CDP Climate Change 2022 Reporting Guidance

(C4.5a) Provide details of your products and/or services that you classify as low-carbon products.

Question dependencies

This question only appears if you select “Yes” in response to C4.5.

Change from last year

Modified question

Rationale

This question provides valuable information to investors who are seeking to increase their investment in companies providing low-carbon goods and services.

Connection to other frameworks

SDG

Goal 12: Responsible consumption and production

Goal 13: Climate action

2018 RobecoSAM Corporate Sustainability Assessment (DJSI)

Products

Response options

Please complete the following table. You are able to add rows by using the “Add Row” function at the bottom of the table.

[Add Row]

Type of product(s) or service(s) drop-down options:

Select one of the following options:

Power

• Dry steam plant
• Flash steam plant
• Flywheel
• Geothermal electricity
• Hydropower
• Large-scale light-water nuclear reactor
• Liquid air energy storage (LAES)
• Lithium-ion batteries
• Multi-junction cell
• Onshore wind
• Organic Rankine cycle
• Parabolic trough
• Pumped storage
• Seabed fixed offshore wind turbine
• Small-scale light-water nuclear reactor
• Solar PV
• Solar tower
• Other, please specify

Heat

• Geothermal heat management
• Large-scale heat pump
• Latent heat storage (LHS)
• Solar thermal district heating
• Other, please specify

Biofuels

• Anaerobic digestor
• Bioethanol
• Biomass gasification
• Fatty acid methyl ester (FAME)
• Hydrogenated vegetable oil
• Other, please specify

Hydrogen

• Electrolysis
• Hydrogen pipelines
• Hydrogen storage tanks
• Salt cavern hydrogen storage
• Other, please specify

Ammonia

• Ammonia tankers
• Other, please specify

Batteries

• Copper recycling
• Cathode recycling
• Other, please specify

Road

• Compressed biogas engines
• Ethanol-fuelled diesel engine
• Hydrogen fuel cell
• Hydrogen Refuelling Station
• Liquified biogas engines
• Lithium-ion batteries
• Polymer electrolyte membrane fuel cell
• Other, please specify

Rail

• Magnetic levitation
• Other, please specify

Shipping

• Ammonia bunkering
• Cold ironing, alternative maritime power
• Foul Release Hull Coating
• Liquified biogas engines
• Rudder bulb
• Other, please specify

Aviation

• Geared Turbo Fan/ Ultra-High Bypass Ratio engine
• Other, please specify

Chemicals and plastics

• Chemical absorption of CO2
• Physical absorption of CO2
• Other, please specify

Iron and steel

• Chemical absorption of CO2
• Other, please specify

Cement and concrete

• Calcined clay
• Other, please specify

Pulp and paper

• Lignin extraction
• Black liquor gasification
• Other, please specify

Aluminum

• Additive manufacturing
• Other, please specify

CO2 storage

• CO2-enhance oil recovery
• Saline formation
• Other, please specify

Buildings construction and renovation

• Building orientation: Lighting
• Building orientation: Thermal performance
• Composite materials
• Dual flow ventilation
• Dynamic simulation
• Foam, caulk, tape or gaskets
• Modular components
• Natural ventilation
• Pre-casting
• Structural Insulated Panel
• Thick crystal products or thin-film products
• Other, please specify

Heating and cooling

• Advanced heat exchanger
• Air-source heat pump using heat recovery
• Aquifer thermal energy storage (ATES)
• Borehole thermal energy storage (BTES)
• Central heat pump water heaters
• Chilled water storage
• Ground-source heat pump
• Hot water tank
• Hydrogen boiler
• Pellets burning stove and boiler
• Solid-liquid ice storage
• State-of-the-art air-to-air technology
• Wood burning stove
• Other, please specify

Cooking

• Bag digester
• Composite material digester
• Improved biomass cooking stove
• Induction cooker
• LPG cooking stove
• Vitroceramic/hot plate cooking stoves
• Other, please specify

