

2.2

Community

2.4

Public policy

2.6

Customer engagement programs

2.8

Customer health/safety

3.0

Biodiversity

3.2

Energy delivery reliability

Figure 5: Sample materiality assessment 2 x 2 chart

16 CHaPtER 2

sPRint’s aPPRoaCH

Sprint’s materiality consultant provided a slightly different ap-proach for rating the perspectives of business and external stakeholders. The approach is slightly less granular and may be an acceptable approach if you find it better suits your needs and resources. The approach you select is not as important so long as your methodology provides an accurate representation of the business and stakeholder perspectives and allows you to prioritize issues.

In our materiality assessment, we first identified a list of busi-ness success elements – product/service differentiation, employee satisfaction, etc. Each element received a weighting such that the total weighting for all elements totaled 100. We then scored each topic in terms of its influence on these ele-ments (drivers of business success). The weighting represented how important that aspect was in driving business success for that topic.

We then rated each aspect for each topic as either a high prior-ity for business success or a low priority for business success. To force a spread in the results, if an aspect was rated as high priority, it received maximum points (weight × 100) and if it was rated as low priority, it received no points.

The example the below (Influence on Business Success) is for green design for a cell phone. The ratings represent our per-spective on how this topic could impact business success. We rated product/service differentiation as high since no one had

launched a “green” phone yet. We felt it would positively impact our brand reputation. Although customer satisfaction was im-portant, we didn’t expect that a green design would significantly impact customer satisfaction. We did think it would impact em-ployee satisfaction, but this had a lower weighting compared to customer satisfaction. Although cost has a significant impact on business success, we did not think there would be significant incremental cost associated with our devices, so it would have a low impact to our customers. Initial expectations for generat-ing incremental revenue from this new product were low.

note: Points are scored by multiplying the weight times 100 times a multiplier for priority. To force a scoring spread, if a priority is listed as High, the value of the multiplier is 1, if it’s Low, the multiplier is 0. For example, if a source is weighted at 20% and listed as a high priority, the point score is .2 × 100 × 1 = 20.

To provide the stakeholder perspective, we used several sourc-es including our sustainability consultant (from an industry-wide assessment they completed), direct stakeholder input (from 5 non-governmental organizations and CR analyst firms), a review of web content/social media/research on some of these issues, and internal feedback. For example, our Investor Relations, Cus-tomer Care, Supply Chain Management, and Human Resource teams interact with stakeholder groups. These teams provided insight into issues stakeholders cared about. Note: The same scoring approach was used – weight x 100 priority multiplier of 1 or 0 = points.

influEnCE on businEss suCCEss:

Information source weight Priority Points

total

Product / Service 20% High 20 Differentiation

Brand / Reputation 20% High 20

Customer Satisfaction 20% Low 0

Employee Satisfaction 10% High 10

Cost 20% Low 0

Revenue 10% Low 0

total 50

iMPoRtanCE to stakEHolDERs:

Information source weight Priority Points

total

Environmental Impact 12% High 12 Standards

Universal Declaration 10% Low 0 of Human Rights

GRI Guidelines 12% High 12

Issue-specific NGOs 10% High 10

SRI Investor Surveys 14% Low 0

Media Tracking 14% High 14

ICT Sustainability 12% High 12 Reports

Public Policy 12% Low 0

total 60

17CHaPtER 2

The materiality assessment process has some rigor, but it is not an exact science. The data may be approximate and not exact, or the rating scales may not capture all possibilities. Therefore, topics may appear more or less significant than what feels right. It is important to reality-check the outcome of the materiality assessment with leadership and key external stakeholders, to catch anything may have scored too high or too low.

It is ultimately up to the company – not its stakeholders – to determine what topics are material. For example, with an inter-mediate approach, the internal review committee may choose to increase the rating of a new issue that only one stakeholder has identified as material, but that has strategic business implications.

Review material topics with internal stakeholders

Hold a meeting or a series of meetings with key internal stakeholders to review results. This may include executives from across the board, and any relevant internal subject matter experts. Review the rating scale and results, and document any changes made during the meeting(s).

Review the results with the internal review committee (intermediate)

Hold a meeting or a series of meetings with the internal review committee, after any other meetings with internal stakeholders. Review the rating scale and results, and docu-ment any changes made during this(ese) meeting(s).

Review results with external stakeholders (advanced)

If you received external stakeholder input on the materiality as-sessment, you may want to review the materiality assessment process and outcome with the same set of stakeholders. This can provide valuable input into the process and help build rela-tionships with stakeholders. It may also raise expectations that the company will take action on some of the topics identified.

If you do seek external stakeholder validation, keep the conver-sations as fact-based and transparent as possible. You might consider using existing forums to hold these conversations (e.g., customer or investor road shows, employee all-hands meetings or surveys), whenever possible. This will help minimize the time requirements for all involved. Document any changes made as a result of these conversations.

Get leadership sign-off on the materiality assessment results

It is critical for leadership to review, understand, and approve the materiality assessment results. Hold a meeting or a series of meetings with leadership to review the process and results. If needed, consider following your company’s typical voting system to help reach consensus. Document any changes made as a result of these conversations.

keep documentation available for future reference

Ensure that the methodology, tools and data used for the materiality assessment are kept on file in accordance with your company’s record retention policy. Sprint has a records reten-tion policy of 10 years as part of our Sarbanes Oxley compli-ance program. This includes the initial topics list, the refined topics list (and reasons for changes), prioritization methodology, and all data sources. Keeping this information may be useful if you need to explain to management or external stakeholders (e.g., media, NGOs, customers, auditors) why certain topics were kept in or left out of the materiality assessment.

output from this step: Refined assessment

You should now have a refined materiality assessment, re-viewed and agreed to by internal stakeholders and signed off by leadership. You should also now have many documents on the process on file!

2.5: Review results

Highlights:• Review material topics with internal stakeholders to reality-check the results

• Review the results with the internal review committee (intermediate)

• Review the results with external stakeholders (advanced)

• Get leadership sign-off on materiality assessment outputs to obtain endorsement and resources to act on results

• Keep documentation available for future reference

sPRint’s aPPRoaCHOnce we plotted all of the issues on a chart similar to Figure 5, we did a gut check. Did things fall where we expected? If not, we went back and reviewed the ratings to determine if we needed to make adjustments. We also reviewed the re-sults with a few internal executives and our consultant to get their take on the results. Once this was complete, we had our final chart and it was time to decide what to do with it.

sPRint’s aPPRoaCHSprint reviewed its initial materiality results with several im-portant stakeholders including World Wildlife Fund, Calvert Investments, Carbon Disclosure Project, The Conference Board and Investor Environmental Health Network. This was done through separate calls for each stakeholder, facilitated by an outside party.

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sPRint’s aPPRoaCH

Summarizing the results and then determining what actions to take was the hardest step in our materiality assessment process. Many issues were in the “shared value quadrant (top right), and several were in the “manage for risk reduction” (top left) quadrant. Sprint took six months to create a formal set of CR operating priorities and long-term sustainability goals based on this materiality assessment, which we made public in October 2008.

The time-consuming part of the effort was taking manage-ment through the conclusions of the materiality assessment and gaining consensus on what our resulting actions and goals should be. We had several meetings with the executive team, and ultimately review and approval from our CEO. The bulk of the work was completed by the Project Manager, who drafted priorities and goals and then reviewed them with the functional executives that had direct responsibility in that area. We have since fine-tuned several of these goals and updated our materiality assessment, but the materiality assessment we completed in early 2008 served its purpose well – laying the foundation for our CR efforts for the next decade.

CHaPtER 2

Develop a plan for the most material topics

Create a plan to address the most material topics identified through the materiality assessment process, starting with the topics in the top right quadrant (see Figure 5). Review and refine the plan with leadership and key internal stake-holders. Components of plans may include:

• Develop a CR strategy, or include the material topics in the company’s overall or business unit strategies (a CR strategy is easier to develop, but less likely to receive the right level of attention from the business)

• Make sure key risks are managed through the com-pany’s standard risk management process

• Include key opportunities in the agenda of future busi-ness planning sessions – it is important to emphasize opportunities, not just the risks of CR topics, to help you get leadership support

• Decide on how to communicate internally and externally about the topics, e.g., dedicated CR report, inclusion in other company disclosures

improve the materiality assessment process over time

By improving the quality of data input into your materiality assessment in future iterations you will improve the useful-ness of your results. Improving the quality may include, for example, conducting interviews with more internal and external stakeholders, or using more quantitative data (e.g., product lifecycle analyses to identify the environmental impacts of a product from the extraction of raw materials to its end of life, or metrics measuring employee absenteeism due to health issues).

Consider how to embed the data collection into day-to-day processes so that more data is readily available for the next assessment. This may include, for example, embed-ding materiality assessment questions into employee and customer surveys.

Monitor market changes on materiality

Keep up to date on new information that may affect your materiality assessment results or how you manage a specific topic. For example, keep an eye on SASB (see Table 2), and their sector-specific issue briefs for your industry. These issue briefs may affect which topics you consider for the materiality assessment and how you prioritize the topics.

2.6: Develop a plan and take action

Highlights:• Develop a plan for the most material topics

• Improve the materiality assessment process over time, e.g., improve the data quality and data collection process

• Monitor market changes on materiality

One of the new trends in materiality assessment is factor-ing in an estimated financial impact of these issues. For example, there are firms developing approaches to measure the potential cost (or risk) of human rights issues, or of toxic waste mismanagement, or poor forestry practices. The practice has been called valuing natural capital or social capital. This new trend may be driven by growing interest in having companies understand and report quantitatively on their social and environmental impacts.

In addition, many governments and stock exchanges around the world are now requiring companies to report social and environmental performance, either in separate reports, such as Corporate Responsibility or Sustainability reports or by including relevant and material non-financial information in annual reports or 10-Ks. Investors are also pressuring companies to disclose their GHG emissions through the annual Carbon Disclosure Project (CDP) and to have their CR reporting externally audited. While the assessments you complete to meet Sprint’s supplier criteria may help or relate to some of these reporting needs, please remember that the information provided in this booklet is designed to meet Sprint’s supplier criteria. You will need to decide what additional assessment and reporting may be required.

19CHaPtER 2

Establish a timeline and action plan that allows you to finish and publish your materiality assessment by December 31, 2014

Sprint’s supplier assessment goal is to have 90% of its suppliers, based on sourceable spend, meet its social and environmental criteria by 2017. Completing your material-ity assessment will likely take three to six months, so Sprint encourages you to establish an action plan and timeline that allows you to complete the assessment and make it public by the end of the year 2014. This gives you time to identify and assemble your project lead, the assisting subject mat-ter experts, and appropriate stakeholders for a meaningful materiality assessment. It may be helpful to have your results ready in time for your next strategic planning process.

Publish your process, materiality matrix and your resulting action plan

There are many approaches to completing a materiality assessment, including those provided in this booklet. Your approach to materiality may vary from those shared here, however, in order to meet Sprint’s supplier criteria, there are specific aspects of your materiality assessment process and results that you need to share publicly on an open and easy-to-access location, such as your website. Sprint’s materiality disclosure criteria are:

1. Explain your materiality assessment approach and why you took this approach.

2. Include an overview of the materiality assessment pro-cess you followed, including:

– How stakeholder and internal input was obtained

– How the topic list was compiled

3. Summary of the outcome of your materiality assessment and what actions you are taking as a result.

– A list of topics defined as material

– Your plan for managing each material topic, which could be:

• A numeric goal such as “reduce GHG emissions by 30% by 2017”

• An action goal such as “implement a system to cap-ture all energy activity data by the end of the year”

• A statement that you plan to address the topics in the future (with an estimated timeline) such as “Company X plans to meet with external stake-holders to further understand their concerns regarding X and work with them to develop a po-tential action plan. Company X will not be able to identify and meet with these stakeholders until first quarter of 2014 due to resource constraints.”

• A statement that you do not intend to address a topic and why such as “Company X understands that potential pay disparity between its CEO and average employee could be a concern for stake-holders, however, Company X does not expect to publish this information until the SEC provides clear guidance under the Dodd-Frank Act.”

4. Disclose the title of the most senior person in your company who approved the materiality assessment process outcome.

notE: Sprint’s materiality disclosure criteria are based on the GRI G4 requirements on materiality reporting, but are specific to Sprint. If you choose to complete a GRI-based CR report, you should refer to the GRI guidance document rather than Sprint’s booklet to ensure you fully meet the GRI criteria for materiality assessment.

2.7 Fulfilling Sprint’s criteria

Highlight:• Establish a timeline and action plan

• Publish your process, materiality matrix and your resulting action plan

20 CHaPtER 3

Chapter 3:Measuring, reporting and reducing Greenhouse Gas (GHG) Emissions

ContEnts:

3.1: Understanding the basics of climate change

3.2: Fundamentals of GHG measurement

3.3: Get ready

3.4: Collect the data

3.5: Turn your activity data into GHG emissions

3.6: Documenting and report your results

3.7: Develop a plan to reduce GHG emissions

3.8: Where to go from here

3.9: Fulfill Sprint’s criteria

Figure 6: The Greenhouse Effect

This section of the booklet tackles another of the most chal-lenging areas of Corporate Responsibility (CR) – greenhouse gas emissions measurement, reporting, and reduction goal setting. Many people refer to this responsibility as reducing their carbon footprint. The basic idea is that companies need to measure, report, and reduce the greenhouse gas (GHG) emissions they are responsible for so that collectively, we can limit the impact of GHG emissions caused by human activ-ity. The upside to business is the cost savings that can be realized when you work to reduce your GHG emissions. It is

no longer enough that companies measure and reduce their emissions; they also need to publicly share their process and results so that CR analysts can determine if they are following GHG reporting standards.

