voluntary greenhouse gas reporting

Environmental Quality Management / DOI 10.1002/tqem / Summer 2011 / 29

© 2011 Wiley Periodicals, Inc.Published online in Wiley Online Library (wileyonlinelibrary.com)DOI: 10.1002/tqem.20297

Greenhouse gas

(GHG) reporting

refers to organiza-

tions’ disclosure of

information about

emissions of carbon

dioxide and other

GHGs resulting

from their opera-

tions, as well as the strategies they have in place

to manage and reduce these emissions.

Increasingly, GHG reporting also involves

disclosure of information about the risks and

opportunities posed to business operations from

climate change. Risks and opportunities vary

depending on company-specific conditions. Ex-

amples of risk include the increased costs re-

quired to comply with new regulations and the

potential for damage to company assets resulting

from physical changes (such as sea-level rise).

Opportunities include the chance to enter new

markets or develop new products that help com-

panies reduce their GHG emissions (e.g., energy-

efficient equipment) or adapt to the physical

impacts of climate change (e.g., flood-protection

infrastructure).

Growth in GHG ReportingEarly practice in GHG reporting was driven

in part by regulations targeted at specific high-

emitting sectors, such as electricity generation.

Over the last decade, however, the exponen-

tial growth in corporate GHG reporting in

many business sectors has occurred despite the

lack of comprehensive climate change legisla-

tion in the United

States.

One of the best-

known and most

established GHG re-

porting programs is

the Carbon Disclo-

sure Project, or CDP

( w w w . c d p r o j e c t

.net). The CDP has been surveying companies

globally about their GHG emissions and associ-

ated risks, opportunities, and strategies since

2003. In 2010, over 3,000 companies responded

to the CDP questionnaire. Respondents included

82 percent of the 500 largest companies, up from

a response rate of 77 percent in 2008. The num-

ber of responding companies has increased every

year since the program’s inception, as shown in

Exhibit 1.

Drivers for Voluntary GHG ReportingThe growth in GHG reporting has been driven

primarily by nonlegislative factors such as those

shown in Exhibit 2. These drivers have created

a kind of de facto regulatory environment, where

companies increasingly view external GHG re-

porting as a necessary part of doing business.

Drivers include pressures upon companies to act

(or react). They also include opportunity-driven

factors, where companies are taking a more pro-

active approach.

Emma Armstrong

Voluntary Greenhouse Gas Reporting

Companies face growing

stakeholder pressure to disclose

(and reduce) GHG emissions

Emma Armstrong30 / Summer 2011 / Environmental Quality Management / DOI 10.1002/tqem

As the CDP has gained prominence, the re-

porting process has become competitive. The

CDP rates company responses on the quality and

comprehensiveness of the disclosures made and

(starting in 2010) on the level of commitment to

and achievements made in reducing GHG emis-

sions. The annual CDP score that a company

receives attracts attention in the boardroom, and

many companies now set goals to improve on

their CDP score each year.

Companies responding to the CDP question-

naire have the option of making their responses

publicly available on the CDP website or restrict-

ing access to the CDP and its member investors

only. However, the CDP strongly encourages full

transparency. In the majority of cases, respond-

ing companies do elect to make their responses

publicly available.

■■ Shareholder ResolutionsInvestors are flexing their muscles in other

ways too. In particular, increasing use is being

made of shareholder resolutions to encourage

Investor Interest

■■ CDP Reporting The CDP is a collaboration between a non-

profit organization and a group of institutional

investors. In the early 2000s, these investors

acknowledged that the extent to which compa-

nies effectively manage the commercial risks and

opportunities potentially resulting from climate

change could have a material effect on business

success—and ultimately on stock prices and the

performance of investment portfolios. By 2010,

the group had grown to 534 institutional inves-

tors, with a total of $64 trillion in assets under

management.

The group of investors set out to better un-

derstand climate change risks and opportunities

(and the extent to which corporations recognize

and manage them) through the annual CDP

questionnaire. The backing of the CDP by these

financial investors has likely had a significant im-

pact on the year-on-year increase in companies’

rate of response to the CDP questionnaire.

Exhibit 1. Number of Companies Responding to CDP Questionnaire

Environmental Quality Management / DOI 10.1002/tqem / Summer 2011 / 31Voluntary Greenhouse Gas Reporting

their “total carbon footprint” comprises not only

emissions from their direct operations, such as

combustion of fossil fuels used for heating or in

company vehicles (Scope 1 emissions) and use of

electricity (Scope 2 emissions), but also emissions

arising indirectly from their operations. Examples

of such indirect emission sources include trans-

portation of a company’s product by third-party

logistics providers and manufacturing of a product

for a brand owner by a contract manufacturer.

