CDP Climate Change 2022 Reporting Guidance

(C6.5) Account for your organization’s gross global Scope 3 emissions, disclosing and explaining any exclusions.

Change from last year

Modified question

Rationale

For most companies, the majority of emissions occur in the value chain. CDP asks this question to gauge the thoroughness of companies’ accounting processes and to understand how companies are analyzing their emissions footprints.

Connection to other frameworks

TCFD

Metrics & Targets recommended disclosure b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

SDG

Goal 12: Responsible consumption and production

Goal 13: Climate action

2018 RobecoSAM Corporate Sustainability Assessment (DJSI)

Scope 3

Response options

Please complete the following table:

Requested content

General

• According to the GHG Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard (page 107): “Any estimates of avoided emissions must be reported separately from a company’s Scope 1, Scope 2, and Scope 3 emissions, rather than included or deducted from the Scope 3 inventory”. In the context of your CDP response, you can provide information on actions you take to reduce your Scope 3 emissions in question C4.3b on emissions reduction initiatives.
• You should complete every row of the table (with the exception of the last two rows “Other (upstream)” and “Other (downstream)” which are optional), but not necessarily all columns.
• The columns that you need to complete in response to question C6.5 will depend on your selection made in the “Evaluation status” column and are summarized in the guidance below for column 2 “Evaluation status”.

Scope 3 category (column 1)

• This column is already completed in the ORS and all categories will appear. The categories of Scope 3 emissions have been taken from the Greenhouse Gas Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard, published in September 2011. Companies should refer to the standard for information on the emissions sources that each category comprises and additional information on how to calculate these emissions.

Evaluation status (column 2)

This column should be completed for all Scope 3 categories, with the exception of “Other (upstream)” and “Other (downstream)” – these two rows should only be used if companies have a source of Scope 3 emissions that is not provided in the categories above. The evaluation status includes two components: whether a Scope 3 category is relevant to your business and whether you have calculated the emissions in that category. Relevance should be determined with reference to the GHG Protocol Scope 3 standard and CDP's Technical Note on the relevance of Scope 3 categories by sector – see Additional Information for the Scope 3 relevance criteria . Select from:

- Relevant, calculated - Select this option if the Scope 3 category is relevant to your business and you have calculated the emissions associated with at least part of it.
- Relevant, not yet calculated - Select this option if you are aware that the Scope 3 category is relevant to your business but you have not yet calculated the emissions associated with it.
- Not relevant, calculated - Select this option if you know that this Scope 3 category is not one of the most important for your business but as part of your Scope 3 work, you have been able to calculate the emissions associated with it.
- Not relevant, explanation provided - Select this option if you have investigated this Scope 3 category and have been able to determine that it is not relevant. This could be based on quantitative or qualitative investigations.
- Not evaluated - Select this option if you have not yet investigated this Scope 3 category and therefore do not know whether or not it is relevant for your business.

Emissions in reporting year (metric tons CO2e) (column 3)

• This column is only presented if “Relevant, calculated” or “Not relevant, calculated” is selected in column 2 “Evaluation status”.
• Enter the emissions appropriate to each Scope 3 category identified in metric tons CO2e, entering numbers only up to 99,999,999,999 without commas and up to two decimal places. Negative numbers are not allowed as reporting needs to be gross, not net figures. Emission figures should be for the reporting year only.
• Entering 0 implies that you have calculated the emissions associated with this category and they are equal to zero.

Emissions calculation methodology (column 4)

• This column is only presented if “Relevant, calculated” or “Not relevant, calculated” is selected in column 2 “Evaluation status”.
• Select the calculation methodology(ies) used to calculate the emissions associated with this Scope 3 category.
• You should consult the GHG Protocol’s Technical Guidance for Calculating Scope 3 Emissions for details of which emissions calculations methodologies are relevant to each Scope 3 category.