Our objective in this section of the booklet is to provide the basics of GHG measurement and reporting so you are able to meet Sprint’s GHG criteria. Our hope is that you can use this process to help identify and tackle your opportunities to reduce your GHG emissions and strengthen your business performance.

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3.1 Understanding the basics of climate changeGHGs are gases in the upper atmosphere that form a heat-trapping blanket that warms the Earth’s atmosphere. At the same time, they prevent some sunlight from being reflected back into space. This traps solar radiation and heat in the Earth’s atmosphere.

In order for Earth to maintain a consistent average tempera-ture, the amount of heat entering the atmosphere should be about the same amount as the heat that leaves the atmo-sphere. A rise in GHG concentrations in the atmosphere traps heat and contributes to an increase in the average tempera-ture, or “global warming.” Global warming causes changes in weather, sea level, and land use patterns (“climate change”). While the majority of GHG emissions come from natural sources, there is overwhelming scientific evidence indicating that human activity (mainly the production and use of carbon-based energy) is causing a steep and rapid rise in concentra-tions of GHGs in the atmosphere.

All of us are learning to expect and adapt to increasingly erratic weather with stronger and more frequent severe weather events. Sprint is also working to reduce our carbon footprints and to facilitate new solutions that might slow down or even reverse global warming.

In 1997, organizations and governments from across the world collaborated to develop an agreement under the Kyoto Proto-col1 to curb GHG emissions. The protocol went into effect in 2005. The protocol identified six priority gases that makeup a high contribution to global warming. Table 9 lists the six priority greenhouse gases and the activities that typically produce them.

Each gas has a different impact on Earth’s atmosphere. The impact varies depending on three variables:

• The amount and concentration of the gas is in the atmosphere

• The length of time the gas stays in the atmosphere – this ranges from a few years to thousands of years

• The ability of the gas to retain heat in the atmosphere and consequently affect global temperature

Based on these factors, a Global Warming Potential (GWP) is calculated for each gas. The GWP plays an important role in a company’s measurement of its GHG emissions be-cause it allows all types GHG emissions to be reported on a consistent basis – similar to converting Euros (€) to U.S. dollars ($) for a financial report. The common currency used in GHG measurement is MT CO2e, or metric tons of carbon dioxide equivalents.

Think of GWP as a conversion factor that enables different gases to be expressed in MT CO2e. Carbon dioxide itself has an assigned GWP of 1, but other greenhouse gases with higher warming potential have higher GWPs. The table below provides an example.

You can see that multiplying the number of metric tons of each gas by their respective GWP produces the equivalent in MT CO2e. Now that the amount of both gases is expressed in a common currency, they can be added together for a total MT CO2e of 77.

CHaPtER 3

Gas Mt GwP Mt Co2e

Carbon Dioxide 2 1 2

Methane 3 25 75

TOTAL 77

Question: How many Mt Co2e would result from combining 2 Mts of carbon dioxide and 3 Mts of methane?

sPRint CliMatE CHanGE iMPaCts: At Sprint, our back-up power genera-tors are used more frequently due to the increase in number and severity of hurricanes and winter snowstorms. This increases our scope 1 emissions. We’ve also had to draw water from municipal sources more often at our headquarters in Overland Park, Kansas, as droughts have reduced the volume of water available in our water recapture ponds, which we typically use to irrigate our landscaping.

1The Kyoto Protocol is an international treaty of the United Nations Framework Conven-tion on Climate Change, which set internationally binding emission reduction targets. The Kyoto Protocol was adopted in Kyoto, Japan, in 1997 and entered into force in 2005. The first commitment period ended in 2012. The protocol was amended in 2012 to extend through 2020, but not entered into force.

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Carbon dioxide emissions are the most prevalent GHG emission, representing an estimated 57% of global emis-sions and 84% of U.S. GHG emissions2. Most carbon di-oxide emissions caused by human activity are from burning fossil fuels to produce electricity and fuel used for transpor-tation. This is why most public policy and scientific efforts to curb emissions are focused on carbon dioxide associated with energy consumption. While some of the other gases are less prevalent, they are nevertheless considered priority gases because of their high GWP and disproportionate impact on the greenhouse effect.

Measuring GHG emissions – what’s in it for your company

Organizations are measuring and taking actions to reduce their emissions – and in doing so, responding to a growing consensus that this problem needs to be solved through responsible action. In many countries there is an increas-ing expectation that governments will impose tax or other regulations on GHG emissions, and companies want to be prepared by keeping their emissions to a minimum. Some companies also believe their long-term viability will rely on ef-forts to adapt to (or mitigate/abate) environmental change.

Table 9: Greenhouse gases

Greenhouse gas (GHG) activities that contribute lifetime in Global warming to emissions atmosphere3 potential (GwP)4

Carbon dioxide (CO2) Electricity generation and use; 50 – 200 years 1 fossil fuels used in transportation; industrial processes

Methane (CH4) Natural gas and petroleum; 12 years 21 agriculture (livestock digestion); landfill waste decomposition

Nitrous oxide (N2O) Agriculture (synthetic fertilizer, 114 years 310 manure); fuel use in motor vehicle transportation; chemical production of fertilizer and synthetic products

Hydrofluorocarbons (HFCs) Refrigerants used in air conditioning 1.3 – 270 years 37 – 14,800

Perfluorocarbons (PFCs) Industrial processes associated 740 – 50,000 years 6,500 – 12,300 with aluminum production and semiconductor manufacturing

Sulfur hexafluoride (SF6) Electrical transmission equipment 3,200 years 22,800

notE: Sprint recognizes that the GHG measurement process provided, although simplified from many publicly available sources, can be daunting. We expect all suppliers to complete an assess-ment to determine their level of emissions, but we have provided suggestions for smaller suppliers with an office-based business, which may have just one or two sources of GHG emissions. For example, if a company has just a few office buildings, doesn’t manufacture anything, and leases the office space it does use (with utility costs included), not all steps in the booklet may apply.

CHaPtER 2

notE: The Intergovernmental Panel on Climate Change (IPCC) provides the generally accepted values for GWP, which changed slightly between 1996 and 2013. Under the Kyoto Protocol, it was recommended to use IPCC SAR for GWPs to allow comparability between emissions results. We have chosen to follow this approach as well for our own GHG reporting.

2 http://www.epa.gov/climatechange/ghgemissions/ 3 Intergovernmental Panel on Climate Change, “Climate Change 1995: Working Group I: The Science of Climate Change,” 1995 (link). 4 Intergovernmental Panel on Climate Change, “Climate Change 1995: Working Group I: The Science of Climate Change,” 1995 (link).

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Other benefits include:

• Cutting costs – Reduce energy use – Increase productivity – Encourage innovation to reduce energy use

• Managing risks – Identify and understand risks associated with GHG emissions – Prepare and comply with existing or future regulation

• Driving revenue – Meet customer environmental expectations – Meet evolving Request-for-Proposal (RFP) expectations from customers – Develop process and product innovations

• Building reputation – Enhance stakeholder information and corporate reputation through public reporting – Engage and motivate employees

– Participate in relevant voluntary initiatives such as the Carbon Disclosure Project (CDP)

tHE sCiEnCE of CliMatE CHanGE: REason foR ConCERn?

Today, there is an unprecedented concentration of GHG in the atmosphere. The level of carbon dioxide recently reached 400 parts per million (ppm), a much higher level than the pre-industrial age concentration of approximately 275 ppm. Most scientists believe that this increased concentration will raise global average temperature by at least 2°C (3.6°F), meaning that Earth’s inter-related natural systems will be significantly affected in various and inter-related ways, such as rising sea levels, longer and more frequent heat waves and more extreme weather events. It may be difficult for humans to adapt to temperatures as global temperatures increase, which has led to efforts for countries and businesses to curb GHG emissions.

CHaPtER 2

24 CHaPtER 3

what is a GHG inventory?

A GHG inventory is a list of emissions sources and their associated emissions (by type and amount) over a stated period of time (usually a fiscal or calendar year). Your first GHG inventory will serve as the base year (“baseline”), against which to compare your GHG emissions over time. It is not intended to be used to compare your organization’s emissions with those of other companies.

GHG protocol and carbon accounting principles

The GHG discussion in this booklet is based on the GHG Protocol5, the international standard for measuring GHG emissions.The GHG Protocol provides a method for companies across different industries and sectors (e.g., telecommunications, industrial products, utilities, service organizations, chemical companies) to measure and report or emissions from a variety of sources (e.g., transportation, electricity use).

The process of calculating carbon emissions and equiva-lents is referred to as carbon accounting. While reporting GHG emissions is generally voluntary, there are certain standards and rules that should be followed in order to pro-duce a good GHG inventory. Carbon accounting depends more heavily on estimated data, assumptions, and uncer-tainty than one would expect to find in traditional financial accounting. So, it is important to follow carbon account-ing principles and report GHG inventories in a way that is transparent and consistent to ensure that the inventory is complete, accurate, and relevant. When calculating your GHG inventory, follow the principles in Table 10.

Said more simply, include everything big, be transparent about your process and what you are and aren’t including, use the same methodology each year so you can compare results over time, and make sure you do the math right.

one size does not fit all: tailoring GHG inventories

GHG inventories provide a common framework for report-ing emissions for companies in diverse industries and sec-tors. However, just as companies use a variety of consolida-tion methods for financial reporting (e.g., accounting for joint ventures), companies have the same flexibility in reporting their GHG inventories. It is up to each company to deter-mine what to include in their inventories.

3.2: Fundamentals of GHG measurement

Highlights:• What is a GHG inventory?

• GHG protocol and carbon accounting principles

• One size does not fit all: tailoring GHG inventories

5For more information on the GHG Protocol, see www.ghgprotocol.org

6Adapted from EPA Climate Leaders, “ Guide to Greenhouse Gas Management for Small Business & Low Emitters,” August 2011 (link)

The emissions of a company will vary, depending on a given company’s industry and business model. For example, a company that manufactures and sells carpeting will have emissions from the factories that produce carpeting, from transporting the carpeting from the factory to the store, and from the electricity purchased in retail stores it owns. A company that only sells carpeting may only have emissions from the electricity purchased in their retail stores.

Table 10: Carbon accounting principles6

Principle Description

Relevance Ensure the GHG inventory appropriately reflects the GHG emissions of the company and serves the decision-making needs of both internal and external users.

Completeness Account for and report on all GHG emission sources and activities within the chosen inventory boundary.

Consistency Use consistent methodologies to allow for meaningful comparisons of emissions over time. Transparently document any changes to the data, inventory boundary, methods or any other relevant factors in the time series.

Transparency Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.

Accuracy Ensure that the quantification of GHG emissions is systematically neither over nor under actual emissions, as far as can be judged, and that uncertainties are reduced as far as practicable.

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sPRint’s aPPRoaCH:

As a large Fortune 500 corporation, Sprint was asked to disclose its GHG emissions through the Carbon Disclosure Project (CDP), and has done so for the past five years. The CDP process can be intense, and because Sprint is a large and complex business, it takes Sprint between 250 and 500 hours to complete each year.

Despite the time and resource requirements of completing our GHG disclosure through CDP, we prioritize this project each year because of the value it brings to our own greenhouse gas management efforts. We have a 20% absolute GHG reduc-tion goal to reach by 2017. By the time we achieve it we will be purchasing nearly 6.8M fewer kilowatt hours than we purchased in 2007, at a savings of nearly $55M a year in electricity costs. Our direct fuel costs are significantly less than our electricity use costs, but regardless, we will save at least $1M a year in these costs as well.

One of the other benefits we’ve seen is an increase in innova-tion. Although we have an aggressive absolute GHG reduction goal, we still need to support our network traffic growth. Slow and steady change isn’t enough.

An example of our innovative response to GHG reduction is our massive Network Vision project – essentially a re-engineering of our entire network. We are changing out the technology at

switching sites so that it is more flexible, provides more efficient coverage for our customers, and is more energy efficient.

Another example of innovation is our back-up power generation. Historically, we relied on diesel generators to provide a last re-sort for power outages at critical sites. If power was lost, usually due to a natural disaster, the sites go to battery back-up, but if the outage is long enough, the batteries can be fully depleted and the sites then rely on back-up generators. Sprint replaced its diesel generators with hydrogen fuel cells at over 500 sites, eliminating GHG emissions from diesel.

Sprint also believes its reputation has improved through its GHG disclosure and reduction activities. It remains the only U.S. telecom company to have an absolute GHG reduction goal that includes both Scopes 1 and 2. We are just one of two tele-com companies globally – and the only one in North America – to have been accepted into the exclusive World Wildlife Fund’s Climate Saver’s program. Sprint has also been recognized twice on the CDP Disclosure Leadership Index.