Lighting

• Conventional LED
• Organic LED
• Polymer LED
• Other, please specify

Systems integration

• Double smart grid
• Smart meter
• Other, please specify

CO2 transport

• Pipeline
• Other, please specify

Other

• Hybrid flexible demand and battery network
• Induction heating for large-scale industrial processes
• Infrared heating for large-scale industrial processes
• Other, please specify

Requested content

Level of aggregation (column 1)

• Select from the drop-down menu what level of aggregation you wish to report on in this row. For example, you may only produce one product that can be classified as ‘low carbon.’ In this case you may want to report at the product level of aggregation. Alternatively, if your company produces several low carbon products that have a similar function, you may wish to report at the “Group of products or services” level.
• Note that you can add multiple rows to this table and report different levels of aggregation. For each row, please select the level of aggregation that is most appropriate to your stakeholders.

Taxonomy used to classify product(s) or service(s) as low carbon (column 2)

• As investors seek to increase the proportion of their portfolio invested in low carbon products there is an effort to establish standardized taxonomies to classify and define low-carbon products and services.
• Select the taxonomy used to classify the product(s) or service(s) as low-carbon. If you used a taxonomy that is not listed, select “Other, please specify” and state the taxonomy used.
• If you are reporting a product or service that you consider to be low-carbon, but it has not been classified as such by any taxonomy, select “No taxonomy used to classify product(s) or service(s) as low-carbon”.

Type of product(s) or service(s) (column 3)

• Select the category and type of product or service from the list of options provided, which have been developed using the IEA Energy Technology Perspectives (ETP) Clean Energy Technology Guide and the Climate Bonds Taxonomy.
• If the product(s) or service(s) you are disclosing does not fall into any of the types provided, select “Other”. If the product(s) or service(s) is not listed within the relevant type of product/service, select “Other, please specify”.

Description of product(s) or service(s) (column 4)

• Use this column to describe the product(s) or service(s) that you are disclosing in this row.
• If you have selected “No taxonomy used to classify product(s) or service(s) as low-carbon” in column 2, provide a rationale as to why you consider the product(s) or service(s) to be low-carbon.

Have you estimated the avoided emissions of this low-carbon product(s) or services(s)? (column 5)

• The reduction in life cycle emissions between a baseline (business-as-usual) scenario or reference product and the low-carbon product or service is commonly referred to as the “avoided emissions”.
• Indicate whether your organization has attempted to calculate the avoided emissions of the low-carbon product(s) or service(s) described in column 4. You will be requested to provide details of your estimation approach in the subsequent columns.
• To estimate the avoided emissions of a low-carbon product or service, companies could follow either an “attributional” or “consequential” estimation approach:

- An attributional estimation approach – the most commonly used approach at present - measures the difference in total life-cycle GHG emissions between the low-carbon product(s) or service(s) and a reference product or service that provides an equivalent function.
- A consequential estimation approach measures the sum of total, system-wide changes in emissions or removals occurring because of the low-carbon product(s) or service(s) when compared to a baseline (business-as-usual) scenario without the low-carbon product. This approach helps to answer the question “What are the GHG impacts related to the full share of the activities that are expected to change when producing, consuming, and disposing of the product?”.

• For more information on these approaches refer to WRI’s paper “Estimating and Reporting the Comparative Emissions Impacts of Products” and the Avoided Emissions Framework.

Methodology used to calculate avoided emissions (column 6)

• This column only appears if you select “Yes” in “Have you estimated the avoided emissions of this low-carbon product(s) or service(s)” (column 5).
• Methodologies to calculate avoided emissions are still in the infancy of their development. CDP will keep refining the list of methodologies to best reflect those that are considered best practice.