Percentage of emissions calculated using data obtained from suppliers or value chain partners (column 5)

• This column is only presented if “Relevant, calculated” or “Not relevant, calculated” is selected in column 2 “Evaluation status”.
• Such data obtained from suppliers or value chain partners may take the form of primary activity data, or emissions data calculated by suppliers that are specific to suppliers’ activities. More information on this can be found in Chapter 7, Collecting Data, of the GHG Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard.

Please explain (column 6)

• For all Scope 3 categories that you have identified as “Relevant, calculated” or “Not relevant, calculated” in the “Evaluation status” column, provide a short description of the types and sources of data used to calculate emissions (e.g. activity data, emission factors and GWP values), and any further details of the emissions calculation methodology(ies) selected in column 5 such the assumptions and allocation methods used and any exclusions within the category.
• For all Scope 3 categories that you have identified as “Not relevant, explanation provided” in the “Evaluation status” column, provide details of how you have reached the conclusion that the source is not relevant and include any qualitative or quantitative reasoning.
• If you wish to provide additional context to any of the rows in the table, such as to explain why emissions have decreased or increased, you can also do that in this column.

Note for all high-impact sector companies:

• Companies in one of CDP’s high impact sectors (see here for more information) should refer to CDP’s Technical Note on the relevance of Scope 3 categories by sector, which identifies the relevant and most significant Scope 3 categories for each sector based on a review of literature and analysis of CDP 2021 data.

Note for oil & gas and coal sector companies:

• CDP has produced sector-specific guidance for estimating Scope 3 category 11 (use of sold products) emissions for the Oil & Gas and Coal sectors.

Note for financial services sector companies:

• For financial services sector companies, Scope 3 Category 15 “Investments” emissions has been pulled out of question C6.5 and is requested to be disclosed in C-FS14.1a. As the majority of emissions occur in relation to financial products and services and/or investments, financed emissions, or Scope 3 Category 15 “Investments” emissions as defined by the GHG Protocol is the most relevant category to financial services organizations.
• Thus, Row 15 “Investments” is hidden in this question, please disclose this in C-FS14.1a.

Note for companies responsible for the transportation (including maritime), storage, transmission and distribution of fossil fuels:

• Scope 3 emissions from the handling of fossil fuels can be significant, as highlighted by the IEEFA. Therefore, companies responsible for the transportation (including maritime), storage, transmission and distribution of fossil fuels should disclose emissions from the final use of these products as Scope 3 category 11 “Use of Sold Products”.
• Scope 3 category 11 emissions from fossil fuels should be calculated based on the throughput of fossil fuel products in your operations during the reporting year.
• As per the ACT initiative’s O&G Sector methodology, these emissions are a consequence of a companies’ activities even though the fossil fuels may not be owned by the company and thus are included in Scope 3.
• Please refer to the CDP Technical Note “Guidance methodology for the estimation of Scope 3 category 11 emissions for oil and gas companies” for further guidance.

Example Response

Example response for the selection of “Relevant, calculated” in column 2.

Example response for the selection of “Not relevant, explanation provided” in column 2.

Additional information

• Relevance criteria for Scope 3 emissions sources: Companies should not exclude any activity that would compromise the relevance of the reported inventory. The table below from the Corporate Value Chain (Scope 3) Accounting and Reporting Standard provides a list of criteria for determining relevance. Companies in one of CDP’s high-impact sectors should also refer to CDP’s Technical Note on the relevance of Scope 3 categories by sector, which identifies the relevant and most significant Scope 3 categories for each sector based on a review of literature and analysis of CDP 2021 data.

• Scope 3 screening tool: To help facilitate the adoption of the Scope 3 Standard and assist companies in determining the relevance of Scope 3 emissions sources, the GHG Protocol, in collaboration with Quantis, have released a free Scope 3 screening tool. This tool asks a number of relatively simple questions to approximate your Scope 3 inventory, and can be used by companies of all sizes and all sectors. Please note that this tool is not a data collection tool and should only be used to make a first approximation of your Scope 3 emissions. Having used the tool to help determine the relevance of Scope 3 categories, companies should then develop more accurate approaches for categories shown to be a relevant source of emissions.