And, our CEO has spoken publicly at many industry and climate forums about our GHG reduction goals and why they are important. Although we have not seen evidence that this recognition matters to consumers, it does matter within the CR community, and increasingly, with our business to business customers who value Sprint as a responsible telecom provider.

notE: Sprint has included a copy of its 2013 Master Work-sheet for Calculating GHG Emissions which you can use as a resource. This worksheet allows you to see Sprints emissions categories, activity data, emissions factors, conversion formu-las, and final calculation methods.

scope 2

Emission source GHG type

Indirect Electricity Use CO2, CH4, N2O, CO2e

Purchased CO2, CH4, N2O, CO2e Renewable Energy Credits (REC)

sPRint’s aPPRoaCH

scope 1

Emission source GHG type

Direct #2 Fuel Oil CO2, CH4, N2O, CO2e

Natural Gas CO2, CH4, N2O, CO2e

Propane CO2, CH4, N2O, CO2e

Fleet Fuel CO2, CH4, N2O, CO2e (Gasoline & Diesel)

Jet Fuel CO2, CH4, N2O, CO2e

Refrigeration HFCs, CO2e (HVAC) and Fire Suppression

Sprint’s GHG inventory includes the following Scope 1 and 2 emission sources and greenhouse gases:

26 CHaPtER 3

assign a project manager, identify subject matter experts

Assign a Project Manager to lead your GHG assessment process. It is important for one person to “own” the process, including documentation, to ensure accuracy and consisten-cy. For larger non-office-based companies, we recommend that the project manager establishes a cross-functional team that can work collectively to ensure the GHG inventory is comprehensive. The Project Manager will need to identify the functional owners and experts within the company who are in the best position to help identify emissions sources and collect the necessary activity data. Make sure you include anyone directly responsible for direct energy use, i.e., power to keep the business running, back-up power genera-tion and fuel purchasing. The energy activities they manage will be your primary emissions sources. These experts should have access to the activity data and may have access to data systems that can be used to simplify (and standardize) the data collection process.

Establish your baseline year

Your baseline year is generally the first year you measure your GHG emissions. Reduction targets are typically set against your baseline year, so if you know you have already completed a lot of reduction activities, you may want to establish your baseline year before the current year so you can “claim” these reduction activities. The challenge will be whether or not you have all the data you need to set a prior year baseline.

set emissions boundaries – where should you draw the line on your emissions scope?

Once you have your base year, the next step is to determine which sources of emissions should be included in your GHG inventory. This is determined by the boundaries you set. Most companies use what is called the control approach. This means you measure GHG emissions from all operations over which your company has control. You do not have to measure emis-sions from operations in which your company owns an interest in but doesn’t control. You can define control as either financial or operational. Whichever you decide, you have to stick with it from year to year.

• Financial control: a company has financial control if it has the ability to direct the financial and operating policies of the source of emissions (e.g., factory or vehicle fleet)

• Operational control: a company has operational control if it has the full authority to introduce and implement its operating policies at the source of emissions

If you own less than 100% of your operations (e.g., if you have a joint venture or lease office space), you need to determine what share of your operations you want to report by using the financial or operational control guidance provided above.

3.3: Get ready

Highlights• Assign a Project Manager, identify subject matter experts

• Establish your baseline year

• Set emissions boundaries

• Identify sources of emissions by scope

sPRint’s aPPRoaCH

Sprint assigned a Project Manager to lead the baseline as-sessment. Vice Presidents of several key functions (Network, IT, Environmental Health and Safety, etc.) were asked to provide a point person from their team. This was a full-time project for several months for the project manager, given the size and complexity of our business. We were lucky to have an Environmental Engineer to do this initial assessment for – she was familiar with the concept of GHG emissions, adept with data, and persistent (necessary to make sure you get essential activity data). Select this person carefully. They must be comfortable with data and calculations and possess strong interpersonal skills to build good relationships with the departments you need to help you. This is a terrific project for a summer intern.

EQuity sHaRE aPPRoaCH

Companies with complex organizational structures may report under the equity share approach. Under this approach, a com-pany 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 risks and rewards flowing from the operation.

notE on lEasED offiCE sPaCE: If you lease office space, you should include the associated GHG emissions if you have control over the utilities – that is to say, if you have access to the data and pay utility bills. If utilities are included in rent and you do not have control, you can either include the data (using estimations) or choose to exclude it.

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notE foR sMall businEssEs: This section will be helpful to small businesses with only GHG emissions associated with purchased electricity for leased space and fleet fuel. However, you will likely focus on the following:

Likely primary emissions sources may include owned/leased company vehicles and purchased electricity, if not included in your lease.

Available data will likely include:

Scope 1: Gallons of fuel purchased for owned/leased company vehicles.

scope 2: Total kilowatt hours (kWh) of purchased electricity (if paid by the company).

identify sources of emissions by scope

Next, you will need to identify the sources of emissions to include in your GHG inventory and categorize them ac-cording to one of three defined Scopes, or in other words, by which activities produced the emissions. Scope 1 is defined as emissions from sources owned or controlled by you, for example emissions from fuel directly burned such as gasoline in owned cars, diesel fuel in back-up generators, or gas releases from fire suppression systems. These are also called direct emissions. Scope 2 accounts for emissions from the generation of electricity and other utilities (such as steam or chilled water) you buy from utility companies. Scope 2 emissions physically occur at the facility where the electricity is generated (i.e., coal-burning plant owned by the utility). These are also called indirect emissions.

The GHG Protocol considers scope 3 an optional reporting category that allows you to report all other indirect emissions associated with your business operations. These emis-

sions are a result of business activities, but directly occur from sources or activities you do not own or control. The illustration below provides a great overview of the scopes of emissions and where they occur within business processes. Companies must measure and report on both scope 1 and 2 emissions in order to meet the GHG Protocol require-ments. Scope 3 is considered optional, but provides signifi-cant business value for those companies who already have their scope 1 and 2 emissions in good shape. It is important to note that one company’s scope 2 emissions are another company’s scope 1 emissions. Scope 1 emissions are addi-tive – there is no overlap between companies. Scope 2 and 3 emissions inherently occur outside of your direct opera-tions and in someone else’s. However, if you only reported your direct emissions, you would be understating the emis-sions that occur BECAUSE of your business activity. Note: Sprint’s GHG disclosure criteria do not include scope 3 emissions measurement.

sPRint’s aPPRoaCH

Approximately 96% of Sprint’s scope 1 and 2 emissions are from purchased electricity. If Sprint only reported and man-aged our scope 1 emissions, we would be reporting on a very small portion of the energy load we manage. Companies have direct control over how much electricity they use and in most cases, energy efficiency measures are your best bet for reducing your GHG emissions.

Sprint included only scope 1 and 2 emissions in its first GHG report. It started reporting scope 3 the following year by adding business travel. Over the past several years, Sprint significantly expanded the scope 3 categories it reports on, becoming a global leader in scope 3 GHG reporting.

sPRint’s aPPRoaCH

Sprint primarily uses operational control to define its scope. We report all emissions from sources we operationally con-trol, and some sources where we have financial and partial operational control. Examples of the latter include outsourced operations within our Real Estate, Fleet and Network Manage-ment operations. In those cases, we have contractors who manage the processes, but we set out our operational expec-tations and meet with them frequently to discuss energy and emissions reduction efforts. We are now building more and more of this “control” language into our supplier and even our leasing contracts to ensure we maximize our ability to control and reduce emissions that result from Sprint activities.

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scope 1 (direct): Direct emissions from sources the company owns or controls, including:

• Owned or leased transportation (e.g., fuel used in company-owned fleet)

• Generation of electricity, heat, or steam (e.g., stationary combustion that produces electricity)

• Chemical processing (e.g., the manufacturing of ammonia)

• Fugitive emissions (e.g., leakage from refrigeration and air conditioning equipment)

scope 2 (indirect): Indirect GHG emissions from purchased electricity, heat, steam, and cooling

scope 3 (indirect; optional to report according to GHG Protocol): Other indirect emissions from the com-pany’s value chain (upstream and downstream), including:

Again, you do not need to complete scope 3 GHG mea-surements to meet Sprint’s criteria. We will only cover scope 1 and 2 emissions measurement in this booklet. You may choose to measure and report your scope 3 emissions to better understand your footprint and can find more informa-tion on scope 3 at www.ghgprotocol.org7.

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7World Resources Institute (WRI) / World Business Council for Sustainable Development Corporate Value Chain (Scope 3) Accounting and Reporting Standard, Supplement to the GHG Protocol Corporate Accounting and Reporting Standard, December 2011

Figure 7: Emissions by scope

Source: Greenhouse Gas Protocol, “Corporate Value Chain (Scope 3) Accounting and Reporting Standard, 2011

scope 3 upstream categories scope 3 downstream (emissions occurring before your categories (emissions occurring direct operations) after your direct operations end)

Purchased goods and services Downstream transportation and distribution

Capital goods Processing of sold products

Fuel and energy-related activities Use of sold products not included in scope 1 or 2

Waste generated in operations End-of-life treatment of sold products

Business travel Downstream leased assets

Employee commuting Franchises

Upstream leased assets Investments

Upstream transportation and distribution

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identify activities that produce emissions

Now that you’ve established your baseline year and emissions boundaries, you need to identify the emissions sources that should be in your GHG assessment. Most office-based companies will be concerned with scope 2 emissionfrom purchased electricity, heat, steam, and cooling. However, even these companies will need to report scope 1 emissions if they own or lease vehicles. The questions in Table 11 may help you identify your emission source activities and options for collecting the associated data.

Note on refrigeration and air conditioning: Refrigeration and air conditioning equipment causes GHG emissions through leakage of hydro fluorocarbons (HFCs) during use, maintenance, and/or disposal. This is usually a small source of emissions for office-based companies. However, as mentioned earlier, HFCs are a priority gas because of their high Global Warming Potential (GWP).

Collect available activity data

Once you have a list of emissions sources, you will need to determine what activity data to collect to cal-culate your GHG emissions. The objective is to find out how much energy, fuel, or other emissions source you have actually used during the reporting period (baseline year, or other year you are working on). As an illustrative example, Table 12 lists common data sources for office-based businesses.

3.4: Collect data

Highlights• Identify activities that produce emissions

• Collect available data

• How and under what circumstances to estimate data

• Document your process

Table 11: Common considerations for greenhouse gas emissions

scope source Questions

Scope 1 Stationary combustion Do you have facilities that burn (use) fuel on-site (e.g., natural gas, propane, coal, fuel oil for heating, diesel fuel for backup generators)? Who pays for this and keeps track of the costs?

Scope 1 Transportation Does your organization own and operate vehicles (e.g., cars, trucks, planes, ships) used to conduct and deliver business activities? Who buys the fuel? Do they have records on the volume purchased? Is mileage reported anywhere?

Scope 1 Refrigeration and Do your facilities use refrigeration air conditioning and air conditioning? Do you pay for someone to monitor and fill your refrigerant gases as needed? Do you have records of where your refrigeration units are and what type of gas they use? Do you know the leakage rates by system type?

Scope 1 Purchased gas Do you purchase gases (such as FM200 for fire suppression systems or propane for back-up power) for manufacturing, testing, or laboratories? Who is responsible for reporting gas purchases, use or leakage?

Scope 1 Waste gases Do you flare any gases on-site? How is this measured and managed? Do you have an Environmental Health and Safety group that manages waste emissions? Are you already required to report any waste information to the EPA or other government bodies?

Scope 2 Electricity Do you purchase electricity? Who receives and pays for the bills? Do you already have a team looking at energy efficiency? Is there a database where utility bill information is stored?

Scope 2 Steam Do you purchase steam for heating or cooling? If so, who decides where you use it, pays for it and manages it?

Table 12: Example of common data types for an office-based business

scope activity type of data

Scope 1 Transportation Gallons of fuel – company cars purchased, by fuel type, obtained from invoices

Scope 1 Natural gas use Total kilowatt hours (kWh) or therms, obtained from meter or gas bills

Scope 2 Electricity use Total kilowatt hours (kWh), obtained from meter or electricity bills

scope 3 upstream categories scope 3 downstream (emissions occurring before your categories (emissions occurring direct operations) after your direct operations end)

Purchased goods and services Downstream transportation and distribution

Capital goods Processing of sold products

Fuel and energy-related activities Use of sold products not included in scope 1 or 2

Waste generated in operations End-of-life treatment of sold products

Business travel Downstream leased assets

Employee commuting Franchises

Upstream leased assets Investments

Upstream transportation and distribution

30 CHaPtER 3

sPRint’s aPPRoaCH

Sprint uses an estimate for our refrigerant leakage emissions. We do not have good records on air conditioners and water fountains that were installed more than 10 years ago. We have a good idea of approximately how many systems there are, where they are located, and what type of refrigerant they use. Based on that information, we were able to find secondary data that provided the leakage rate by system type and refrigerant type, and then completed an estimation of associated emissions. We are still working on a reporting process that will improve the accuracy of this data.

You can calculate GHG emissions using primary or second-ary data. Primary data is the most accurate (e.g., utility bills), but secondary data may be necessary when primary data isn’t available or practical to obtain (e.g., utilities costs are included in lease). Examples of primary and secondary data are shown in Table 15.

How and under what circumstance to estimate data

If primary or secondary data aren’t available, you will need to estimate. Estimating allows you to provide the best possible representation of your company’s GHG emissions in your GHG inventory. Table 14 shows two estimation methods to measure your GHG footprint. Remember to document all estimations and assumptions.

Document your process

It is important to document your data collection and estima-tion processes. Usually this is organized around emissions

activity source. For each source, document the data gather-ing process and any assumptions you made. Capture each step including data source, how the data is captured (e.g., the raw data emailed to a data owner or entered in a com-pany database), and how the data is measured.

For example, a document of the data gathering process for a company with retail stores may include utility bills as the source data, the store manager emailing the data to a central manager, and any conversion formulas the central manager needs to use to ensure the data is consistently reported.