These indirect emission sources are catego-

rized as Scope 3 emissions under the GHG Ac-

counting Protocol jointly developed by the World

Resources Institute and the World Business Coun-

cil for Sustainable Development.1 Over the past

couple of years, significant effort has gone into

developing standardized methods to quantify

Scope 3 emissions, leading to the drafting in 2010

of two new GHG accounting standards.2

The number of corporations making commit-

ments to measure their Scope 3 emissions (as a

greater corporate transparency on climate change

issues. In the 2010 proxy season, 88 US and

Canadian companies received 101 shareholder

resolutions on climate change and sustainability,

a 48.5 percent increase over the year before, ac-

cording to the Investor Network on Climate Risk

(www.incr.com).

Thirty-four of these resolutions called for sus-

tainability reports that included strategies related

to climate change, eight asked for company-

specific sustainability reports, and 10 requested

the adoption of climate change principles. Over

50 resolutions were withdrawn by investors after

their demands were met with action or commit-

ments on the part of corporations.

Supply-Chain Pressure

■■ Reporting of Indirect EmissionsAs GHG management and reporting practice

has evolved, so has companies’ recognition that

Exhibit 2. Drivers for Voluntary GHG Reporting


members’ behalf. The CDP also evaluates the re-

sponses received from the suppliers, providing its

member companies with reports tailored to their

supplier groups.

The CDP survey includes questions designed

to gather data that will be helpful to individual

customers looking for ways to evaluate and re-

duce their supply-chain emissions. For example,

suppliers are asked to allocate their Scope 1 and

2 emissions to individual customers and to pro-

vide data on the GHG life-cycle impacts of their

products.3 This aspect of GHG accounting is still

relatively new but is rapidly evolving due to the

growing interest in Scope 3 emissions manage-

ment.

Getting Ahead of the Regulatory CurveIn some cases, companies have started to

quantify and externally report their GHG emis-

sions in order to get ahead of the regulatory

curve.

■■ California Climate Action Registry The California Climate Action Registry

(CCAR) offers an early example of this trend.

CCAR was formed in 2001 as a voluntary GHG

reporting program for organizations based in Cal-

ifornia. CCAR member organizations quantified

their emissions using a detailed protocol that was

designed to ensure consistent, reproducible, and

accurate emissions quantification. These organi-

zations then submitted information on their an-

nual emissions to the Registry using a designated

online tool and had their emissions data verified

by an accredited third-party auditor.

Around the time that CCAR was being estab-

lished, California was beginning to develop its

landmark GHG reduction legislation, Assembly

Bill 32 (AB32). At the time, little detail was avail-

able on how corporate GHG emissions would be

regulated (in fact, these details are only now be-

coming apparent as a result of the state’s cap-and-

first step in managing them) has also increased.

This is translating into suppliers being asked

to quantify and report their GHG emissions to

brand owners and other customers. As a result,

companies that had not previously experienced

drivers to report (for example, because they are

privately owned or are too small to receive the

CDP questionnaire) are now being asked by their

customers to disclose information about their

GHG emissions.

■■ Supply-Chain Reporting Programs Industry organizations have been quick to

establish programs for supply-chain GHG re-

porting. These indus-

try groups, having

learned from past ex-

perience managing

environmental issues

throughout the sup-

ply chain, are seeking

to reduce the burden

that customer requests

place on resource-con-

strained suppliers, while also promoting consis-

tency in reporting approaches.

For example, the US-led Electronic Indus-

try Citizenship Coalition (EICC) has developed

a supply-chain GHG reporting program that

streamlines requirements for organizations that

supply EICC member companies (www.eicc.info).

Under this program, suppliers can use one ques-

tionnaire to satisfy the GHG data demands of

multiple EICC customers. Supplier responses to

the EICC questionnaire are not made public but

are made available to EICC members.

The CDP supply-chain reporting program

brings together a group of top-tier brand names

that have committed to engaging with their sup-

ply chains on GHG management. Each company

selects a subset of its suppliers, and the CDP then

sends questionnaires to these suppliers on its

The CDP supply-chain reporting program brings together a group of top-tier brand names that have committed to engaging with their supply chains on GHG management.


companies may have joined Climate Leaders

in part to gain experience with GHG reporting

protocols, in anticipation of potential future

mandatory reporting requirements.

US EPA has announced that it will be phasing

out the Climate Leaders program in 2011 in order

to focus its attention more fully on the regulatory

aspects of GHG emissions reporting and man-

agement. Many Climate Leaders member com-

panies have voiced their disappointment about

the demise of the pro-

gram, which provided

them with technical

assistance and helped

them maintain senior

management support

for GHG-reduction ef-

forts (participation in

the program required

companies to set a

GHG-reduction goal).

■■ Continued Importance of Voluntary Initiatives Organizations that participate in programs

such as the CDP, The Climate Registry, and

Climate Leaders are often large companies with

extensive operations and significant carbon foot-

prints. However, these companies will not nec-

essarily fall within the scope of the mandatory

reporting rules that are now in place (both in

California and nationally) because their direct, or

Scope 1, emissions at the individual site level fall

below the threshold for reporting. Thus, volun-

tary programs will continue to be a vital means

for engaging these businesses in GHG account-

ing, reporting, and reduction activities.

