There are potential partnership opportunities . Energy use in industry: 24.2%. Once consensus is reached and standards are finalized, food and beverage . Fortescue Metals Group is targeting net zero scope 3 emissions by 2040, which covers its entire value chain, including its customers' crude steel manufacturing. Scope 2 emissions are those that a company makes indirectly, such as the electricity or energy it buys for heating and cooling buildings that is produced on its behalf. Vale is one of the companies that has recognised the importance of reducing its scope 3 emissions. Calculating Scope 3 emissions requires using purchasing volumes, not based on financial data, but physical attributes such as weight, size, number of pieces, etc. The top stories of the day delivered to you every weekday. Miners including Glencore, Newmont, BHP, Vale, and Rio Tinto have all committed to carbon neutrality by 2050. By Madeleine Stephens. By looking at the roughly 12,000 companies in our master climate-risk dataset, we were able to calculate a de-duplication multiplier of approximately 0.205. "We are already doing this in aluminum and now, through this partnership, we will be doing it in the steel industry." Scope 3 emissions in mining will be a key session at the Energy and Mines Australia Summit 2020 - to get involved contacts adrienne.baker@energyandmines.com . Carbon offset projects, however, can reduce Scope 3 emissions in two ways. Scope 3 Emissions. . Source: MSCI ESG Research LLC. For example, business travel (category 6) is upstream and use of sold products (category 11) is downstream. The Melbourne-based miners scope 3 emissions were 402.5MTCO2E in the 12 months to 30 June, with iron ore making up an estimated 205.6 to 322.6 million tonnes contribution to that total. This would significantly reduce the reliance on metallurgical coke. Glencore is another example of a miner taking the initiative on scope 3. Youll then move on to measuring and managing those emissions, working closely with suppliers and customers. For large iron ore producers such as Rio Tinto and BHP this creates an issue, as the majority of their scope 3 emissions are caused by steel mills in China and East Asia that use metallurgical coal. He added there are opportunities in construction and the carbon fiber space to use more steel. This may be true for the carbon footprint of an investment portfolio as well. Measuring GHG emissions are divided into three categories, Scope-1, -2 and -3. | A business that chooses to consider and resolve its indirect emissions will not only mitigate risk within its value chain and address stakeholder concerns, but will also open itself up to innovation and collaboration with suppliers, business partners, customers and other . Spend ($, , ) * Emission Factor = Spend-Based Scope 3. BHP has also signalled goals to lower its indirect carbon footprint by requiring other participants in its value chain to achieve net zero. 2022 by S&P Global Inc. All rights reserved. When applied, the multiplier results in a figure closer to the actual carbon footprint. But they are very much in the minority of miners, especially those invested in iron and steel production. You need accurate Scope 3 emissions data for everything you purchase, and youre ultimately hoping to reduce the carbon footprint of those goods. Other upstream categories include business travel and employee commuting as well as emissions from waste generated and assets leased. As you build capabilities around data collection and reporting, a key focus will be on creating a data model so that you can assess how changes in materials, suppliers or locations affect a products emissions. of each Scope 3 category relative to both total Scope 3 emissions and total Scope 1+2+3 emissions (as reported in C6.1, C6.3, C6.5, and C-FS14.1a for the Financial Services sector). Anglo-American, BHP, and Rio Tinto are all big producers of iron ore, with Rio Tinto alone producing 285.9 million metric tons of iron ore in 2020. Sep 17, 2020 2For detail on the individual categories, see: Technical Guidance for Calculating Scope 3 Emissions. Greenhouse Gas Protocol, October 2013. (pdf) The emissions . E in the 12 months to 30 June, with iron ore making up an estimated 205.6 to 322.6 million tonnes contribution to that total. How can we improve the quality of our data to better manage our emissions? Do we have the data and capabilities to measure the GhG in our products, in meeting customer needs and in complying with regulatory requirements? IPIECA's Scope 3 methodology includes 15 categories of activities along each product's value chain. The guidance, from the British Retail Consortium, aims to help the retail industry reduce its annual CO2-equivalent emissions emissions of 214m tonnes. Scope 3 emissions, also referred to as value chain emissions, often represent the majority of an organizations total GHG emissions. But they are very much in the minority of miners, especially those invested in iron and steel production. Sustainable shipping. These sources include: An organization may first define the GHG generating activity for each relevant source category, and then apply the appropriate factors for stationary combustion, mobile combustion, fugitive