Life cycle stage(s) covered for the low-carbon product(s) or service(s) (column 7)

• This column only appears if you select “Yes” in “Have you estimated the avoided emissions of this low-carbon product(s) or service(s)” (column 5).
• Select the life cycle stages of the low-carbon product(s) or service(s) covered in your avoided emissions calculation. Refer to the “Explanation of terms” for definitions of the life cycle stages.
• Where practical, a full life-cycle approach (cradle-to-grave or cradle-to-cradle/closed loop production) should be taken to estimate the avoided emissions of the low-carbon product(s) or service(s).
• If you have not used a life cycle approach, select “Not applicable” and explain why not in column 12 “Explain your calculation of avoided emissions, including any assumptions”.

Functional unit used (column 8)

• This column only appears if you select “Yes” in “Have you estimated the avoided emissions of this low-carbon product(s) or service(s)” (column 5).
• Avoided emissions are usually expressed in terms of a functional unit, which should be applicable to both the low-carbon product(s) or service(s) and the reference product/service or baseline (business-as-usual) scenario.
• The functional unit refers to the performance characteristics and services delivered by the product(s) or service(s) and should be clearly defined and measurable.
• A functional unit will typically define the following three parameters:

- The function of the product(s) or service(s);
- The duration or service life of the product(s) or service(s) (i.e. the amount of time needed to fulfil the function); and
- The quality of the product(s) or service(s).

• For example, a functional unit to compare an electric vehicle with a conventional vehicle could be “operating an electric passenger vehicle for 50,000km vs. a similar-sized internal combustion engine passenger vehicle for 50,000km”.

Reference product/service or baseline scenario used (column 9)

• This column only appears if you select “Yes” in “Have you estimated the avoided emissions of this low-carbon product(s) or service(s)” (column 5).
• Specify and explain the choice of the reference product/service or baseline (business-as-usual) scenario used to calculate the estimated avoided emissions in column 11.
• Note that the reference product should represent the most likely alternative solution that would be used for a certain function in the absence of your disclosed low-carbon product(s) or service(s).

Life cycle stage(s) covered for the reference product/service or baseline scenario (column 10)

• This column only appears if you select “Yes” in “Have you estimated the avoided emissions of this low-carbon product(s) or service(s)” (column 5).
• Select the life cycle stages covered in your avoided emissions calculation for the reference product/service or baseline scenario specified in column 9. Refer to the “Explanation of terms” for definitions of the life cycle stages.
• Note that credible comparisons should cover the same life cycle stages for the low-carbon product/service and the reference product/service.
• If you have not used a life cycle approach, select “Not applicable” and explain why not in column 12 “Explain your calculation of avoided emissions, including any assumptions”.

Estimated avoided emissions (metric tons CO2e per functional unit) compared to reference product/service or baseline scenario (column 11)

• This column only appears if you select “Yes” in “Have you estimated the avoided emissions of this low-carbon product(s) or service(s)” (column 5).
• Quantify the estimated avoided emissions of your low-carbon product(s) or service(s), compared to the reference product/service or baseline scenario specified in column 9.
• For example, if using an attributional approach, this figure can be calculated using the equation: “Life-Cycle Emissions of Reference Product – Life-Cycle Emissions of Low-Carbon Product”. If the resulting figure is positive, the assessed product emits less over its life cycle when compared to the reference product and as such, the positive figure represents the “avoided emissions” of the low-carbon product(s) or service(s).
• Note that the avoided emissions should be estimated in relation to the functional unit specified in column 8.

Explain your calculation of avoided emissions, including any assumptions (column 12)

• This column only appears if you select “Yes” in “Have you estimated the avoided emissions of this low-carbon product(s) or service(s)” (column 5).
• State whether you used an attributional or consequential approach to estimate the avoided emissions and explain the reason for your choice. If you used a consequential approach, clarify the boundary of your analysis and what effects you have included in your assessment (e.g. rebound and secondary enabling effects).
• Include the figures used in your calculation and any critical assumptions that you made (e.g., emissions factors, performance characteristics, allocation methods, data sources and any uncertainties) to help data users to assess the credibility and reliability of the results.