Documenting the data gathering process helps ensure calculations are done consistently year to year. Most com-panies complete an Inventory Management Plan (IMP) that includes this information. Sprint has provided a copy of its IMP for your reference.

Table 14: Estimation methods

Estimation method Description Example

Extrapolation Using data from the same or a Primary data (utility invoices) are available for 10 of 85 offices. similar activity type and customizing The company reviews data from the 10 offices and extrapolates it to the relevant region, technology, data to remaining 75 offices, making adjustments for office process, or product. size and location. Proxy Primary or secondary data related There is secondary data available for electricity for Ukraine but to a similar (but not representative) not for electricity in Moldova. For an office building in Moldova, input, process, or activity to the the company uses electricity data from Ukraine, without one in the inventory, directly modification, as a proxy for electricity in Moldova. transferred or generalized without adaptation.

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Table 15: Data types

Data type Description Example

Primary data Observed data collected from specific Utility meters or bills facilities owned or operated by the company Secondary data Generic or industry average data from Data from life cycle inventory published sources that are representative databases or literature studies of a company’s operations, activities, or products

sPRint’s aPPRoaCH

Sprint uses primary data for the majority of its GHG calculations. The majority (96%) of our emissions are from purchased electric-ity and we have a database that stores all of our usage data from utility bills. Our scope 1 emissions data is more challenging. Natural gas use is included in our utility bill system, but data for the other scope 1 emission activities is not as readily available. We have set-up data collection and reporting processes for back-up generator fuel consumption, fire suppression releases, and gaso-line, diesel and jet fuel used by our fleet, but have had to estimate refrigerant leakage for our air conditioners and water fountains. The majority of our scope 3 emissions are based on secondary data or estimates using strong assumptions.

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9Based on data from the EPA Emissions Hub: http://www.epa.gov/climateleadership/guidance/ghg-emissions.html

In this section, we take you through the steps to calculate your company’s GHG emissions. As you read through this section, you may find it helpful to look at Sprint’s GHG in-ventory (separate document provided). This will allow you to see how each step contributes to the final inventory.

Collect and record baseline activity data (Columns A through D in Sprint’s GHG inventory)

Gather data for each activity that produces GHG emissions and record it in a single place - most companies use an Excel worksheet for this, but you may use whichever tool you prefer. Try to capture your activity data using the fewest unit types (for instance, all fuel in gallons, not in quarts, pints, barrels or other units). This will make it easier to compile the data and also to do your conversions later. It will also help ensure that all the collected data is consistent and comparable.

If you are missing activity data, document why and what you’ve chosen to do about it in your Inventory Management Plan. This documentation process is important for transpar-ency and to ensure consistency when you measure and report GHG emissions each year.

Determine emissions factors (Columns E through J on Sprint GHG Inventory)

Once you have your activity data recorded, you will need to determine the level of greenhouse gas emissions associated with each activity. You do this by applying published emissions factors that convert your activity data into GHG emissions. Some companies will need to use sector-specific tools that are designed to calculate emissions in specific sectors such as cement, pulp and paper, metals extraction, or oil and gas. There are many calculation tools online that you can choose from, or you can choose to use Sprint’s spread sheet and substitute your own activity data (and any new emissions fac-tors that might be needed). Whichever route you choose, in this step of the process you are multiplying your activity data by an emissions factor to determine your volume of GHG emissions associated with each activity.

The first step is to locate emissions factors. There are many sources that define GHG emissions factors. Emissions fac-tors for non-electricity fuel use (e.g., natural gas, diesel, or

propane) remain consistent over time and location. However, electricity emissions factors change over time because the composition of electricity changes over time, which we explain below.

Sprint uses “Emission Factors for Greenhouse Gas Inven-tories” from the U.S. EPA’s Center for Corporate Climate Leadership website. This file provides an updated and easy-to-use set of default emission factors in various units that are commonly used in the U.S. See PDF of emissions factors from the U.S. EPA Center for Corporate Climate Leader-ship’s Emissions Factor Hub. Sprint’s GHG inventory uses these emissions factors.

Table 16 lists emission factors for converting most types of non-electricity fuel (displayed in kilograms carbon dioxide equivalent per unit of measure, kg CO2e/scf, gallon, or short ton) to GHG emissions.

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3.5: Turn your activity data into GHG emissions

Highlights• Collect and record your baseline activity data

• Determine emissions factors

• Emissions factors for electricity

• Convert your activity data into metric tons for each of the six priority GHGs

• Convert to MT CO2e

Table 16: Direct GHG emissions factors for common fuels 9

fuel type Emission factor

Natural Gas .05450 kg CO2 per scf

Fuel Oil (No.2) 10.21 kg CO2 per gallon

Wood 1.433 kg CO2 per short ton

Propane 5.59 kg CO2 per gallon

Kerosene 10.15 kg CO2 per gallon

Fuel Oil (No.1) 10.18 kg CO2 per gallon

Fuel Oil (No.5) 10.21 kg CO2 per gallon

Fuel Oil (No.6) 11.27 kg CO2 per gallon

Coal (anthracite) 2.598 kg CO2 per short ton

Coal (bituminous) 2.328 kg CO2 per short ton

Coke 2.531 kg CO2 per short ton

Fuel Oil (No.4) 10.96 kg CO2 per gallon

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sPRint’s aPPRoaCH

Sprint uses the EPA eGRID zip code tool to determine emissions for all U.S.-based sites. The eGRID figures are applied within our utility billing system since we have over 60,000 sites spread across the country. We also have some sites in Puerto Rico, Guam and the Virgin Islands. For those, we apply emissions factors from the International Energy Agency (IEA) because eGRID does not provide emissions factors for the U.S. territories (see rows 79 – 82 in Sprint’s GHG Inventory).

Emissions factors for electricity

GHG emissions factors for electricity vary depending on the region of the country and world and the actual electricity generation sources used by local utilities. Utilities generating electricity constantly change their underlying utility generation mix and the fuels that these utilities use will differ from utility to utility, from region to region and from country to country. For instance, utilities in the Pacific Northwest of the United States use a lot of hydropower (which doesn’t have GHG emissions), while utilities in the Midwest of the United States more often use coal (which has high GHG emissions).The cleaner the energy mix that a utility uses, the lower the emis-sions factor for that region. The cleanest sources of energy for utilities include wind, solar, hydro and other renewables, with nuclear close behind. Among the fossil fuels, natural gas is cleaner than coal and oil. In the United States, the U.S. Environmental Protection Agency (EPA) publishes and updates GHG emission factors on a regional basis (eGRID). The International Energy Administration (IEA) publishes GHG emissions factors for most countries across the globe.

There are several options for applying electricity emis-sions factors. If you have just a few large sites supplied by specific utilities, you may be able to get specific emissions factors based on their energy mix. If you have more sites supplied by varying sizes and numerous utilities, you can apply eGRID regional emissions factors to your usage data for each region. If you have many sites of varying sizes, you will likely want to use the eGRID zip code tool which provides emissions factors based on the zip code for each of your sites.

Look for the most recent emission factors when developing your GHG Inventory and also for factors that are based in units consistent with your activity data. By this doing this, you avoid additional conversions to get your reporting unit (such as gallons of fuel) to match your emission factor unit. Several resources are available for emissions factors:

• Link: Environmental Protection Agency (EPA) Climate Leaders program reference document of emissions factors

• Link: Intergovernmental Panel on Climate Change (IPCC) library of emissions factors

• Link: EPA eGRID data, for electricity in the U.S.

• Link: The EPA greenhouse gas equivalencies cal-culator for small businesses and low emitters allows companies to calculate their GHG emissions using a simplified calculation tool

CHaPtER 3

sPRint’s aPPRoaCH

There are many nuances of GHG emissions reporting that can make the process more complicated. Some of the chal-lenges Sprint has faced include:

• For gasoline and diesel fuel usage associated with passenger car and truck transportation, the emissions factors for CO2, CH4 and N2O use different unit data – gallons of fuel for CO2 and vehicle miles for CH4 and N2O (as outlined in the EPA guide on calculating emis-sions from mobile combustion sources). This means we had to have both gallons of fuel purchased or consumed and vehicle miles travelled. If you only have one of these two, you can convert one to the other using a standard assumption (such as 21 vehicle miles for passenger cars per gallon of gasoline fuel purchased).

• Treatment of Renewable Energy Credits (RECs) – Sprint purchases a large volume of renewable energy credits. You can only subtract your RECs from your scope 2 emissions total if you have retired them during the year. Sprint has several types of RECs in various states. To determine how much we could subtract from our scope 2 emissions, we had to multiply the number of RECs retired by the non-base load eGRID emissions factor as-sociated with the location of the green power source.

• Treatment of various fire suppression system leakages – Sprint uses four different types of fire suppression gases. Each has a different GWP. We needed to multiply the total pounds of gas released for each, by the appropri-ate GWP for each, and then convert to MT. To convert pounds to metric tons, divide by 2204.6.

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Convert your activity data into metric tons for each of the six priority GHGs (Columns K, L and N on Sprint Inventory)

Once you have collected your activity data and found suit-able emissions factors in convenient units, the next step is calculating the metric tons of each of the six priority GHGs. In the example below, with an emissions source of diesel fuel used for back-up power generation, we have emissions fac-tors for CO2, CH4 and N2O. Note that the CH4 and N2O unit of measure is grams of gas per gallon of fuel. This is different than for CO2, which uses a unit of kilograms (kg) of CO2 per gallon of fuel. Emissions factors for CH4 and N2O are gener-ally shown in grams since their values are so small.

Let’s start with CO2. First you multiply the gallons of diesel fuel used by the CO2 emissions factor of diesel fuel (10.21). Since the CO2 factor is stated in terms of kilograms per gal-

lon, the end result is the total kilograms of CO2 for the diesel you used. You must then convert the kilograms to metric tons by dividing by 1,000. So, our formula to get MT CO2

for diesel fuel is:

Gallons of diesel fuel × Diesel fuel emissions factor for Co2 (in kg per gallon)/1,000 (to convert kg to Mt)

or

(1,211,191 ×10.21) /1,000 = 12,366 MT CO2

As you can see in the example, you also need to calculate MT of CH4 and N2O for diesel usage. Since the emissions factor for both CH4 and N2O is grams per gallon instead of kilograms per gallon, the number you divide by to calculate MT is 1,000,000 instead of 1,000 (there are 1,000,000 grams in a metric ton).

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Convert to Mt Co2e

The last step is converting the metric tons (MT) of each of the priority gases into metric tons carbon dioxide equiva-lents, or MT CO2e. Using the example above, you need to convert the CH4 and N2O into MT CO2e. To convert gases into CO2e, you have to multiply them by their Global Warm-ing Potential (GWP), described on page 22 of this booklet.

The GWP of CH4 (methane) is 21 and the GWP for N2O (nitrous dioxide) is 321 (based on IPCC Second Assessment Report). To get the total CO2e, you add MT CO2e, MT CO2e for CH4, plus the MT CO2e for N2O (plus any other of the six priority GHGs). In the chart below, we multiply each gas by the associated GWP to get MT CO2e for each gas, and then add them together, for a total of 12,402.46 MT CO2e emissions from diesel fuel usage.

To summarize, for each of your activity data entries, take the following steps:

1. Record your activity data and units of measure

2. Select your emissions factors (for CO2, CH4, N2O and any other of the priority gases that is relevant) and units of measure

3. Multiply the activity data by each emission factor to determine the volume of the priority gas emissions associated with each activity

4. Convert the volume into MT for each gas

5. Convert the MT for each gas into MT CO2e

6. Add the CO2e of the various gases associated with each activity for a total MT CO2e for each activity

Once you have calculated the MT CO2e associated with each of your emissions sources, you can determine your total emissions by gas type, total by activity type, and total scope 1 and scope 2 emissions.