Business Development StrategyAs public awareness of and concern about

environmental sustainability rises, companies in

sectors from software to oil and gas are expand-

trade rulemaking). Nonetheless, the California

Air Resources Board (CARB) committed to defin-

ing ways in which organizations could receive

“early action” credit for emissions reductions

made before the AB32 requirements came into

force. CCAR encouraged companies to establish

an official GHG emissions baseline, which could

potentially be meaningful in the context of an

early-action credit program.

Some companies considered membership of

CCAR to be of potential value in anticipating

and preparing for the AB32 legislation. They

recognized that CCAR could give them early ex-

perience in quantifying GHG emissions, which

would help prepare them for the mandatory

reporting that was expected (and that has now

been introduced in California). It would also

give them access to information about AB32 de-

velopments, as well as positioning them to take

advantage of any early-action credit program that

might become available.

In 2008, CCAR was essentially replaced by

The Climate Registry (TCR), which brings to-

gether states, provinces, territories, and Native

Sovereign Nations from across the United States,

Canada, and Mexico. TCR provides a reporting

program similar to that offered by CCAR but with

a much more extensive geographic footprint.

■■ Climate Leaders Program Another voluntary GHG reporting initiative

that has been immensely popular is the United

States Environmental Protection Agency (US

EPA) Climate Leaders program (www.epa.gov

/climateleaders). This program was quite suc-

cessful in attracting participants—in large part

because of the involvement of US EPA, which

will be charged with administering any com-

prehensive federal GHG reduction legislation in

the United States, and which oversees the new

national Mandatory Reporting Rule for GHG

emissions. As was the case with CCAR, many

As was the case with CCAR, many companies may have joined

Climate Leaders in part to gain experience with GHG reporting

protocols, in anticipation of potential future mandatory

reporting requirements.


companies are choosing to participate in one or

more voluntary programs, often in addition to in-

cluding GHG emissions as a component of their

own corporate sustainability reporting.

As part of these programs, companies can

respond directly to stakeholder requests for GHG

information (for example, through the CDP or

the EICC supply-chain initiative). Participation

can offer companies a number of other benefits

as well. Depending on the program, these ben-

efits may include technical advice, third-party

verification audits (which can increase confi-

dence in the accuracy of emissions data), and

external communications carried out by both

the company and the program on behalf of its

members (which can create reputational ben-

efits). Programs that require their members to set

and report progress toward GHG reduction goals

also help to keep companies accountable for their

GHG reduction efforts.

Exhibit 3 summarizes information on a

range of corporate GHG programs that are either

led from the United States or open to participa-

tion by US companies. Organizations that are

evaluating the various programs for potential

participation should consider a range of ques-

tions, such as:

• Has the company been explicitly asked to

participate in a program by one or more

stakeholders?

• What would be the level of effort involved in

participating in the different programs?

• What characteristics make certain programs

either attractive (e.g., availability of technical

assistance) or impractical (e.g., high cost or

requirement that member companies must be

over a certain size)?

• Would participation in a particular program

facilitate participation in additional pro-

grams? For example, suppliers who already

report to the CDP do not need to provide

ing their product and service offerings to help

their customers address sustainability challenges.

There is recognition among such companies that

their marketing efforts can only be credible if

they “practice what they preach.”

Even companies that have a relatively small

direct carbon footprint (when compared with

the wider influence they can have through their

products) are investing in quantifying, manag-

ing, and reporting their direct emissions. This

helps the company develop a credible platform

for encouraging its customers to engage in GHG

management—and ultimately to purchase the

company’s products and services.

Internal opera-

tions can also provide

the perfect environ-

ment for companies

to test (and then pub-

licize) the GHG ben-

efits of their products

and services. Cisco

Systems provides a

great example of this.

As part of its marketing message, Cisco is

strongly advocating the GHG reduction benefits

of products like TelePresence, which can help

companies avoid air travel. In its 2010 corporate

social responsibility report, Cisco noted the re-

ductions it has seen in its actual air travel emis-

sions, compared to how emissions might have

increased if it had not rolled out TelePresence

(and its other collaborative working technolo-

gies) in 2007 and 2008.

Voluntary GHG Reporting Programs It is not necessary for companies to partici-

pate in third-party voluntary reporting programs

in order to externally report their GHG emissions.

They can do so by other means—for example, on

their corporate websites and in annual sustain-

ability reports. However, a growing number of

It is not necessary for companies to participate in third-party voluntary reporting programs in order to externally report their GHG emissions. They can do so by other means.


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n-na

ire.

Rep

orte

r S

ervi

ces

Mem

-be

rshi

p co

sts

$12,

000

per

year

(in

crea

sing

by

20%

afte

r N

o-ve

mbe

r 20

10).

The

CD

P S

uppl

y C

hain

pro

gram

has

ov

er 5

0 co

rpor

ate

mem

bers

.

