Chapter 3: Guide for assessing GHG emissions of Desktop. Managed Services (DMS) ... Lenovo. GHG Protocol www.lenovo.com/social_responsibility/us/en/.
FR
Ref. Ares(2013)1226028 - 21/05/2013
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
FINAL REPORT
A study prepared for the European Commission DG Communications Networks, Content & Technology
Digital Agenda for Europe
This study was carried out for the European Commission by
Internal identification Contract number:
30-CE-0454181/00-78
SMART number
SMART 2011/0073
DISCLAIMER By the European Commission, Directorate-General of Communications Networks, Content & Technology. The information and views set out in this publication are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein.
ISBN 978-92-79-22840-7 DOI: 10.2759/98282
© European Union, 2013
Photo credit: cover @ Flickr user Creativity103
Table of Contents
TABLE OF CONTENTS
3
LIST OF TABLES
6
LIST OF FIGURES
9
GLOSSARY
10
LIST OF ABBREVIATIONS
11
EXECUTIVE SUMMARY
13
CHAPTER I: INTRODUCTION
23
1.1. Objectives of the study
23
1.2. Scope of the study
23
1.2.1.
Definition of the ICT sector
24
1.2.2.
Emission scope
26
1.3. Stakeholders’ interviews
29
1.4. Report structure
30
CHAPTER II: ANALYSIS OF METHODOLOGIES AND INITIATIVES FOR COMPANIES, GOODS AND SERVICES 31 2.1. Existing methodologies and initiatives
31
2.1.1.
Selected initiatives and methodologies
32
2.1.2.
Most common methodologies and initiatives
36
2.2. Comparative assessment
47
2.2.1.
Application field
47
2.2.2.
General features
54
2.2.3.
Data types
57
2.2.4.
Usability
61
2.2.5.
Comparability of results
64
2.2.6.
Reliability of results
77
2.2.7.
Transparency of results and assumptions
79
2.2.8.
Interaction with other methodologies
84
2.3. Product Category Rules (PCRs)
87
2.4. Mapping of methodologies and initiatives
90
2.5. Conclusions
95
Towards an overall measurement methodology of the carbon and energy footprints of the |3 ICT sector
CHAPTER III: RISK-BENEFIT ANALYSIS
99
3.1. Major challenges
99
3.2. Analysis of risks
101
3.2.1.
Financial risks
101
3.2.2.
Other risks and barriers
105
3.2.3.
Stakeholders’ opinions
109
3.3. Analysis of benefits
110
3.3.1.
Financial benefits
110
3.3.2.
Other benefits
114
3.3.3.
Stakeholders’ opinions
119
CHAPTER IV: POLICY SCENARIOS
121
4.1. Scenarios definitions and assessment approach
121
4.2. Scenario I
125
4.2.1.
Generic considerations
125
4.2.2.
Specific Risk-Benefit analysis
131
4.2.3.
Methodology analysis
135
4.2.4.
Stakeholders’ opinions
143
4.3. Scenario II
144
4.3.1.
Generic considerations
144
4.3.2.
Specific Risk-Benefit analysis
154
4.3.3.
Methodology analysis
159
4.3.4.
Stakeholders’ opinions
165
4.4. Scenario III
167
4.4.1.
Generic considerations
167
4.4.2.
Specific Risk-Benefit analysis
174
4.4.3.
Methodology analysis
175
4.4.4.
Stakeholders’ opinions
181
4.5. Questions for an impact assessment
181
CHAPTER V: CONCLUSIONS
184
REFERENCES
191
ANNEX A. GENERAL METHODOLOGIES
DESCRIPTION
FICHES
OF
INITIATIVES
AND 195
A.1. Generic organisation-oriented methodologies and initiatives
195
A.2. ICT-specific, organisation-oriented methodologies
207
A.3. Generic product-oriented methodologies
211
4|
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
A.4. ICT-specific product-oriented methodologies and initiatives
224
ANNEX B.
243
COMPARISON OF METHODOLOGIES
B.1. Comparison of general features
243
B.2. Usability
257
B.3. Comparability
263
B.4. Reliability
281
B.5. Transparency
290
ANNEX C.