Emission unit usage Co2 unit CH4 unit n2o unit Mt Mt Mt source Co2 CH4 n2o

Diesel Gal 1,211,191 10.21 kg C02 0.41 g CH4 0.08 g N20 12,366 0.50 0.10 (Fuel Oil #2) per Gal per Gal per Gal

Example: Sprint GHG calculation for diesel fuel, MT of CO2, CH4 and N2O

Example: Sprint GHG calculation of total MT of CO2e

Emission Mt Mt Co2e Mt C02e Mt source Co2 CH4 (GwP) n2o (GwP) Co2e 21 321

Diesel 12,366 0.50 10.43 0.10 30.04 12,407 (Fuel Oil #2)

35

Create an inventory Management Plan (iMP)

An IMP describes a company’s process for completing an accurate corporate-wide GHG inventory. A company uses its IMP to institutionalize its process for collecting, calculat-ing, and maintaining GHG emissions data. The EPA web site provides a link to a Simplified Inventory Management Plan that small businesses can use, as well as an IMP checklist that includes the elements of a high quality IMP. The seven major sections of an IMP are:

• Company Information: Company name, address and inventory contact information

• Boundary Conditions: Organizational and operational boundary descriptions

• Emissions Quantification: Quantification methodologies and emission factors

• Data Management: Data sources, collection process and quality assurance

• Base Year: Base year adjustments for structural and methodology changes

• Management Tools: Roles and responsibilities, training and file maintenance

• Auditing & Verification: Auditing, management review and corrective action

Report GHG emissions

Once you have completed your emissions calculations, you need to determine how you will report them externally. The Greenhouse Gas Protocol provides guidance on what you should include at a minimum:

• Description of your GHG reporting boundaries (as identified in section 4 of this chapter): baseline year and boundaries

• Information on emissions10

– Total scope 1 emissions

– Total scope 2 emissions

– Total scope 1 and scope 2 emissions combined

– Emissions data for each of the six GHGs you are reporting on: CO2, CH4, N2O, HFCs, PFCs, SF6, in metric tons and in metric tons of CO2 equivalent (MT CO2e)

– Base year and emissions over time

– Methodologies used to calculate emissions (the guidance in this booklet is in conformance with the GHG Protocol methodology) or a reference to calculation tools you used

– Details of any sources, facilities, and/or operations that you excluded from your emissions calculation and why it was excluded

If you want to go further and adopt some of the best prac-tices of GHG reporting, you should consider including, if applicable, some of the following additional information on emissions and performance:

• An outline of any GHG management/reduction pro-grams or strategies

• Emissions data broken down by business units/fa-cilities, country, source type, and activity type (e.g., production of electricity, transportation)

• A description of performance measured against internal and external benchmarks

• Relevant ratio performance indicators (e.g., emissions per kilowatt-hour generated, ton of material production, or sales)

• Emissions data from scope 3 emissions activities

• An outline of any external assurance provided and a copy of a verification statement of the reported emissions data

• Information on any contractual provisions addressing GHG-related risks and obligations

• Emissions attributed to generation of electricity, heat, or steam that is sold or transferred to another organization

The Greenhouse Gas Protocol website has a reporting template which may be helpful for first time reporters. The template is called “Sample Corporate Standard Reporting Template” and can be found under “guidance documents” on the Greenhouse Gas Protocol Corporate Standard web-site. To meet Sprint’s criteria, you should publish

CHaPtER 3

3.6: Document and report your results

Highlights• Create an Inventory Management Plan

• Report GHG emissions

• Communicate results

tiP: Sprint included its Inventory Management Plan (IMP) in appendix b. You can see what a typical IMP looks like, and the detailed process we used to calculate our emissions.

10If applicable, the GHG inventory should also include emissions data for direct CO2 emissions from biologically sequestered carbon (e.g., CO2 from burning biomass/biofuels), reported separately from the scopes

36 CHaPtER 3

these items on your website or disclose through the Car-bon Disclosure Project and indicate in the report that your results should be publicly available.

Communicate results

The greatest value of going through the process to mea-sure your emissions is that it helps you identify and prioritize opportunities for improvement. The most obvious opportu-nity should be cost reduction through energy efficiency in targeted areas, but it may also be process improvements. As an example, at Sprint, field technicians were purchas-ing diesel fuel for back-up power generators with various purchasing methods – company credit card, personal card, cash, etc. As a result, we did not have good fuel purchase records. We had no idea what our total fuel spend was because employees used inconsistent purchasing and ex-pense methods. As a result of our GHG measurement and management process, we established specific procedures for purchasing and expensing fuel and now can measure and better manage this expense over time.

We also found value in communicating our results inter-nally to management and identifying and prioritizing GHG reduction opportunities. In our first report, we provided information on the top electricity consuming sites, electric-ity use by business unit and building type, electricity cost averages by state, and other interesting and useful energy facts that no one had ever collectively presented before. Ideally, you would set up a GHG taskforce with represen-tatives from key energy consuming or managing business functions such as environmental affairs, facilities, and fleet, to review the results and create a list of prioritized actions the company can take to reduce its energy costs and GHG emissions. Most companies share the results broadly with employees as well so they can personally get engaged in the effort. Many employees find being engaged on GHG reduction and other environmental initiatives to be person-ally rewarding, so involving employees can be a powerful motivator. Employees are also often able to spot reduction opportunities that management might miss. The public and the media also appreciate this information as a way to understand corporate values, priorities and successes.

37CHaPtER 3

identify GHG reduction opportunities

Identify possible GHG emission reduction opportunities by considering the key activities that contribute to your GHG emissions. Reduction opportunities will range from simple, no cost solutions (e.g., turning off unneeded lights) to capital-intensive projects (e.g., installing energy efficient heating and cooling systems).

Prioritize opportunities and develop a reduction road map by considering:

• Impact of opportunity

• Ease of implementation

• Cost of implementation, including an analysis of return on investment

One suggestion is to start with a 2 – 3 year time line for the road map. Many companies focus reduction efforts in the first year with “quick wins” and no cost (or low cost) opportunities. These quick wins educate and motivate employees by demon-strating the company’s commitment and showing results.

The following sources offer guidance on specific programs to help you reduce emissions:

• Link: EPA resources to help companies reduce GHG emissions

• Link: Energy Star Booklet for Small Business

• Link: U.S. Small Business Administration energy efficiency site

• Link: WWF The 3% Solution report and calculator

set, report, and monitor progress against GHG reduction goals

Goals are an effective means to create momentum for posi-tive change in a company. An impactful goal creates trans-parent expectations that motivate and unite a team around a common purpose.

To set a goal:

1. Identify GHG emission reduction initiatives to under-stand potential impact

2. Review goals of peers, customers and admired companies to understand landscape

3. Select whether to have an absolute (total reduction) GHG emissions reduction goal, or an intensity goal (e.g., emissions per employee, square foot of real estate, or unit produced)

4. Set a goal that reflects your desired level of ambition; one you think you can meet based on reduction oppor-tunities, or a “stretch” goal to challenge and motivate employees

5. Consult key internal stakeholders to get feedback and buy-in. Review the goal with appropriate leadership to gain buy-in and approval and to ensure necessary resources are available

6. Communicate the goal and monitor progress

tiP: Companies in a period of high growth may need to consider an intensity-based reduction goal rather than an absolute reduction goal. For example, if Company Y is grow-ing at 25% year-over-year, it may not be realistic to have an absolute reduction goal from its baseline that was set when it was a start-up. An intensity-based goal such as “reduce our GHG emissions per employee by 20% by 2020” may be more meaningful.

3.7: Develop a plan to reduce GHG emissions

Highlights• Identify GHG reduction opportunities

• Set, report, and monitor progress against goals

notE: If your materiality assessment demonstrates that GHG reduction is not a material topic, Sprint still expects you to measure and publicly report your GHG emissions. How-ever, rather than creating a reduction target, you could modify your environmental policy explicitly including energy efficiency as a business value. Your policy should encourage energy efficient business choices. This could include the use of SmartWay certified vehicles, a preference in leases for build-ings with an Energy Star rating or LEED certification, or using signage in conference rooms or other key locations reminding employees to turn off lights and PCs at the end of the day.

38

sPRint’s aPPRoaCH

Sprint has adjusted our baseline a couple of times. All of these adjustments have been for one of two reasons: 1) more complete data obtained, so new data displaced estimated data, and 2) new categories of data were added, and if we did not have the data going back to 2007, we carried the information backwards. For example, we added propane gas to our reporting in 2012. We have the activity data for 2011, but not for prior years. We used the first year’s data (2011) for 2007 through 2011 since we didn’t have historical data. This produced a minor change in our baseline. A more significant adjustment resulted from adding new scope 3 categories to our report. We do not have historical data, so we took the first year’s data as the results for prior years as well.

11World Resources Institute (WRI) / World Business Council for Sustainable Development Corporate Value Chain (Scope 3) Accounting and Reporting Standard, Supplement to the GHG Protocol Corporate Accounting and Reporting Standard, December 2011

CHaPtER 3

Consider scope 3 inventory

After developing your baseline GHG inventory for scopes 1 and 2, consider reporting on scope 3, your indirect emis-sions along your value chain. Though this is not required to meet Sprint’s criteria, it is worth considering now or in the future because the most significant source of company emissions is often along the value chain. Measuring scope 3 may help you to identify the largest total impact your busi-ness can have on GHG emission reduction.

More information on scope 3 can be found at www.ghgprotocol.org.11

The EPA “Small Business and Low Emitter Booklet to Greenhouse Gas Management” (see link) also includes guidance for reporting scope 3 emissions.

assess when the baseline should be reset According to the GHG Protocol, there are times you can reset your baseline. Examples include adjusting for a signifi-cant change at your company that would affect year-over-year comparison of GHG emissions or progress towards your goal. Baseline resets can be related to structural changes (transfer of ownership or control of emissions-gen-erating activities to another company), mergers, acquisitions and divestments, changes in calculation methodology, out-sourcing or insourcing of emission activities, or a discovery of significant errors. In summary, baseline emissions changes should be retroactively calculated to reflect changes that would otherwise compromise the consistency and relevance of your GHG reporting.

Consider 3rd party assurance

There is an increasing expectation that companies get 3rd party assurance for their GHG results. The idea is similar to financial auditing. You provide your process and data to a 3rd party expert and they review it for accuracy. They provide recommendations for improvement and if you’ve met the criteria they have in place, they will provide you with an As-surance Statement. The CDP Investor Guidance Document provides a list of assurance standards that are relevant and accepted. Sprint uses the AA1000 standard for assurance. There are many choices for getting your data assured with a significant variation in pricing. For Sprint’s initial assur-ance project we received a range of bids from $25,000 to $400,000. We now assure our GHG emissions and our water usage data on an annual basis.

3.8: Where to go from here

Highlights• Consider scope 3 inventory

• Assess when the baseline should be reset

• Consider 3rd party assurance of your data

39

– Details of any sources, facilities and/or operations that you excluded from your emissions calculation and why it was excluded

3. Publish your reduction target along with an explanation of how and why you chose that target

Thank you for taking the time to read through this booklet and to consider the information we have provided. We hope this is helpful and look forward to hearing about your progress. We are interested in your feedback, so if you have suggestions as to how this tool could be improved, please send us a note at csr@sprint.com.

Thank you for being a valued supplier to Sprint. We ap-preciate doing business with you and hope you find CR as rewarding as we have.

notE: If your materiality assessment demonstrates that GHG reduction is not a material topic, you must still measure and publicly report your GHG emissions, AND you must modify your environmental policy to explicitly include energy efficiency as one of your business values. Please publish your revised Environmental Policy or Statement that demonstrates where you have included this concept. This is a Sprint-specif-ic criterion, not based on the GHG Protocol.

CHaPtER 3

Establish an action plan and timeline that allows you to complete and publish your 2014 GHG emis-sions by July 2015

Sprint has established what it believes is an appropri-ate timeline for suppliers to complete and publish their GHG assessment. If a supplier does not yet have a GHG baseline established, the supplier should use 2014 as the baseline year. In order to meet this timeline, you should determine what data you need, how you will collect it, and who is responsible for collecting it. You will need to col-lect all relevant 2014 activity data, perhaps on a monthly or quarterly basis. Once your 2014 data set is complete, you can begin your emissions calculations. Note: Most compa-nies align their GHG reporting period with their fiscal year. If your reporting year is not the calendar year, you may adjust the timeline accordingly so that you complete and publish your first full year of GHG reporting six months after your 2014 fiscal year ends.

Publish your GHG measurement process, results and reduction target

Sprint has identified a specific set of criteria to determine if a supplier has met our GHG criteria. Our criteria are based on the GHG Protocol guidelines and were stated earlier in this booklet:

1. Publish a description of your GHG reporting boundar-ies and baseline yearr

2. Publish information on emissions1

– Total scope 1 emissions

– Total scope 2 emissions

– Total scope 1 and scope 2 emissions combined

– Emissions data for each of the six GHGs you are reporting on: CO2, CH4, N2O, HFCs, PFCs, SF6, in metric tons and in metric tons of CO2 equivalent (MTCO2e)

– Methodologies used to calculate emissions (the guidance in this booklet is in conformance with the GHG Protocol methodology) or a reference to calculation tools you used

3.9: Fulfilling Sprint’s criteria

Highlights• Establish an action plan and timeline that allows you to complete and publish your 2014 GHG

emissions by July 31, 2015

• Publish your GHG measurement process, results and reduction target

1 If If applicable, the GHG inventory should also include emissions data for direct CO2 emissions from biologically sequestered carbon (e.g., CO2 from burning biomass/biofuels), reported separately from the scopes

Page 6

Sprint 2012Greenhouse Gas Inventory Management Plan (IMP)(Modified for use in: Meeting Sprint’s Supplier Criteria: Greehouse Gas Emissions)

Appendix B:

Sprint Inventory Management Plan

1.0 Greenhouse gas inventory 7 1.1 Introduction and background 7

1.2 Goal 7

2.0 Methodology 7 2.1 Guidance 7

2.2 Reporting period 7

2.3 Organizational boundaries 8

2.4 Greenhouse gas list 8

2.5 Emissions quantification 8

2.6 Facilities summary 9

3.0 Roles and responsibilities 11

4.0 Data management 11 4.1 Data collection and emissions 11 calculation process

4.2 Data collection process – 14 quality assurance

4.3 Data collection system security 15

4.4 Schedule 15

5.0 Data elements 15 5.1 Scope 1 15

5.2 Scope 2 16

5.3 Scope 3 17

6.0 Inventory management 18 6.1 Training 18

6.2 Control of records 18

6.3 Adjustment – base year emissions 18

7.0 Auditing and verification 19 7.1 Internal auditing 19

7.2 External auditing 19

7.3 Management review 19

7.4 Corrective action 19

7.5 IMP update procedure 19

Table of Contents

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1.0 Greenhouse gas inventory

1.1 Introduction and background

This document is Sprint’s Inventory Management Plan (IMP) which details our methodology for the management of greenhouse gas (GHG) emissions.