In 2

010,

55

mem

ber

com

pani

es r

each

ed

out

to 1

,853

of

thei

r su

pplie

rs,

and

1,00

0 (5

4%)

resp

onde

d to

th

e re

ques

t. F

ifty-

nine

(3%

) fo

rmal

ly

decl

ined

to

part

ici-

pate

, an

d 79

4 (4

3%)

did

not

resp

ond

or f

aile

d to

sub

mit

com

plet

e re

spon

ses.

http

s://w

ww

.c

dpro

ject

.n

et/e

n-U

S

/Pro

gram

mes

/P

ages

/CD

P-

Sup

ply-

Cha

in

.asp

x

CE

RE

SC

ompa

-ni

es

CE

RE

S is

he

adqu

ar-

tere

d in

th

e U

nite

d S

tate

s bu

t ha

s gl

obal

ap

plic

abil-

ity

Ful

l ran

ge o

f su

stai

nabi

lity

issu

es.

Not

lim

ited

to c

limat

e ch

ange

/G

HG

em

issi

ons.

Req

uire

men

ts t

o be

com

e a

CE

RE

S c

ompa

ny:

Exe

cutiv

e-le

vel c

omm

itmen

t to

im

prov

e en

viro

nmen

tal a

nd s

ocia

l pe

rfor

man

ce u

sing

the

CE

RE

S

Prin

cipl

es a

s a

star

ting

poin

t.

Pub

lic d

iscl

osur

e of

this

com

mit-

men

t by

repo

rting

on

obje

ctiv

es,

targ

ets,

and

per

form

ance

in a

sus

-ta

inab

ility

rep

ort,

Glo

bal R

epor

ting

Initi

ativ

e re

port,

ann

ual r

epor

t, en

vi-

ronm

ent,

and/

or c

omm

unity

rep

ort.

CE

RE

S a

nd c

oalit

ion

enga

gem

ent

in t

he d

evel

opm

ent

and

revi

ew o

f th

is r

epor

ting.

Ong

oing

sta

keho

lder

eng

age-

men

t an

d re

spon

se t

o in

put

from

st

akeh

olde

rs,

whi

ch is

con

side

red

in a

nd in

tegr

ated

into

com

pany

ac

tions

.

Con

tinuo

us im

prov

emen

t of

bot

h pe

rfor

man

ce a

nd r

epor

ting

on

sust

aina

bilit

y is

sues

.

Sta

keho

lder

tea

m

supp

ort

on r

epor

ting,

in

clud

ing

repo

rt d

evel

op-

men

t ad

vice

and

rep

ort

revi

ew b

y C

ER

ES

sta

ff an

d co

aliti

on m

embe

rs.

Com

mun

icat

ions

ser

vice

(c

ompa

ny li

nk o

n C

ER

ES

w

ebsi

te;

elec

tron

ic n

ews-

lette

r; p

ress

ref

erra

ls).

P

artic

ipat

ion

at C

ER

ES

bo

ard

mee

tings

. P

artic

i-pa

tion

at C

ER

ES

ann

ual

conf

eren

ce a

nd o

ther

C

ER

ES

eve

nts,

incl

ud-

ing

early

not

ifica

tion

and

oppo

rtun

ity t

o pa

rtic

ipat

e an

d sp

onso

r ke

y ev

ents

.

No,

but

CE

RE

S

com

plet

es a

re

view

of

mem

-be

r-co

mpa

ny

sust

aina

bilit

y re

port

s.

$2,0

00–$

40,0

00,

depe

ndin

g on

co

mpa

ny r

ev-

enue

s

Ove

r 70

mem

bers

, w

ith c

ompa

nies

rep

-re

sent

ing

a ra

nge

of

sect

ors

and

incl

ud-

ing

US

-hea

dqua

r-te

red,

as

wel

l as

othe

r, c

ompa

nies

.

http

://w

ww

.c

eres

.org

/Pag

e .a

spx?

pid=

426

#lis

t


Exhi

bit 3

. Cor

pora

te G

HG P

rogr

ams

(con

tinue

d)

Initi

ativ

eGe

ogra

phic

Sc

ope

Key

Feat

ures

/Req

uire

men

tsSe

rvic

es P

rovi

ded

to

Mem

bers

Third

-Par

ty A

udit/

Verif

icat

ion?

Cost

Info

rmat

ion

Abou

t Cu

rren

t Mem

bers

hip

Web

site

Clin

ton

Clim

ate

Initi

ativ

e (C

CI)

US

-led

(glo

bal

appl

ica-

tion)

The

CC

I is

a n

ongo

vern

men

tal

orga

niza

tion

(NG

O)

that

aim

s to

he

lp g

over

nmen

ts t

urn

pled

ges

to r

educ

e G

HG

em

issi

ons

into

ac

tion

thro

ugh

repl

icab

le a

nd

scal

able

pro

ject

s.

Thi

s ap

proa

ch

dem

onst

rate

s ho

w t

arge

ts c

an b

e m

et in

pra

ctic

e, in

form

ing

furt

her

polic

y de

cisi

ons

and

com

pres

sing

th

e tim

e fr

ame

for

achi

evin

g re

al

emis

sion

s re

duct

ions

. T

he p

eopl

e w

orki

ng a

t C

CI

prim

arily

com

e fr

om t

he in

tern

atio

nal b

usin

ess

com

mun

ity.