OVERVIEW OF PCRS
299
ANNEX D.
INTERVIEW GUIDANCE
304
D.1. Objectives
304
D.2. Risk-benefit analysis
304
D.3. Policy scenarios
305
D.4. Additional data sources
306
ANNEX E.
307
EXISTING EU POLICIES RELATED TO PRODUCT FOOTPRINTING
Towards an overall measurement methodology of the carbon and energy footprints of the |5 ICT sector
List of Tables Table 1: Number of organisations interviewed, by type ............................................................... 18 Table 2: Summary of the three studied scenarios ........................................................................ 20 Table 3: The 2006-07 OECD ICT sector definition (based on ISIC Rev. 4) ..................................... 25 Table 4: Major methodologies and initiatives .............................................................................. 33 Table 5: Methodologies used by ICT companies .......................................................................... 36 Table 6: Data definitions from different methodologies .............................................................. 57 Table 7: Scoring for the aspect usability ...................................................................................... 61 Table 8: Evaluation according to the usability criteria ................................................................. 62 Table 9: Scoring for the aspect comparability.............................................................................. 64 Table 10: Evaluation according to the comparability criteria ....................................................... 66 Table 11: Scoring for the aspect reliability ................................................................................... 77 Table 12: Evaluation according to the reliability criteria .............................................................. 77 Table 13: Scoring for the aspect transparency ............................................................................. 80 Table 14: Evaluation according to the transparency criteria ........................................................ 81 Table 15: PCR programs in different countries ............................................................................. 87 Table 16: Financial risks of GHG measurement and reporting (steps 1 & 2)................................ 102 Table 17: Central estimates of costs of GHG measurement and reporting (adapted from DEFRA, 2012) ................................................................................................................................. 104 Table 18: Barriers/risks faced by companies for GHG management and reporting (adapted from IEMA, 2010) ....................................................................................................................... 106 Table 19: Financial benefits of GHG measurement and reporting ...............................................111 Table 20: Views of reporting companies on the value of reporting in addressing barriers (adapted from IEMA, 2010) ............................................................................................................... 116 Table 21: Case studies of ICT companies involved in the CDP .................................................... 118 Table 22: Climate change risks reported by ICT companies implementing CDP reporting (adapted from CDP, 2011a) ............................................................................................................... 119 Table 23: Validity of different reporting scenarios ..................................................................... 121 Table 24: Summary of the three studied scenarios .................................................................... 124 Table 25: Objectives of Scenario I, by stakeholder ..................................................................... 125 Table 26: Considerations for mandatory methodological elements (not exhaustive) of Scenario I128
6|
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Table 27: Annual maximum estimated GHG emissions savings, for voluntary reporting policy option (adapted from DEFRA, 2012) .................................................................................. 134 Table 28: Coverage of the mandatory methodological elements by the Chapter II criteria ........ 138 Table 29: Methodological considerations for Scenario I............................................................. 139 Table 30: Objectives of Scenario II, by stakeholder .................................................................... 145 Table 31: Considerations for mandatory methodological elements of sub-scenario II.b............. 148 Table 32: Present value summary of costs and benefits of options (adapted from DEFRA, 2012)155 Table 33: Annual maximum estimated GHG emissions savings, for mandatory reporting policy options (adapted from DEFRA, 2012) ................................................................................ 158 Table 34: Coverage of the mandatory methodological elements by the Chapter II criteria ........ 161 Table 35: Methodological considerations for Sub-scenario II.b .................................................. 162 Table 36: Objectives of Scenario III, by stakeholder ................................................................... 168 Table 37: Advantages and disadvantages of different targets types (source: DEFRA, 2009a) .....173 Table 38: Shares of CDP reporting companies with targets in the ICT sector (source: adapted from CDP, 2011a) ............................................................................................................... 174 Table 39: Methodological considerations for Sub-scenario III .................................................... 178 Table 40: Definition of policy scenarios ..................................................................................... 189 Table 41: GHG Protocol Corporate Standard ............................................................................. 195 Table 42: GHG Protocol Scope 3 Standard ................................................................................ 198 Table 43: ISO 14064-1 ................................................................................................................ 200 Table 44: Bilan Carbone® .......................................................................................................... 202 Table 45: Carbon Disclosure Project .......................................................................................... 