Sprint offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to con-sumers, businesses and government users. Sprint served more than 55 million customers by year-end 2012 and is widely rec-ognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. In addition, Newsweek ranked Sprint No. 3 in both its 2011 and 2012 Green Rankings, listing it as one of the nation’s greenest companies, the highest of any telecommunications company.

Sprint believes that we all share in the responsibility to conduct our businesses in an environmentally friendly manner. This is based on the premise that a company is much more than the products and services it sells. It is also important to consider the effects a company has on the environment. Sprint takes its environmental responsibilities seriously, starting with compliance and extending to all of its environmental impacts as identified through our Environmental Management System.

1.2 Goal

Sprint’s greenhouse gas management efforts started in 2007 when we joined the Environmental Protection Agency’s (EPA’s) Climate Leaders program, an industry-government partnership aimed at developing long-term comprehensive corporate climate-change strategies. As a partner in this program, we agreed to conduct a greenhouse gas (GHG) baseline study utilizing EPA’s methodology. After completing the baseline, we worked with the EPA to set a 10-year absolute goal for GHG reduction of 15% (scope 1 and scope 2). We then increased the goal to 20% in 2011 as part of our commitment in joining World Wildlife Fund’s Climate Savers Program.

2.0 Methodology2.1 Guidance

One of benefits of participating in the Climate Leaders program was technical guidance and oversight. We were able to get input on emissions factors, inventory management, and conversion requirements. When the EPA discontinued the Climate Leaders Program in late 2010, Sprint decided to continue using the EPA Climate Leaders GHG methodology and emissions factors. As part of our GHG process maturity, we sought and obtained external assurance of our GHG measurement and management starting with 2010 data. The assurance was provided by CH2MHill for 2010 data and by Trucost for 2011 and 2012 data. Both CH2MHill and Trucost have provided guidance and recommended minor process adjustments to ensure our GHG management process was continually improving.

In October 2011, Sprint joined the World Wildlife Fund’s (WWF) Climate Savers program, and we were the first Climate Savers partner in the United States to include all three scopes of greenhouse gas (GHG) emissions in their WWF agreement. WWF is the world’s largest conservation organization and has effectively mobilized more than thirty companies to take aggressive mea-sures to scale up climate protection efforts as part of its Climate Savers program. Details on Sprint’s WWF GHG commitment can be found here.

GHG emissions are divided into three types:

•Scope 1: Direct GHG emissions from sources that are owned or controlled by Sprint

•Scope 2: Indirect GHG emissions from the generation of purchased energy consumed by Sprint

•Scope 3: All other indirect emissions that occur in a company’s value chain

Emission factors and methodologies are identified throughout the IMP.

2.2 Reporting period

Sprint uses the calendar year as our reporting basis. Facility and business unit data is compiled on a quarterly basis in an Excel spread sheet and shared with the inventory manager. A small subset of the data is provided annually. The majority of GHG emis-sions are quantified and reported by our Corporate Responsibility (CR) team quarterly, with a total report completed on an an-nual basis. Audited electricity data for the prior year is not available until April 25th each year, resulting is a rather narrow window

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for completing the annual Carbon Disclosure Project (CDP) report. Sprint’s utility data resides in a database. We run a custom calendared report on April 25th to secure our final data for the prior year.

2.3 Organizational boundaries

For the purpose of this study, it is necessary to set organizational boundaries. Sprint uses the Operational Control Approach as referenced in both the EPA Climate Leadership and GHG Protocol. We calculate our GHG emissions for all of the operations over which we exercise control over that are located in the United States, including the U.S. territories of Puerto Rico, Guam and U.S. Virgin Islands. In 2006 and 2007, Sprint acquired most of the former Nextel affiliates and began including these in our GHG reporting process. Operational control indicates that we have the authority to make policy and implement changes at a fa-cility. For those facilities that are leased, operational control is determined by our ability to track our energy use for those facilities (i.e., separately metered facilities where Sprint is responsible for paying the electric bill). Sprint has no jointly owned or operated facilities. Sprint does not manufacture its handsets or accessories.

In 2008, Sprint participated in the creation of a new company named Clearwire. Sprint has a 54% financial ownership of Clear-wire (as of the end of 2012), but does not have operational control over Clearwire assets. Sprint did not adjust downward its GHG emissions in 2008 to account for Clearwire - operation of those assets was minimal and would not likely have contributed in any significant way to 2008 emissions. As use of the assets became greater starting in 2009, Sprint billed Clearwire for energy used by those assets co-located in Sprint facilities. Clearwire energy use is minimal for co-located facilities, and is not metered separately, nor segregated. (Note: Sprint purchased Clearwire in mid-2013.)

2.4 Greenhouse gas list

Each year, Sprint reviews all of our potential GHG emissions sources. Network Engineering coordinates this effort, and works with other business units to determine any new sources. Additionally, our Corporate Responsibility leadership team also provides overall assistance and identifies any significant changes to our operations that would affect GHG emissions. Sprint’s baseline included four of the primary GHGs, which includes CO2, CH4, N2O, and HFCs. Emissions of the four GHGs are clas-sified as either direct emissions or indirect emissions. In accordance with the Global Reporting Initiative (GRI) and EPA Guid-ance, direct emissions are those emissions produced onsite from fuel-burning equipment and fugitive emissions from process equipment. Indirect emissions occur offsite or are controlled by another organization but result from company activities, the most common being electricity use. The GRI and EPA allow for the inclusion of optional emissions as well as direct and indirect.

Sprint provides wireless and long distance voice and data telecommunications services in all 50 states, Guam, Puerto Rico and the U.S. Virgin Islands. Sprint’s direct emissions come from vehicle fleet (both automobile and jet), backup power generation equipment, refrigerant leakage and releases of fire suppression gases. Sprint’s indirect emissions are from electricity use at our facilities. Activity data are collected through the (utility bill partner) database, Network records, Enterprise Real Estate records, jet pilot records and the (fleet partner) fleet database.

Sprint started reporting on scope 3 emissions in 2008 initially including only emissions from employee business travel. When the scope 3 Protocol was officially released in late 2011, Sprint expanded its scope 3 emissions reporting by including Purchased Good and Services, Capital Good, Operational Waste and Upstream Product Transportation. In 2013, Sprint added emissions from Product Use and Employee Commuting for 2012 data.

Business travel emissions source data includes miles driven in rental vehicles, employee reimbursed mileage, commuter rail travel and commercial airline travel. These records are maintained by Human Resources and Sprint’s travel agency. Sprint’s data for Purchased Goods, Capital Goods, Operational Waste and Upstream Product Transportation are sourced from Sup-ply Chain spend records. All sourceable spend data is provided to our Corporate Responsibility team, who maps the spend detail to scope 3 categories. For the past three years, Sprint has worked with Trucost to get the emissions data associated with our sourceable supply chain spend by scope 3 category. Sprint publishes a summary report of this study online each year. The Operational Waste data is supplemented by waste and recycling records from (utility billing system). Employee Commute data is sourced through (HR accounting system company) and records from our Smart Commute database, as well as employee engagement. Product use emissions are based on annual sales results by device category, by state and average electricity con-sumption. We get this data from our finance team.

2.5 Emissions quantification

2.5.1 Emission sources

The table below summarizes Sprint’s reported gases and emission sources.

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Scope 1

Emission type Source GHG

Direct #2 Fuel Oil CO2, CH4, N2O, CO2e

Natural Gas CO2, CH4, N2O, CO2e

Propane CO2, CH4, N2O, CO2e

Fleet Fuel (Gasoline & Diesel) CO2, CH4, N2O, CO2e

Jet Fuel CO2, CH4, N2O, CO2e

Refrigeration (HVAC) and Fire Suppression HFCs, CO2e

Scope 2

Emission type Source GHG

Indirect Electricity Use CO2, CH4, N2O, CO2e

Purchased Renewable Energy Credits (REC) CO2, CH4, N2O, CO2e

Scope 3

Emission type Source GHG

Optional Employee business air travel CO2, CH4, N2O, CO2e

Employee business ground travel CO2, CH4, N2O, CO2e

Employee rail commuting CO2, CH4, N2O, CO2e

Employee reimbursable mileage CO2, CH4, N2O, CO2e

2.5.2 Methodologies & emission factors

Sprint utilizes the Climate Leaders and Greenhouse Gas Protocol (a partnership between the World Resources Institute and the World Business Council for Sustainable Development -WRI/WBCSD) core and cross-sector guidance documents and calcula-tion tools (Excel spread sheets) with associated emission and conversion factors to quantify GHG emissions.

Direct emissions from some minor sources were estimated for the baseline year, but in most cases have been improved in subse-quent years (detailed below). Efforts are continually made to improve our data as we strive for accuracy.

Emission factors

Sprint used emission factors from the Center for Corporate Climate Leadership, Emissions Factor Hub, to quantify direct GHG emissions produced from stationary and mobile combustion of fossil fuels (e.g., diesel, natural gas, propane, gasoline, and jet fuel) http://www.epa.gov/climateleadership/guidance/ghg-emissions.html. The associated emission factors and reference docu-ments are detailed in Section 5 of the IMP. As stated above, emissions were calculated using the EPA Climate Leaders and WRI/WBCSD guidance on GHG calculation.

Indirect emission factors vary by region, based on the fuel mix of the electricity being provided to the site. Sprint uses the EPA eGRID tool to determine the appropriate emissions factors. In 2010, after conversations with the EPA, we changed from using sub-region totals to a more accurate zip code profiler and ensured we were using the most current version of eGRID. The zip code tool ties a site to the appropriate sub-region to determine the correct eGRID factor. Our 2012 emissions use the eGRID 2012 Version 1.0. The eGRID tools are available for download at:

http://www.epa.gov/cleanenergy/energy-resources/egrid/

http://www.eia.gov/oiaf/1605/pdf/Form%20EIA-1605%20Instructions.pdf

2.6 Facilities summary

Sprint has facilities throughout the United States including U.S. Territories, with a much smaller number of facilities in other coun-tries. Sprint does not have operational control at any of these non-U.S. sites, so they are not included in our emissions assess-ment. Headquarter facilities are located in Overland Park, Kansas. Due to the large number of facilities operated by Sprint, a list

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of facilities by type has been compiled instead of a list by address. A list of baseline reporting year 2007 (and subsequent years) for sprint controlled facilities and transportation included under the operational control approach are presented in the tables below.

Sprint controlled assets

This data is maintained as part of the (utility bill partner) billing database and is updated as sites are brought online or decommissioned by Site Development.

Sprint Controlled Facilities: Facility Type 2007 Sprint 2009 Sprint 2011 Sprint 2012 Sprint # Facilities Added Controlled Controlled Controlled Controlled Facilities Facilities Facilities Facilities

Analog

Broadband Wireless Group (BWG)

Cablehead

Cell Site Facilities

COHAB

Commercial

Switching Facilities

Lab

Earth Station

Mobile Internet Service (MIS)

One Sprint Sales Center (OSSC)

Regenerator (REGEN)

Retail Facilities

Point of Presence (POP)

Sprint Customer Office (SCO)

Warehouse

Ultra High Frequency (UHF)

Customer Premise Equipment (CPE)

Data Center

Other

This data is maintained by Fleet Operations.

Sprint Controlled Transportation

Description 2011 Sprint 2012 Sprint # Vehicles Added/ Removed Controlled Transportation Controlled Transportation

Fleet Vehicles

Corporate Aircraft

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3.0 Roles and responsibilitiesThe GHG Inventory was compiled from several information sources. The team members consulted in preparing the emissions inventory are identified in the table below. The list is reviewed and updated annually by the Inventory Manager as part of the inventory management process.

Greenhouse Gas Inventory Team

Name Title Telephone Number Data Provided

(actual names and information removed)

The Inventory Manager is responsible for collecting and reviewing the data needed for the GHG inventory. This role is currently held by the Network Engineer II – Network Development & Engineering Standards (identified in the above chart). The Inven-tory Manager collects data from the specified business unit data owner, inputs the data into the emissions quantification spread sheets, oversees inventory QA/QC, and reports final inventory data for corporate reporting.

Additional GHG inventory team members are added as needed. It is the team’s responsibility to collect all necessary data for emissions estimates. The Inventory Manager will ensure consistent application of emission factors and quantification methods as well as complete updates to the GHG IMP. Additional roles and responsibilities will be developed over time.

4.0 Data management4.1 Data collection and emissions calculation process

4.1.1 Direct emissions - stationary combustion

Fixed Generators

Sprint’s Network Operations partner’s Building Management & Engineering (BME) department provides an inventory of fixed generators for large Network sites. This data is obtained from the Building Automation System (BAS) system in addition to a manual inventory collected for those sites not monitored by the BAS. By utilizing “facility run logs”, diesel fuel use is quantified by the amount of fuel the generator burns per hour based on the load capacity (fuel burned multiplied by hours run per month). Documentation is maintained for both power outages and scheduled generator runs per quarter.

In addition to Network facilities, many administrative and commercial facilities have back-up power generated by diesel fuel. These generators are managed by Sprint Real Estate (SRE). SRE provided their fuel consumption of diesel generators based on the size of the generator and the load that the generator operates, similar to the BME.

Sprint’s data centers also operate and maintain several back-up power generators. They maintain records of their fuel purchases for each year and provided the gallons of diesel fuel purchased for 2012.