CC

I ha

s th

ree

pri-

mar

y pr

ogra

m a

reas

: ci

ties,

cle

an

ener

gy,

and

fore

sts.

CC

I re

lies

larg

ely

on f

inan

cial

don

atio

ns a

nd

volu

ntee

rs.

No

No

No

mem

ber-

ship

as

such

.

Com

pani

es c

an

mak

e fin

anci

al

dona

tions

and

ca

n al

so p

rovi

de

hum

an r

esou

rces

an

d ex

pert

ise

to

the

CC

I th

roug

h th

eir

corp

orat

e em

ploy

ee v

olun

-te

er p

rogr

ams.

N/A

http

://w

ww

.c

linto

nfou

n da

tion.

org

/wha

t-w

e-do

/c

linto

n-cl

imat

e -in

itiat

ive/

Com

bat

Clim

ate

Cha

nge

(3C

)

Initi

ativ

e

Glo

bal

(coo

r-di

nate

d th

roug

h a

smal

l sec

-re

taria

t ho

sted

by

Sw

edis

h en

ergy

co

mpa

ny

Vat

tenf

all)

3C is

a b

usin

ess

lead

ers’

initi

a-tiv

e. T

he m

ain

obje

ctiv

e is

to

sup-

port

the

Uni

ted

Nat

ions

Fra

me-

wor

k C

onve

ntio

n on

Clim

ate

Cha

nge–

led

nego

tiatio

n pr

oces

s to

est

ablis

h a

new

glo

bal a

gree

-m

ent

on c

limat

e ch

ange

, an

d to

m

obili

ze c

ompa

nies

and

bus

i-ne

ss le

ader

s ac

ross

the

wor

ld t

o co

ntrib

ute

know

ledg

e, r

esou

rces

, an

d le

ader

ship

to

this

com

mon

go

al.

The

initi

ativ

e in

volv

es p

o-lit

ical

and

bus

ines

s ou

trea

ch

(par

ticul

arly

with

bus

ines

ses

in

deve

lopi

ng e

cono

mie

s),

and

col-

labo

ratio

n w

ith o

rgan

izat

ions

suc

h as

the

Wor

ld B

usin

ess

Cou

ncil

for

Sus

tain

able

Dev

elop

men

t, W

orld

E

cono

mic

For

um,

and

UN

Glo

bal

Com

pact

.

The

sig

nato

ry c

ompa

nies

of

the

3C I

nitia

tive

are

expe

cted

to

play

a

proa

ctiv

e ro

le a

nd t

o m

ake

thei

r kn

owle

dge

and

expe

rienc

e av

aila

ble

in o

rder

to

expe

dite

the

co

nclu

sion

and

agr

eem

ent

of a

gl

obal

pol

icy

fram

ewor

k re

quire

d to

com

bat

clim

ate

chan

ge.

The

re is

a m

embe

r co

m-

mun

ity z

one

on t

he 3

C

web

site

.

No

TB

DT

he 3

C in

itiat

ive

is

endo

rsed

by

the

top

exec

utiv

es o

f 66

of

the

wor

ld’s

larg

-es

t co

rpor

atio

ns.

US

-hea

dqua

rter

ed

mem

bers

incl

ude

Hew

lett-

Pac

kard

, C

itigr

oup,

Duk

e E

nerg

y, D

ell,

and

PG

&E

.

http

://w

ww

.c

omba

tclim

ate

chan

ge.o

rg

/ww

w/c

cc_o

rg

/ccc

_org

/224

54

6hom

e/72

02

82th

ex3/

inde

x .js

p


Exhi

bit 3

. Cor

pora

te G

HG P

rogr

ams

(con

tinue

d)

Initi

ativ

eGe

ogra

phic

Sc

ope

Key

Feat

ures

/Req

uire

men

tsSe

rvic

es P

rovi

ded

to

Mem

bers

Third

-Par

ty A

udit/

Verif

icat

ion?

Cost

Info

rmat

ion

Abou

t Cu

rren

t Mem

bers

hip

Web

site

EIC

C C

arbo

n R

epor

ting

Sys

tem

US

-led

with

gl

obal

ap-

plic

abili

ty

The

Ele

ctro

nics

Ind

ustr

y C

itize

n-sh

ip C

oalit

ion

(EIC

C)

is a

n al

lianc

e of

glo

bal e

lect

roni

cs f

irms

wor

king

to

geth

er t

o im

prov

e ef

ficie

ncy

and

soci

al r

espo

nsib

ility

in t

he g

loba

l su

pply

cha

in.

The

EIC

C’s

onl

ine

carb

on r

epor

ting

syst

em a

llow

s co

mpa

nies

in t

he e

lect

roni

cs in

-du

stry

to

calc

ulat

e th

eir

GH

G e

mis

-si

ons

and

shar

e th

e da

ta w

ith o

ther

co

mpa

nies

in t

he in

dust

ry.