Revenue generated from low-carbon product(s) or service(s) as % of total revenue in the reporting year (column 13)

• State the revenue generated from the low-carbon product(s) or service(s) described in column 4 as a percentage of your organization’s total revenue in the reporting year.
• Enter the figure for ‘revenue’ as would be declared in your financial statement (sometimes referred to a ‘turnover’ or ‘sales’). Under the International Financial Reporting Standard this would be the inflow of income arising in the course of an entity’s ordinary activities, with deductions made (such as for sales returns, allowances and discounts). This figure is commonly used by investors to assess the income-generating ability of a business.

Example response

Worked examples of low-carbon products

Example 1: Company A is a paper production company. It has a range of products that can be classified as low-carbon as these products are made from recycled material so have comparatively lower emissions than paper made from virgin material.

Example 2: Company B is an automotive manufacturer. Its electric vehicles are considered low-carbon as they have comparatively lower use stage emissions when compared with their internal combustion engine vehicles.

Explanation of terms

• Baseline scenario: A reference case that represents the events or conditions most likely to occur in the absence of the low-carbon product in the consequential approach to estimating avoided emissions.
• Reference product: The product against which the low-carbon product is compared in the attributional approach to estimating avoided emissions.
• Gate-to-gate: The emissions and removals attributed to a studied product while it is under the ownership or control of the reporting company.
• Cradle-to-gate: A partial life cycle assessment from material acquisition (cradle) through to when the product leaves the reporting company’s gate (i.e. immediately following the product’s production). Includes the material acquisition & pre-processing stage and the production stage.
• Cradle-to-grave: A full life cycle assessment of emissions and removals attributed to a studied product from material acquisition through to the material or product end-of-life (grave). Includes the material acquisition & pre-processing stage, production stage, use stage and end-of-life stage.
• Cradle-to-cradle/closed loop production: A full life cycle assessment from material acquisition though to end-of-life material or product recycling (i.e. cradle-to-grave + recycling).
• Life cycle stages (in line with the GHG Protocol Product Life Cycle Accounting and Reporting Standard):

- Material acquisition & pre-processing stage: A life cycle stage that begins when resources are extracted from nature and ends when the product components enter the gate of the studied product’s production facility.
- Production stage: A life cycle stage that begins when the product components enter the production site for the studied product and ends when the finished studied product leaves the production gate.
- Use stage: A life cycle stage that begins when the consumer takes possession of the product and ends when the used product is discarded.
- End-of-life stage: A life cycle stage that begins when the used product is discarded by the consumer and ends when the product is returned to nature (e.g. incinerated) or allocated to another product’s life cycle.

Additional information

How do you define a low-carbon product?

• Despite the increasing focus from investors on low-carbon products, there remains a level of ambiguity over the definition of what constitutes a ‘low-carbon product’. Instead, there has been a greater focus on the benefits of their creation and use, one of which is aiding in the transition towards a net-zero carbon economy operating within the limits set out by leading climate scientists to ensure that global average temperature increase above pre-industrial level stays below 1.5°C.
• Taxonomies, such as the Climate Bonds Taxonomy, are similarly based on this scientific criterion. At this stage, CDP encourages companies to use this criterion when evaluating whether a product is low carbon or not (i.e., companies should evaluate a product or service as low carbon if it is compatible with the level of decarbonization required to keep global temperature increase to 1.5°C compared to pre-industrial temperatures).
• Therefore, while CDP encourages the development of common definitions across global markets about what constitutes a ‘low-carbon product’, companies should evaluate their low-carbon products in relation to their contribution to a net-zero carbon economy. Different goods and services will have pertinent characteristics in which they can do this. This can include improving the energy efficiency of certain technologies so that they are consistent with avoiding dangerous climate change or contributing to the decarbonization of high-emitting industries.