Portable generators (cell sites)

Starting with 2011 data, Sprint modified the process to obtain fuel usage. Instead of scrutinizing data points from a system that was partially incomplete and being phased out, emissions were based on known fuel records. More specifically, Sprint’s Network Operations partner developed a report using their Supplier Management Request Tool (SMRT) to document the gallons of fuel dispensed to a portable unit anytime a fuel ticket was closed.

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Emissions of CO2e are calculated at the business unit level using the following process:

Activity data x Emissions factors x Conversion factors

1. Determine Metric Tons (MT) of CO2 for fuel dispensed: Gallons of fuel x CO2 emission factor (kg CO2 per Gallon), di-vided by 1,000 to get metric tons of CO2

2. Determine MT of CH4 for fuel dispensed: Gallons of fuel x CH4 emission factor (g CH4 per gallon) divided by 1,000,000 to get metric tons of CH4

3. Determine MT of N20 for fuel dispensed: Gallons of fuel x N20 emissions factor (g N20 per gallon) divided by 1,000,000

4. Get CO2e for CH4 and N20: MT CH4 x GWP of 21, MT N20 x GWP of 310

5. Determine total CO2e: add MT CO2, MT CO2e of CH4, MT CO2e of N20

Natural gas usage

Sprint has a contract with (utility bill partner) to manage and pay all direct-billed utility bills. There are over 900 natural gas sites managed by (utility bill partner) for Sprint. (Utility bill partner) maintains the natural gas usage data for all of our direct-bill facilities. A calendar normalized query is run on the database maintained by (utility bill partner), pulling all natural gas usage data for the year. (Utility bill partner) audits expense and usage data to ensure accuracy.

Natural gas usage is reported in therms, then converted to kilograms (kg) of CO2 per standard cubic foot (scf) (or grams (g) of CH4 per scf and grams of N20 per scf and then multiplied by the appropriate GWP), aggregated for total kg of CO2e, and then converted to Metric Tons (MT) of CO2e.

Propane usagePropane use is quantified by the amount of propane purchased on an annual basis. The Residential/Commercial End-Use Sector was applied to propane powered generators as these are typically smaller units in contrast to the larger #2 fuel oil power units that are more representative of Industrial End-Use Sector.

The same emissions measurement process as stated above was used with the GWP applied to CH4 and N20:

Gallons of propane x Emissions factor x Conversion factor

4.1.2 Direct emissions - mobile combustion

Vehicle fleet

Sprint leases its vehicle fleet (fleet company). (Fleet company) maintains information on usage of these vehicles and provides us with information about the vehicles’ mileage and the amount of gasoline and diesel fuel used each quarter for our vehicle fleet. Drivers use purchase cards to buy the fuel so quantity purchased is very accurate. Vehicle miles are self-reported, so are less accurate. Vehicle category is based on the typical vehicles that Sprint uses, and guidance from the EPA and their consultants. Ninety percent of our fleet vehicles are 2009 model year or older, so they have fewer emissions per gallon than older cars. The majority of our vehicles use gasoline, but we also have some light trucks that use diesel fuel.

Sprint uses the following approach to calculate emissions from our vehicle fleet:

1. Determine MT of CO2 of Gasoline: Gallons purchased x emissions factor (kg CO2 per gallon)/1,000

2. Determine MT of CH4 and convert to CO2e: Miles driven x emissions factor (g CO2 per mile)/1,000,000 x GWP of 21

3. Determine MT of N20 and convert to CO2e: Miles driven x emissions factor (g CO2 per mile)/1,000,000) x GWP of 310

4. Total the 3 numbers for an aggregated CO2e emissions number for gasoline for fleet.

5. Determine MT of CO2 of Diesel: Gallons purchased x emissions factor (kg CO2 per gallon)/1,000

6. Determine MT of CH4 and convert to CO2e: Miles driven x emissions factor (g CO2 per mile)/1,000,000 x GWP of 21

7. Determine MT of N20 and convert to CO2e: Miles driven x emissions factor (g CO2 per mile)/1,000,000) x GWP of 310

Total the 3 numbers for an aggregated CO2e emissions number for diesel for fleet.

Aviation fleet

For Sprint’s aviation fleet, we own two jets and lease another. Emissions from jet fuel usage for corporate jets are obtained from Corporate Flight Operations. The pilots determine the amount of jet fuel used in pounds, and that quantity is multiplied by a factor (6.84 pounds per gallon) that converts to gallons used. Sprint uses Jet Fuel A.

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1. Sprint uses the following approach to calculate CO2e emissions from our aviation fleet:

2. Determine MT of CO2 of Gasoline: Gallons used x emissions factor (kg CO2 per gallon)/1,000

3. Determine MT of CH4 and convert to CO2e: Gallons used x emissions factor (g CH4 per gallon)/1,000,000 x GWP of 21

4. Determine MT of N20 and convert to CO2e: Gallons used x emissions factor (g N20 per gallon)/1,000,000) x GWP of 310

Total the 3 numbers for an aggregated CO2e emissions number for jet fuel for fleet.

4.1.3 Direct emissions – HVAC and fire-suppression equipment

Refrigerant leakage

Sprint has over 50,000 HVAC units in operation at our facilities. The units are at cell sites, larger network facilities, our data cen-ters and our office buildings.

After receiving an initial inventory list from Sprint’s network regions, research was conducted to determine the charge capac-ity and leakage rate for each type of equipment based on size, output capacity, manufacturer, and refrigerant type. For those pieces of equipment for which charge rates were not readily available, estimates were made based on similarly sized units. In 2008, based on the results of Sprint’s baseline, it was determined that HFCs released from refrigerant sources (HVAC systems) were “insignificant” (0.6%). This was based on estimations of potential leakage rates for the various types of equipment used. Our baseline estimate of CO2 emissions was 14,928 MT. We have used this figure in each of our subsequent annual invento-ries, including 2012. The refrigerants used in our HVAC systems include R-22, R-134a and R-404a. Emissions factors were taken from “Direct HFC and PFC Emissions from Use of Refrigeration and Air Conditioning Equipment”, May 2008, EPA430-K-03-004 documents.

Fire Suppression

Fire suppression releases are tracked on a quarterly basis by the BME and also by Sprint’s Real Estate partner. In 2008, data was included to incorporate HFCs released from fire suppression chemicals. We use four different types of fire suppressants – Halon 1301 (only for older systems that have been “grandfathered” as acceptable by the EPA), FM200, Ecaro 25 and Inergen. If a new fire suppression system is needed, it will use FM 200, Ecaro 25 or Inergen. Data on any fire suppression releases is provided from our Network and Real Estate teams on a quarterly basis. Sprint uses refrigerant Global Warming Potential (GWP) factors from IPCC Second Assessment report, in accordance with the Kyoto Protocol.

Once the data was obtained, the following calculation was used to determine the metric tons of CO2e for each type of fire sup-pressant release:

MT CO2e = Amount released in pounds x GWP/2204.6

4.1.4 Indirect emissions

Electricity use

Indirect emissions were quantified utilizing electricity bills. The (utility bill partner) database maintains records of electrical bills for all Sprint facilities where we are responsible for the electricity bill. There are over 53,000 electrical accounts managed by (utility bill partner) for Sprint. A calendar normalized query is run on the database maintained by (utility bill partner) pulling all electrical usage data for the year. (Utility bill partner) audits expense and usage data to ensure accuracy.

GHG emissions from electricity generation are controlled by the fuel-mix available to utilities on a regional basis. The fuel-mix by sub-region is reflected in the Emissions & Generation Resource Integrated Database (eGRID) from the U.S. Environmental Protection Agency (EPA). Sprint uses the latest available version of eGRID to determine GHG associated with its electricity use each year. For 2012 electricity usage, we used eGRID 2012 Version 1.0. To arrive at combined CO2e values, (utility bill partner) system defaults to the Intergovernmental Panel on Climate Change (IPCC) Second Assessment Report (SAR) 100-year Global Warming Potential (GWP) per industry guidance and best practices for CO2, CH4, and N20. For the U.S. Territories (Sprint has facilities in Guam, Puerto Rico, and the Virgin Islands), (utility bill partner) uses U.S. Energy Information Administration Form E1A-1065 (2010) emission factors, Table F.1 Page 129.

Sprint has a Renewable Energy Working Committee that makes recommendations regarding renewable energy power and Renewable Energy Credit (REC) purchases. Sprint’s 5-year wind contract with Kansas City Power and Light ended in December 2011. Until Sprint finds a cost-effective green power purchase agreement, it has purchased green-e certified RECs to continue

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its commitment to green energy sources. The eGRID 2012 Version 1.0 sub-region non-base load emission factors (as docu-mented in the draft Climate Leaders guidance for Purchase of Green Power and RECs are used to quantify the amount of CO2, N20, and CH4 emissions offset by the purchase. For each REC, Sprint uses the REC attestation provided by the REC seller to identify the eGRID sub-region in which the renewable energy was generated. If a REC cannot be explicitly mapped to a specific sub-region, the U.S. national average emissions factor is used. As allowed in the 2012 Carbon Disclosure Project Guidance, Sprint subtracts the calculated emission value from the total amount of CO2 associated with its electricity purchases to reach its final scope 2 emissions number.

4.1.5 Optional Emissions

Employee Business Travel (air, ground, rail commuting)

Sprint has a contract with (travel company) to manage employee travel. (Travel company) provided Sprint with detailed spread sheets that break out the total mileage of each trip travelled by Sprint employees on commercial aircrafts. The mileage is then sorted to separate it between short, medium, and long haul flights, per U.S. EPA Climate Leaders Guidance. Our travel agency also provides mileage data for rail (train) travel.

Sprint utilizes three rental car agencies. Each of the rental car agencies provided Sprint with detailed spread sheets with the number of miles Sprint employees drove in their rental vehicles for the year as well as gasoline usage.

Employee business travel (reimbursable mileage)

Sprint Human Resources uses (an HR accounting system) database to track the amount of miles employees are reimbursed each year for business travel. Human Resources completes a query on the database to provide a spread sheet that identifies the actual quantity of miles reported by employees each calendar year.

Sprint followed the calculation process and emissions factors from the U.S. EPA - Optional Emissions from Commut-ing, Business Travel, and Product Transport.

Sprint uses the following approach to calculate CO2e emissions from employee business travel:

1. Collect activity data from our rental car agencies and (HR accounting system). We collect all of the data in passenger or vehicle miles, whichever is most appropriate

2. Multiply the activity data by the emissions factors for CO2, CH4 and N20 (kg CO2 per mile or g CH4 or N20 per mile)

3. Convert the results, which are either in kg or g of CO2, CH4 and N20 to Metric Tons

4. Multiply the MT of CH4 and N20 by the appropriate GWPs (21 for CH4 and 310 for N2)

5. Add up the total for combined CO2e for business travel

4.2 Data collection process – quality assurance

The process for collecting data is reviewed by Sprint personnel and their contractors each year during the GHG reporting pro-cess. The ability to verify the consistency and accuracy of the activity data collected for the GHG inventory depends largely on the GHG data-management system. Since spread sheets do not inherently provide data accuracy and consistency for verifica-tion, external data quality assurance processes have been implemented.

Quality control measures taken are as follows:

• The CR team works with (utility bill partner) and Sprint Real Estate to ensure all new facilities are included in the study

• Reviews of business units’ databases are conducted to ensure capture of new equipment

• Reviews of the (partner) fleet database are conducted by Fleet Management to ensure capture of new or removed vehicles

The major source of uncertainty and error associated with the data compilation process is related to the hand-entry of data, typi-cally into spread sheets, and unit conversion calculations. To help minimize these types of errors, our business unit data owners and the Inventory Manager carefully reviews the data and includes a comparison of the data reported the previous year. Any significant variations from the established benchmark are identified and investigated for consistency. Sprint has purchased a new web-based reporting system for its CR data that is in the process of being implemented. This will eliminate the excel-based reporting processes, accept data files from (utility bill partner) and other Sprint systems, allow distributed data entry and support audits. We are looking forward to improving the accuracy and confidence of our CR data going forward.

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4.3 Data collection system security

Most of the existing systems within Sprint that maintain activity data for GHG inventory purposes already provide some data security features (i.e., user ID and password; departmental accessibility via the intranet, etc.). These systems are located on a central server within the Sprint network and therefore are under the control of current IT security and back-up standards.

Spread sheet tools that are used for the collection of data and calculation of GHG emissions are located on the Inventory Manager’s computer and an intranet drive with access or password protection to ensure data cannot be accidentally modified by other staff members that do not own the data. The only person with permission to alter the data is the Inventory Manager that tracks and maintains the data. In the new web-based reporting system, permissions are assigned by user and the administrator is the only person who can make certain types of modifications. The new system will provide excellent data security.

4.4 Schedule

Facility and business unit data are provided to the inventory manager on a quarterly basis. Estimated GHG emissions are re-ported quarterly with the understanding that not all sources of emissions can be included quarterly. Since some of Sprint’s sites only receive invoices quarterly, we do not have final billing for the prior year until March 31st each year. (Utility bill partner) audits the data a month in arrears, so we cannot close out prior year results until the end of April each year. We have chosen a lock-down date of April 25th. We complete our GHG inventory and reporting as part of our Carbon Disclosure Project submission each year (due May 31st).