The

sys

tem

was

dev

elop

ed t

o im

-pr

ove

mea

sure

men

t an

d in

crea

se

unde

rsta

ndin

g of

GH

G e

mis

sion

s ac

ross

the

ele

ctro

nics

indu

stry

su

pply

cha

in.

The

EIC

C s

yste

m

colle

cts

and

trac

ks t

he e

mis

sion

s of

dire

ct s

uppl

iers

to

part

icip

atin

g co

mpa

nies

and

pro

vide

s gu

idan

ce

for

estim

atin

g th

e al

loca

tion

of

emis

sion

s to

clie

nts.

Thi

rd-p

arty

adm

inis

trat

or

cont

acts

sup

plie

rs a

nd

requ

ests

tim

ely

com

ple-

tion

of t

he E

ICC

que

s-tio

nnai

re.

The

adm

inis

-tr

ator

dis

trib

utes

sup

plie

r da

ta/r

espo

nses

to

all

part

icip

atin

g co

mpa

nies

to

who

m t

he s

uppl

ier

is a

ve

ndor

.

Gui

danc

e on

use

of

the

carb

on r

epor

ting

syst

em

is p

rovi

ded

to r

epor

ting

com

pani

es.

No,

but

rep

ort-

ing

com

pani

es

get

extr

a cr

edit

for

a th

ird-p

arty

re

view

of

thei

r em

issi

ons

data

.

Fre

e fo

r E

ICC

m

embe

rs.

Non

-EIC

m

embe

rs c

an

subs

crib

e to

th

e C

arbo

n R

epor

ting

Sys

tem

for

$5

,000

per

ye

ar.

Ove

r 40

glo

bal

elec

tron

ics

firm

s ar

e m

embe

rs o

f th

e E

ICC

. A

ny m

embe

r of

the

ele

ctro

nics

in-

dust

ry is

abl

e to

use

th

e E

ICC

Car

bon

Rep

ortin

g sy

stem

to

calc

ulat

e its

GH

G

emis

sion

s an

d/or

su

rvey

up

to 1

00

supp

liers

(no

nmem

-be

rs o

f th

e E

ICC

pa

y a

fee)

.

http

://w

ww

.e

icc.

info

/

http

://w

ww

.bsr

.o

rg/r

epor

ts

/BS

R_E

ICC

_A

_Pra

ctic

al

_App

roac

h_to

_G

reen

ing_

the

_Ele

ctro

nics

_S

uppl

y_C

hain

.p

df

Pew

Cen

ter

on G

loba

l C

limat

e C

hang

e—B

usin

ess

Env

ironm

en-

tal L

eade

r-sh

ip C

ounc

il (B

ELC

)

Com

pa-

nies

with

U

S o

pera

-tio

ns

BE

LC m

embe

rs s

ign

up t

o a

set

of p

rinci

ples

, in

clud

ing

agre

emen

t on

the

sci

entif

ic c

onse

nsus

tha

t cl

i-m

ate

chan

ge is

hap

peni

ng a

nd t

hat

dela

ying

act

ion

will

incr

ease

ris

ks

and

cost

s; t

hat

busi

ness

es c

an

and

shou

ld in

corp

orat

e re

spon

ses

to c

limat

e ch

ange

into

the

ir co

re

corp

orat

e st

rate

gies

by

taki

ng c

on-

cret

e st

eps

to e

stab

lish

and

mee

t G

HG

em

issi

on r

educ

tion

targ

ets;

th

at t

he U

S s

houl

d si

gnifi

cant

ly

redu

ce it

s G

HG

em

issi

ons

thro

ugh

econ

omyw

ide,

man

dato

ry a

p-pr

oach

es;

and

that

com

plem

enta

ry

polic

ies

may

als

o be

nec

essa

ry f

or

spec

ific

sect

ors

to h

elp

driv

e tr

ansi

-tio

n to

a lo

w-c

arbo

n ec

onom

y.

Mem

bers

typ

ical

ly h

ave

reve

nues

of

$5

to $

10 b

illio

n an

d ar

e le

ader

s in

the

ir se

ctor

. M

embe

rshi

p is

by

invi

tatio

n on

ly.

Alth

ough

in a

bit

of

a hi

atus

with

res

pect

to

new

mem

-be

rs,

BE

LC is

will

ing

to t

alk

with

in

tere

sted

com

pani

es.

Pew

Cen

ter

rese

arch

w

ork,

incl

udin

g ab

ility

to

pro

vide

inpu

t on

Pew

C

ente

r do

cum

ents

prio

r to

pub

licat

ion.

The

Pew

C

ente

r ho

sts

thre

e or

fo

ur m

eetin

gs e

ach

year

fo

r B

ELC

mem

bers

to

disc

uss

polic

y an

d ot

her

GH

G is

sues

and

sha

re

best

pra

ctic

es.

No.

The

web

-si

te t

rack

ing

of

goal

s is

sel

f-re

port

ed b

y co

mpa

nies

.