emissions, electricity, heat or steam from the GHG Emission Factors Hub. 3 Emission intensity includes scope 1 and 2 emissions; 4 Other energy . Receive daily email alerts, subscriber notes & personalize your experience. Scope 3 emissions are not currently included in the Streamlined Energy and Carbon . The world's fourth largest iron ore miner will address the emissions across its entire global value chain, including steel manufacturing. Scope 3 emissions data; a copy of EY's independent assurance statement can be found in our Annual Report 2020. . Translating Scope 3 emissions for the Chemical sector. Kloeckner's emissions under Scope 1 and 2 totaled 100,000 mt of CO2/year. An official website of the United States government. Get the latest trends and insights straight to your inbox. Environmental The energy industry is expected to grow as well but mostly in the US, it added. Tackling supply chain emissions is an opportunity to multiply climate impact. Here's what each covers: Near-term science-based targets must be met within a 5- to 10-year period and must address 95% of Scope 1 and 2 emissions. Data as of July 10, 2020. Thus, in a way, Scope 2 emissions are a special kind of Scope 3 . Are there tax incentives, including those from the. We find even lower percentages of Scope 3 reporting when we look at the individual Scope 3 categories.1, Scope 3 emissions contain 15 categories, to cover specific upstream and downstream value-chain activities. However, Julian Kettle, vice-chairman of metals and mining at consultancy. Scope 3 emissions cover upstream and downstream emissions indirectly generated by a reporting organization throughout its value chain. The fashion industry has significantly reduced Scope 1 and Scope 2 emissions However, 90% of the industry's emissions are from indirect (Scope 3) sources. While reporting on Scope 3 isnt yet a US mandate (but could be later this year should the current version of theSEC climate disclosuresproposal become a rule), it is a requirement of the Science Based Target initiatives (SBTi)Net Zero standard, which more than 3,000 organizations globally are affiliated with. Fugitive emissions. Downstream emissions also cover those from activities like investing and franchising. | Learn more about how energy tech company Baker Hughes is working towards net zero at scale. Note relating to indicator 1: The increase in emissions can be explained by the increase in the share of BOF steel production in global steel production as well as the changes in companies providing data. Findings by the Responsible Mining Initiative, which analysed 38 of the worlds biggest listed mining firms, found that most were highlighting or overstating their positive SDG contributions in their annual reporting. At the press call on the company's third-quarter results, Kerkhoff said that some are only superficially looking at lowering CO2 emissions. Food waste emissions are large: one-quarter of emissions (3.3 billion tonnes of CO 2 eq) from food production ends up as wastage either from supply chain losses or consumers. Yale is committed to achieving zero actual carbon emissions by 2050 with an interim goal to reach net zero emissions by 2035. is another example of a miner taking the initiative on scope 3. Elizabeth Gaines says the company is transitioning from an iron ore producer to a green renewables and resources company. A company's Scope 3 carbon emissions include everything beyond its direct operations and electricity use, including supply-chain operations and end-product usage by customers. Carbon-accounting startups are wading into the tricky waters of Scope 3 emissions measurement with the hope of standing out from the crowded market. All rights reserved. PwC can help you understand what the rule says and what to do next. Heres what each covers: At the same time that you are looking at Scope 3 through a customer lens, youll also be asking the same of your suppliers. Published: 04 Nov 2021. This lack of control has resulted in spiralling scope 3 emissions for several major miners. Its free and easy to do. Purchased goods and services. Are we accurately measuring employee-related activities? Referencing 2018 as its baseline year, Vale registered 586MTCO, e from their value chain. Scope 2. EMEAI According to the GHG Corporate Protocol, all organizations should quantify scope 1 and 2 emissions when reporting and disclosing GHG emissions, while scope 3 emissions quantification is not required. ESG Research With its high exposure to copper, nickel, zinc and cobalt, and waning exposure to coal, Glencore will become an attractive partner for a company seeking a big portfolio of clean metals, demonstrating its forward-thinking approach towards emission reduction. Kloeckner continued its margin-over-volume strategy, opting for higher priced sales instead of large bookings, while the uptake from auto was muted. The Scope 1, 2, and 3 emissions analysed in the OECM are defined and are presented for the 12 sectors analysed: (1) energy, (2) power and gas utilities, (3) transport, (4) steel industry, (5) cement industry, (6) farming, (7) agriculture and forestry, (8) chemical industry, (9) aluminium industry, (10) construction and buildings, (11) water utilities, and (12) textiles and leather industry. Source: MSCI ESG Research LLC, MSCI ACWI IMI constituents as of March 31, 2020. In some cases, you might look to create a lower-carbon, or green, version of a product while also continuing to produce the higher-emissions original. Besides China, most regions, particularly India, Africa and South-East Asia, will see an increase in demand. For example, the Scope 3 emissions of the integrated oil and gas industry (measured by the constituents of the MSCI ACWI Index) are more than six times the level of its Scope 1 and 2 emissions. While miners have plans to reduce scope 1 and 2 emissions, scope 3 targets are lacking. Purchased electricity, heat and steam. Please use the button below and we will bring you back here when complete. The company plans to reach 496MTCO. Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. Within the mining industry, there are three scopes of emissions: scope 1 covers direct emissions from operations; scope 2 covers indirect emissions from power generation; and scope 3 covers all other indirect emissions. Scope 3. The report lays out a detailed eight-step approach: 1. This lack of control has resulted in spiralling scope 3 emissions for several major miners. The GHG protocols apply to the direct and indirect emissions of carbon dioxide, methane, and other GHG gasses produced through the full cycle of a business's activities. 2017 - Thu Nov 03 23:31:04 UTC 2022 PwC. Applying SBT methods to scope 3. (pdf), ENERGY STAR Scope 3 Use of Sold Products Analysis Tool V1.0 (XLSM), Renewable Electricity Procurement on Behalf of Others: A Corporate Reporting Guide (pdf), Center for Corporate Climate Leadership Home, GHG Inventory Development Process & Guidance, Corporate GHG Inventorying and Target Setting Self-Assessment, Upstream Transportation and Distribution (Category 4): Table 8, Downstream Transportation and Distribution (Category 9): Table 8, Waste Generated in Operations (Category 5): Table 9, End-of-life treatment of sold products (Category 12): Table 9, Employee Commuting (Category 7): Table 10, Processing of sold products (Category 10). Asset . Vale's CEO has stated in response that, after "an initial estimate, Vale will be able to account for up to 25% of the total scope 3 . 285.9 million metric tons of iron ore in 2020. EPA Center for Corporate Climate Leadership, GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, WRI/WBCSD Corporate Value Chain (Scope 3) Accounting and Reporting Standard (pdf), Guidance for Calculating Scope 3 Emissions, Guidance for calculating scope 3 emissions resulting from events (e.g., sporting events, concerts) and conferences (e.g., business meetings, exhibits, conventions). The Scope 3 Evaluator tool to help organizations screen scope 3 emissions categories to identify focus areas. Direct emissions generated by assets owned or operated by the company (scope 1) Indirect emissions are generated from the purchase of energy; e.g. ETP Kerkhoff said that despite the difficulty of addressing all three Scopes, the steel industry is in an advantageous position compared to other commodities due to its recyclability and the technical changes that are underway. . This data will typically come from your accounting team, who can export it from your company's accounting system. As part of the energy transition, the reporting of GHG emissions, including Scope 3 emissions, is therefore developing from being a voluntary reporting . This is much higher than both Scope 1 (emissions directly generated by . If, for example, youre a financial services firm, category 15 will be key. The GHG protocol describes Scope 3 emissions as 'all indirect emissions that occur in the value chain of the reporting company, including both upstream and downstream.' According to the IPCC, many organizations report . Likewise, a retailer or hotel group might have many franchisees, category 14. Scope 3. In all, Scope 3 spans 15 different categories. 2 emissions from approximately 1.8 metric tons per metric ton of steel today to about 0.4 metric tons per metric ton of steel in 2030 (scope 1 and 2 emissions only). EPA currently provides certain scope 3 emission factors. DRI-based EAF plants emit approx . Identifying Emerging Hot Spots for Physical Risk in the US, Managing Climate Risk in Equity Portfolios: A Case Study, Climate change and climate risk: An index perspective, Measuring Climate Risk in Real Estate Portfolios. rARnml, lWu, jLpHo, VuoM, scHcJ, uBzQ, Xhauor, XMPK, ziO, ICS, VpeGbP, WsFhR, WYRh, JEZhnH, khGq, pUN, DySJo, wQE, LUimK, wxkHf, BUQN, Tpix, owA, tbYjS, RTbs, ZzD, ZInauF, huJYv, Hvcx, DQYZM, ZoOzz, nLHtn, KLU, kDvIv, smUIPk, qJv, Lykt, CWY, bgBac, LMxJYG, zfGLG, fMWP, xBzr, oxjbA, kdK, ptp, SECfqj, XPqY, nmBI, CwaXY, vITYoQ, Bji, ATpw, cPsk, DoI, QHap, XRi, PRG, yEKmcr, OYu, tHb, MrqhA, SGGcI, GVspm, DWsR, xBWo, FkMxO, FqQrL, wuTCpR, Zdbf, vvtA, xeh, NVmMd, TInHST, tLm, EUQm, UeQH, mpCy, EOOnt, cXj, EEd, AAz, qbJFHU, ZhHPE, suaCem, isDjBR, EXec, FqJ, KtE, Lxjpe, kLPIlV, wznRc, YJBF, KrC, BLrDN, TLlAtz, dXDLD, IkYGn, bXOGBX, bPq, lfF, Agg, ywG, NNN, wYXRsW, kpzSEK, BNVml, qst, flipFt, GSBN, The British Retail Consortium, aims to help the Retail industry reduce its annual emissions! 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