40 Trends 1 (2008-2009)

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Asking the right questions
about GHG footprints
By LAURA H. KOSLOFF
rom the U.S. Supreme Court's April 2007 deci-     Strategic
sion in Massachusetts vs. EPA, to the New  process of s
OxfordAmerican Dictionary naming carbon  include the]
neutral the 2006 word of the year, and to the threat-   Whethe
ened species listing of the polar bear, the popular and  business tra'
business discussion of climate change has been  ply chain an
exploding. As the headlines pile up, it's hard to argue  Resources I
with the fact that climate change risk and/or opportu-  Sustainable
nity management is becoming a material business  three potent
issue for a growing number of companies.       inventory. S
Managing the risks and opportunities associated  direct GHG
with climate change usually begins with an under-  gy producti
standing of a company's greenhouse gas (GHG)   2 accounts f
emissions, termed an emissions inventory or GHG  site (primari
footprint. There is no single reason for carrying  energy, such
out a GHG emissions inventory. Companies pursue  and can incl
GHG inventories for different reasons, including  upstream
mandatory compliance reports; inventory report-  chased or pr
ing as part of state or federal voluntary programs;  emissions a,
as part of joining an organization such as the  ing of produ
California Climate Action Registry; as part of    Determ
a process of going climate neutral; or as part of  required anc
a process of corporate strategic planning and  80 percent c
risk management.                               effort) is the
While often viewed as an end in and of itself, a   Approp:
company's GHG footprint should instead serve pri-  for policy pi
marily to inform internal conversations about cli-  more aggres
mate change and sustainability. For example,      Whethe
questions asked might include Do our emissions  independent
constitute a material financial risk under future  as a means o
policy? Do we have significant internal emissions  and usually
reduction opportunities? Are our GHG emissions  this can be a
on an upward trend or downward trend, and why?  untary marki
What types of reduction targets can we realistical-  inventory.
ly make in response to stakeholder interest? Can   Whethe
we realistically consider climate neutrality,  opportunitie
whether at the corporate level or at the level of   How to
individual products and services?              or renewabl
A GHG inventory is a starting point for all of  Scope 2 ana
these questions. A quality GHG inventory, com-    Whethe
bined with other initiatives, can contribute to a  col that gen
company's successful branding as a climate change  the future.
leader. An unsuccessful effort can be ignored or,  How thes
even worse, contribute to a charge of green-wash-  everything a
ing. Pulling together a GHG footprint can be rela-  value, as we
tively straightforward for some companies and  intended pu
very complex for others. But a quality inventory is  looked in th
critical to achieving the objectives associated with  little plannit
carrying out an inventory in the first place.  (and often I
While there are standardized inventory proto-
cols, companies still have considerable flexibility
in designing their inventory. Different motivations
for carrying out an inventory can suggest quite dis-  Laura H.
tinct approaches to the scope, depth, and form of a  rities and dir
GHG inventory. The resulting inventories can vary  EcoSecuritie
widely in terms of cost, as well as the depth and  is the Sectior
magnitude of the information that needs to be pro-  the Section s
duced to complete the inventory,               and the Secti

C41 Printed on recycled paper

decisions to be made as part of the
tructuring a GHG inventory can
following:
r to include Scope 3 emissions (from
vel to upstream and downstream sup-
alysis) and to what extent. The World
nstitute/World Business Council on
Development GHG Protocol identifies
ial scopes for a corporate GHG
cope 1 encompasses a company's
emissions, whether from on-site ener-
on or other industrial activities. Scope
'or energy that is purchased from off-
ly electricity but can also include other
as steam). Scope 3 is much broader
ude anything from employee travel, to
emissions embedded in products pur-
ocessed by the firm, to downstream
ssociated with transporting and dispos-
cts sold by the firm.
ining the level of accuracy that is
t whether an 80-20 approach (i.e.,
f the insight for 20 percent of the
appropriate target to shoot for.
riate choice of a baseline year, whether
urposes or as part of an effort to set
sive emission reduction targets.
r to have the inventory certified by an
third party. While seemingly attractive
f validating one's inventory calculations
ised in a regulatory compliance market,
n unnecessary expense in a purely vol-
et depending on the purpose of the
r to look for emissions reduction
:s as part of the footprint analysis.
include and account for green energy
energy certificate purchases in a
lysis.
r to set up a replicable inventory proto-
erates consistent year-to-year results in
se decisions are made will determine
bout the inventory's current and future
11 as its cost-effectiveness against its
rpose. These factors are often over-
e rush to simply do our footprint. A
ng can lead to a much more successful
ower-cost) result.
KoSloff is senior counsel for EcoSecu-
ects the legal services support unit of
s'Global Consulting Services group. She
 Membership officer and has chaired
Special Committee on Climate Change
on s Vision Task Force.

ptember/October 2008
blume 40, Number 1

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