The

Pew

C

ente

r ta

kes

no d

ues

from

BE

LC

mem

bers

and

re

ceiv

es n

o ge

nera

l sup

-po

rt f

undi

ng

from

cor

pora

-tio

ns.

BE

LC in

clud

es

mai

nly

For

tune

500

co

mpa

nies

rep

re-

sent

ing

a di

vers

e gr

oup

of in

dust

ries,

in

clud

ing

ener

gy,

auto

mob

iles,

man

u-fa

ctur

ing,

che

mic

als,

ph

arm

aceu

tical

s,

met

als,

min

ing,

pa

per

and

fore

st

prod

ucts

, co

nsum

er

good

s an

d ap

pli-

ance

s, t

elec

om-

mun

icat

ions

, an

d hi

gh t

echn

olog

y.

As

of J

uly

2010

, th

ere

wer

e 46

mem

ber

com

pani

es.

http

://w

ww

.p

ewcl

imat

e .o

rg/c

ompa

nies

_l

eadi

ng_t

he

_way

_bel

c


Exhi

bit 3

. Cor

pora

te G

HG P

rogr

ams

(con

tinue

d)

Initi

ativ

eGe

ogra

phic

Sc

ope

Key

Feat

ures

/Req

uire

men

tsSe

rvic

es P

rovi

ded

to

Mem

bers

Third

-Par

ty A

udit/

Verif

icat

ion?

Cost

Info

rmat

ion

Abou

t Cu

rren

t Mem

bers

hip

Web

site

The

Clim

ate

Reg

istr

y (T

CR

)

Uni

ted

Sta

tes,

C

anad

a,

Mex

ico

(indi

vidu

al

stat

es a

nd

prov

ince

s sp

on-

sor

the

prog

ram

).

Com

pa-

nies

can

re

port

N

orth

A

mer

ican

an

d/or

gl

obal

em

issi

ons.

Bas

ic m

embe

rshi

p: A

cces

s to

the

Reg

istr

y’s

tool

s, e

xper

tise,

and

lead

ersh

ip c

omm

unity

. T

hird

-par

ty v

erifi

catio

n an

d pu

blic

rep

ortin

g ar

e no

t re

quire

d, b

ut e

ncou

rage

d.

Clim

ate

Reg

iste

redT

M m

embe

rshi

p: A

nnua

l re

port

ing

of U

S o

r gl

obal

em

issi

ons

in li

ne

with

TC

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Choices for Participants in Climate Leaders Companies that participate in US EPA’s Cli-

mate Leaders initiative must consider other op-

tions now that the program is being phased out.

For many, deciding what path to take will not

be straightforward, given the number and range

of voluntary programs operating in the United

States. US EPA has announced an intention to

partner with one or more organizations to co-

sponsor a national awards program recognizing

corporate leadership on climate change.

The Evolution of GHG Reporting

■■ Emphasis on Performance ImprovementIt is clear that voluntary programs are evolv-

ing to focus not only on disclosure, but also on

performance. The CDP and The Climate Registry

(www.theclimateregistry.org) provide good ex-

amples of this.

Before 2010, companies responding to the

CDP were issued a disclosure score based on

the quality and completeness of their informa-

tion. In 2010, the CDP introduced a separate

performance score that assesses companies on

their commitment to (and achievement of) per-

formance improvement in relation to climate

change. The new performance score considers as-

pects such as integration of climate change risks

and opportunities into overall business strategy,

achievement of emission reductions, board-level

oversight for climate change performance, exis-

tence of staff monetary incentives for improved

climate change performance, and verification

of emissions data. Companies with the highest

performance scores are included in a new Carbon

Performance Leadership Index.

The Climate Registry has incorporated a

number of different membership levels that

reflect variations in the extent to which mem-

ber companies measure and reduce their emis-

sions. Basic membership requires companies to

additional data in order to meet the require-

ments for the EICC supply-chain carbon-

reporting program.

• What is the membership profile of the various

programs? For example, to date The Climate

Registry has been particularly popular with

public entities (such as government agen-

cies) and with the mining, oil, and gas sector,

while the Business Environmental Leadership

Council (sponsored by the Pew Center for

Climate Change) comprises mainly Fortune

500 companies.

• Is the company seeking to directly influ-

ence (or conversely, to

actively avoid being

involved in) GHG

policymaking? Cer-

tain programs, such

as Combat Climate

Change (3C) and the

US Climate Action

Partnership, have clear

policy-led agendas.

The Future of Voluntary ReportingIn the United States, the federal and state-

level mandatory GHG reporting rules that have

been adopted over the last few years will not

serve as a replacement for voluntary GHG report-

ing. The mandatory requirements focus on Scope

1 emission sources only and are applied at the

individual-facility level—meaning they do not

provide the type of information generally sought

by nonregulatory stakeholders, who typically

are interested in the total emissions profile of a

company. Moreover, many business sectors are

not covered by the rules, even though they are

subject to other strong drivers that encourage

reporting of their GHG emissions. Thus, volun-

tary reporting will continue to play a key role

in future GHG accounting, management, and

reporting practice.