5.0 Data elementsExcel-based workbooks were used to collect, store, transfer, and process the GHG emissions data. A quantification spread sheet was used to calculate GHG emissions from Sprint facilities. For each source of emissions, the spread sheet used emis-sions factors taken from the U.S. EPA web site, Climate Portal, Emissions Factors for Greenhouse Gas Inventories, last modi-fied, November 7, 2011. The inventory tools and emission factors are identified below. Each business unit data source “owners” provided activity data for their respective facilities in a master spread sheet, and then the Inventory Manager copied the appropri-ate figures into the quantification spread sheet to calculate emissions. The spread sheet automatically quantifies emissions for a given year based on the activity data entered. In future years, the calculations will be done by the new CR reporting system.

5.1 Scope 1

5.1.1 Stationary combustion

Data Source GHG Emissions Factor - gram (g) or kilogram (kg)/gallon and gram (g) or kilogram (kg)/ standard cubic foot (scf)

Fixed Generators – #2 Fuel Oil CO2 10.20648 kg CO2/gallon

Fixed Generators – #2 Fuel Oil CH4 .41 g/gallon

Fixed Generators – #2 Fuel Oil N20 0.08 g/gallon

Fixed Generators – Propane CO2 5.59286 kg CO2/gallon

Fixed Generators – Propane CH4 .27 g/gallon

Fixed Generators – Propane N20 0.05 g/gallon

Natural Gas - All CO2 .0545 kg CO2/scf

Natural Gas - All CH4 0.001028 g/scf

Natural Gas - All N20 0.00103 g/scf

EPA Center for Corporate Climate Leadership, Emission Factor Hub: http://www.epa.gov/climateleadership/documents/emis-sion-factors.pdf , Table 1. A GWP of 21 was used for CH4 and 310 was used for N20.

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5.1.2 Mobile combustion: fleet vehicles

Data Source GHG Emissions Factor kilogram (kg)/gallon & gram (g)/mile

Diesel Fuel - Light Duty Trucks CO2 10.21 kg /gal

Diesel Fuel - Light Duty Trucks CH4 0.0010 g /mile

Diesel Fuel - Light Duty Trucks N2O 0.0015 g /mile

Motor Gasoline - Light Duty Trucks CO2 8.78 kg /gal

Motor Gasoline - Light Duty Trucks CH4 0.0163 g/mile

Motor Gasoline - Light Duty Trucks N2O 0.0066 g/mile

Jet Fuel (Kerosene Type) CO2 9.57 kg/gal

Jet Fuel (Kerosene Type) CH4 0.2700 g/gal

Jet Fuel (Kerosene Type) N2O 0.3100 g /gal

EPA Center for Corporate Climate Leadership, Emission Factor Hub: http://www.epa.gov/climateleadership/documents/emission-factors.pdf, Tables 2, 3 and 4. A GWP of 21 was used for CH4 and 310 was used for N2O

5.1.3 Fugitive emissions: refrigerants & global warming potentials (GWPs)

Gas/Refrigerant GWP Source

HFC-134a 1300 IPCC Second Assessment Report (1995) (1.1.1.2-Tetrafluoroethane)

R-404A 3260 ASHRAE Standard 34

HCFC-22 or R-22 1500 IPCC Second Assessment Report (1995)

HFC-125 (Ecaro 25) 2800 IPCC Second Assessment Report (1995)

HFC-227 (FM200) 2900 IPCC Second Assessment Report (1995)

CF3Br (Halon 1301) 5400 Ozone Depleting Substance (ODS). IPCC Second Assessment Report (1995)

Inergen 0 New fire suppression type for Sprint Zero emissions.

5.2 Scope 25.2.1 Purchased electricity

eGRID 2012 Version 1.0

5.2.2 Renewable energy purchases and RECs purchases

EPA Center for Corporate Climate Leadership, Emission Factor Hub: http://www.epa.gov/climateleadership/documents/emis-sion-factors.pdf, Table 7b.

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5.3 Scope 3

5.3.1 Employee business travel - air

Flight Description CO2 Emissions Factor CH4 Emissions Factor N2O Emissions Factor kilogram (kg)/passenger mile gram (g)/passenger mile gram (g)/passenger mile

Long Haul (>=700 miles) 0.1850 kg/passenger mi 0.0104 g/passenger mi 0.0085 g/passenger mi

Medium Haul 0.229 kg/passenger mi 0.0104 g/passenger mi 0.0085 g/passenger mi (>=300 and <700 miles)

Short Haul (<300 miles) 0.277 kg/passenger mi 0.0104 g/passenger mi 0.0085 g/passenger mi

U.S. EPA Climate Leaders Guidance - Optional Emissions from Commuting, Business Travel, and Product Transporthttp://www.epa.gov/climateleadership/documents/resources/commute_travel_product.pdf

5.3.2 Employee business travel - ground

Vehicle Fuel Type CO2 Emissions Factor CH4 Emissions Factor N2O Emissions Category Used Factor kilogram (kg)/mile gram (g)/ mile gram (g)/ mile

Passenger Car Motor Gasoline .364 kg/mile 0.0131 g/mile 0.032 g/mile

http://www.epa.gov/climateleadership/documents/emission-factors.pdf

5.3.3 Employee business travel - rail

Flight Description CO2 Emissions Factor CH4 Emissions Factor N2O Emissions Factor kilogram (kg)/passenger mile gram (g)/passenger mile gram (g)/passenger mile

Intercity Rail 0.185 kg/passenger mi 0.002 g/passenger mi 0.001 g/passenger mi (e.g. Amtrak

Commuter Rail 0.172 kg/passenger mi 0.002 g/passenger mi 0.001 g/passenger mi

Transit Rail 0.163 kg/passenger mi 0.004 g/passenger mi 0.002 g/passenger mi (e.g. Subways

http://www.epa.gov/climateleadership/documents/emission-factors.pdf

5.3.4 Employee business travel – reimbursable mileage

Vehicle Fuel Type CO2 Emissions Factor CH4 Emissions Factor N2O Emissions Factor Category Used

Passenger Cars Motor Gasoline .364 kg/mile 0.0131 g/mile 0.032 g/mile

U.S .EPA Climate Leaders Guidance - Optional Emissions from Commuting, Business Travel, and Product Transport

http://www.epa.gov/climateleadership/documents/resources/commute_travel_product.pdf

http://www.epa.gov/climateleadership/documents/emission-factors.pdf

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6.0 Inventory management

6.1 Training

Corporate Responsibility and EHS have reviewed the WRI/WBCSD and Climate Leaders Protocols, guidance documents, and quantification tools. Workshops are attended as deemed available and financially feasible. Inventory team members understand that the data they gather is used to estimate GHG emissions that will be reported on a corporate level annually.

6.2 Control of records

Records developed during the GHG baseline study are controlled and retained in accordance with Sprint’s Document Retention and Control Policy or through the GHG emissions reduction goal year, whichever is longer. The current retention policy allows for the maintenance of environmental records for a minimum of ten years. Records developed for subsequent emissions assess-ments are maintained on Docshare, our online document repository. Data also now resides in our new online CR Data Manage-ment system.

6.3 Adjustment – base year emissions

The base year for Sprint’s Climate Leaders reporting was 2007.

Adjustments to the inventory are warranted when there are mergers, acquisitions, or divestitures (e.g., additions or deletions to the emissions inventory facility list), additional emission sources brought online, and/or a change in the quantification methodolo-gies or emission factors. It is anticipated that on-going refinement of the inventory process will result in some modification to the base year inventory. The IMP will be updated to reflect any inventory process and management changes.

The inventory will be revised for the following reasons: (1) additional or more complete activity data becomes available, (2) improved emission factors or estimation methodologies, and (3) operational or structural changes. Operational or structural changes include acquisitions and divestures.

Through 2012, Sprint has not adjusted its 2007 baseline. Although we acquired the Nextel Affiliates, which included network sites and data centers, we did not add these to our baseline. We believe the impact of these acquisitions was less than 5% for our total emissions and believed we could manage that volume and still meet our emissions target. The same is true for our ac-quisition of Virgin Mobile, although the acquired sites were commercial and data center, and not network. The only modifications to our baseline data have been when we have improved our data collection process in some of the elements of scope 1. For example, if in 2011 we were able to better measure our emissions associated with diesel generators, we used the 2011 figure for both 2011 and the prior years. Each of these changes is documented annually in our CDP submissions.

6.3.1 Structural changes

Structural changes at Sprint are identified during the annual inventory reporting process via consultation with the Sprint Real Estate and Network Operations Group. Sprint applies the EPA Climate Leaders Design Principles criteria and procedures to de-termine whether a structural change requires a change in Base Year emissions, and to determine how the Base Year emissions should be adjusted.

Per the Climate Leaders Design Principles guidance, Base Year emissions are not recalculated for the following structural changes:

• Acquisition of new facilities that did not exist in the Base Year

• Outsourcing/Insourcing reported under Core Indirect Emissions

• Organic Growth or Decline

As stated above, we have chosen not to adjust our Base Year to date for facility acquisition and we have not had any facility divestiture.

In the event of a merger, the emissions from facilities included in the structural change will be treated as an acquisition if owner-ship increased or as a divestiture if co-ownership decreased.

In the event of organic growth (e.g., increase in operations, new facility brought online, etc.) or organic decrease (e.g., decrease in operations, closing of facility, etc.), we have not made any adjustments to the Base Year.

6.3.2 Methodology changes

In the event of a change in methodology or emission factor that result in a 5% or greater change in the overall emissions total, the Base Year will be adjusted. If improved data becomes available for the Base Year compared to subsequent years, adjustments will be made to the Base Year to ensure consistency of historical reporting.

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7.0 Auditing and verification

7.1 Internal auditing

The EHS team reviews the IMP each year in the second quarter, and makes any necessary revisions or updates that are needed.

7.2 External auditing

For the 2011 and 2012 reporting years, Sprint utilized Trucost to externally review and assure that our GHG quantification efforts are in accordance with the AA1000 standard.

7.3 Management review

Sprint’s GHG quantification process is reviewed each year by both the EHS & Corporate Responsibility groups.

7.4 Corrective action

When any deficiencies are discovered, the necessary corrections are made as soon as feasible, and efforts are made to prevent these deficiencies in the future.

7.5 IMP update procedure

The IMP is a living document that will drive continuous improvement in the accuracy and efficiency of Sprint’s GHG emissions inventory. EHS is responsible for working with Corporate Responsibility and the business units to update the IMP by second quarter annually. Potential updates to the IMP include:

• Updated data management procedures

• Updated data requirements and collection tools

• Updated auditing and verification procedures

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Appendix C: Resources GHG emissionsGreenhouse gas protocol – the internationally recognized GHG standard for reporting

•Link to Greenhouse Gas Protocol

•Link to Greenhouse Gas Protocol “Sample Corporate Standard Reporting Template” (found under “guidance documents”)

U.S. Environmental Protection Agency (EPA)

•Link to the EPA’s Climate Change website

•Link to the Guide to Greenhouse Gas Management for Small Business & Low Emitters

Emissions factors

•Link: Environmental Protection Agency (EPA) Climate Leaders program reference document of emissions factors

•Link: Intergovernmental Panel on Climate Change (IPCC) library of emissions factors

•Link: EPA eGRID data, for electricity in the United States

•Link: The EPA greenhouse gas equivalencies calculator for small businesses and low emitters allows compa-nies to calculate their GHG emissions using a simplified calculation tool

Guidance on scope 3

•Link to Greenhouse Gas Protocol

•Link: The EPA “Small Business and Low Emitter Guide to Greenhouse Gas Management, which includes guidance for reporting scope 3 emissions

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Appendix D:

Resources for materiality assessmentsResources for sector-specific topics

1. Global Reporting Initiative (GRI)

The GRI provides guidance for reporting a company’s performance on economic, environmental, and social topics. GRI documentation includes both generic and industry-specific topics. Reviewing the GRI’s sector- specific guidance may provide additional relevant topics.

– Link to GRI

– Link to GRI sector guidance

2. Sustainability Accounting Standards Board (SASB)

SASB is developing industry-specific sustainability accounting standards. The SASB Environmental, Social, and Governance (ESG) topics and SASB issue briefs may provide additional relevant topics.

– Link to SASB

– Link to SASB’s list of issues by industry

3. Dow Jones Sustainability Index (DJSI)

The RobecoSAM Corporate Sustainability Assessment provides the input for the DJSI annual questionnaire, which is sent to the largest listed companies in the world by market capitalization (in 2013, the questionnaire was sent to the largest 2500 companies). RobecoSAM’s industry-specific questionnaires are not publicly available – check with your Investors Relations team to see if they receive a questionnaire from RobecoSAM around March/April of each year. If not, the list of topics per industry may still provide additional relevant topics.

– Link to RobecoSAM

– Link to RobecoSAM list of topics per industry

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This document is intended to be read only as a summary of, and in the context of, Sprint’s experience with corporate responsibility goals and practices, and is based only on information made available to Sprint as of the date written.

Sprint does not intend this document to be a tutorial, handbook, or recommendation regarding corporate responsibility practices, designation or certification; compliance with laws, regulations, governmental requirements, or governmental or industry standards.

Suppliers should not rely upon or cite this document in designing and implementing their own corporate responsibility practices or otherwise. Suppliers should engage their own experts, advisors, and counsel regarding all corporate respon-sibility matters. The text of this document may not be complete or comprehensive and may omit information regarding its subject matter.

Sprint makes no representation or warranty regarding the accuracy or content of this document, provides this document “AS IS”, and expressly disclaims all warranties regarding this document, whether express or implied, including any warranty of merchantability or fitness for a particular purpose.

This document is subject to change at any time, without notice, in Sprint’s sole discretion.