US EPA has announced an intention to partner with one or more organizations to co-sponsor a national awards program recognizing corporate leadership on climate change.


These emissions are considered to be “indi-

rect,” as companies do not have direct control

over the activities that give rise to them. None-

theless, companies are being encouraged to ac-

count for Scope 3 emissions. The new draft World

Resources Institute/World Business Council for

Sustainable Development standard on Scope 3

emissions and the EICC and CDP supply-chain

initiatives offer good examples of this trend. The

Climate Leaders initiative was also planning to

place more emphasis on Scope 3 emissions re-

porting before US EPA decided to phase out the

program.

What can be expected as a result of these de-

velopments is more collaboration among com-

panies to gain a better collective understanding

of GHG emissions arising within and across

value chains. This will be an important step

toward targeting and realizing meaningful GHG

reductions.

Concluding ThoughtsRegardless of their sector, all but the small-

est companies are likely to face drivers for ex-

ternally reporting their GHG emissions in the

not-too-distant future. Companies that have

not yet dipped their toe in the GHG reporting

quantify their emissions but does not mandate

third-party verification or public reporting of

data. Climate RegisteredTM membership requires

quantification of emissions, third-party verifica-

tion, and public reporting. Climate Registered

member companies may seek recognition for

their emissions reduction programs through the

Registry’s silver, gold, and platinum levels, as

described in Exhibit 4.

These developments in two of the key GHG

reporting programs signal an intention to drive

not only increased transparency, but also mean-

ingful actions by companies to realize GHG emis-

sions reductions and derive strategic business

value (for example, through product/service in-

novations that address climate change risks and

opportunities).

■■ Inclusion of Scope 3 EmissionsAnother way GHG reporting is evolving is

through an expansion of reporting boundaries

to include Scope 3 emission sources. As discussed

earlier in this article, Scope 3 emissions arise

from a multitude of different sources, including

(but by no means limited to) business travel, em-

ployee commuting, contract manufacturing, and

product transport.

Exhibit 4. The Climate Registry: Options for Climate Registered™ Members

Silver Gold PlatinumMember must have a public GHG man-agement and reduction plan in place that includes:

• An absolute GHG emission reduction goal for Scope 1 and Scope 2 emissions.

• A target base year and the expected time-line to achieve the target.

• Demonstration of 5+ best practices

Member must meet all Climate Regis-tered™ Silver requirements. Plus member must demonstrate an absolute 5-percent reduction in Scope 1 and Scope 2 emis-sions in its total, entitywide North Ameri-can or global footprint against a target base year (a portion of Scope 2 reductions may be met through purchase of renew-able energy certificates, or RECs). Com-panies subject to mandatory requirements must demonstrate—through the imple-mentation of best practices or additional reductions—that they are going above and beyond mandatory requirements to reduce their emissions.

Member must meet all Climate Registered™ Gold requirements. Plus member must demonstrate an absolute 20-percent reduc-tion in Scope 1 and 2 emissions in its North American or global footprint against a target base year (a portion of Scope 2 reductions may be met through purchase of RECs). Up to 49 percent of the reduction can be met with regulatory-approved offsets. Com-panies subject to mandatory requirements must demonstrate—through the imple-mentation of best practices or additional reductions—that they are going above and beyond mandatory requirements to reduce their emissions.

water should consider preparing themselves for

the inevitable.

Companies can begin by measuring and inter-

nally reporting their GHG emissions. They can then

move on to evaluating the specific drivers they face

for external reporting, and considering the various

means available for them to report externally.

The take-home message: Nonregulatory GHG

emissions reporting is here to stay.

Notes

1. Scope 1, 2, and 3 emissions are defined in the GHG Protocol (www.ghgprotocol.org).

2. The two new standards are The Corporate Value Chain (Scope 3) Accounting and Reporting Standard and The Prod-uct Accounting and Reporting Standard.

3. For more information on quantifying GHG emissions throughout a product’s life cycle, see Kral, C., Huisenga, M., & Lockwood, D. (2009, Winter). Product carbon footprinting: Improving environmental performance and manufacturing efficiency. Environment Quality Management, 19(2), 13–20.


Emma Armstrong is a senior project director with WSP Environment and Energy’s US Sustainability and Energy practice. She has 14 years of experience in environmental and sustainability consultancy and was manager of WSP’s UK environ-mental management system (EMS) team for four years before her relocation to the United States in 2005. Armstrong has significant experience in the provision of sustainability strategy and management system development, implementation and audit support, and training delivery, including projects delivered in the United States, United Kingdom, Namibia, South Africa, Ireland, Germany, and Holland. She has delivered over 40 environmental training courses, including Institute of Environmental Management and Assessment–accredited EMS implementation and auditor courses. Armstrong also has extensive experience in sustainability and greenhouse gas emissions data management and reporting. She assists clients in a range of sectors to participate in voluntary GHG reporting schemes, including the CDP, US EPA Climate Leaders, and Climate Registry programs.

voluntary greenhouse gas reporting

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