205 Table 46: ITU-T L.1420 .............................................................................................................. 207 Table 47: ADEME – ICT Sectoral Guidance ................................................................................ 209 Table 48: GHG Protocol Product Standard ................................................................................ 211 Table 49: PAS 2050 ................................................................................................................... 214 Table 50: ISO 14040/14044 ........................................................................................................ 216 Table 51: ISO/ DIS 14067 ............................................................................................................ 218 Table 52: BP X30-323 ................................................................................................................. 220 Table 53: MEErP ........................................................................................................................ 222 Table 54: GHG Protocol Product Standard – DMS ..................................................................... 224 Table 55: GHG Protocol Product Standard – TNS ...................................................................... 226 Table 56: IEC TR 62725 .............................................................................................................. 228
Towards an overall measurement methodology of the carbon and energy footprints of the |7 ICT sector
Table 57: ETSI TS 103 199 .......................................................................................................... 230 Table 58: ITU-T L.1410 ............................................................................................................... 233 Table 59: PAIA ........................................................................................................................... 236 Table 60: iNEMI - Eco-Impact Evaluator .................................................................................... 238 Table 61: EPEAT®...................................................................................................................... 240 Table 62: Energy Star ................................................................................................................ 242 Table 63: Comparison – General features of organisation-oriented methodologies .................. 244 Table 64: Comparison – General features of product-oriented methodologies ......................... 248 Table 65: Comparison – Usability of organisation-oriented methodologies............................... 258 Table 66: Comparison – Usability of product-oriented methodologies ...................................... 260 Table 67: Comparison – Comparability of organisation-oriented methodologies (1) ................. 264 Table 68: Comparison – Comparability of organisation-oriented methodologies (2) ................. 266 Table 69: Comparison – Comparability of product-oriented methodologies (1)......................... 268 Table 70: Comparison – Comparability of product-oriented methodologies (2) ......................... 274 Table 71: Comparison – Reliability of organisation-oriented methodologies ............................. 282 Table 72: Comparison – Reliability of product-oriented methodologies .................................... 285 Table 73: Comparison – Transparency of organisation-oriented methodologies ....................... 291 Table 74: Comparison – Transparency of product-oriented methodologies ............................... 294 Table 75: PCR-programs in different countries .......................................................................... 300 Table 76: Overview of PCRs categorised by product groups regarding the ICT sector (marked in blue means PCRs are still valid) .......................................................................................... 300
8|
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
List of Figures Figure 1: Methodologies and initiatives analysed in this study (situation in September 2012) ..... 15 Figure 2: Usability criteria evaluation .......................................................................................... 16 Figure 3: Simplified structure of the ICT sector ............................................................................ 26 Figure 4: Overview of GHG Protocol scopes and emissions across the value chain ...................... 27 Figure 5: Life-cycle phases ........................................................................................................... 28 Figure 6: History of methodology development .......................................................................... 46 Figure 7: Information Technology sector emissions disclosure (t CO2-e) (source: CDP, 2011b) .... 68 Figure 8: Telecommunications sector emissions disclosure (t CO2-e) (source: CDP, 2011c) ......... 69 Figure 9: Information Technology emissions disclosure (t CO2-e) (source: CDP, 2010) ................ 69 Figure 10: Links between product-oriented methodologies (situation in September 2012) ......... 84 Figure 11: Field of application for the different methodologies and initiatives (situation in September 2012) ................................................................................................................. 91 Figure 12: Level of detail for the different methodologies and initiatives (situation in September 2012).................................................................................................................................... 92 Figure 13: Overview of similar and dissimilar features of ICT-specific methodologies .................. 93 Figure 14: Coverage of the different methodologies and initiatives regarding environmental impacts (situation in September 2012) ................................................................................ 94 Figure 15: Review and documentation requirements of the different methodologies (situation in September 2012) ................................................................................................................. 95 Figure 16: GHG emissions management in a company ................................................................ 99 Figure 17: GHG management hierarchy (adapted from IEMA (2010)) ........................................ 100 Figure 18: Share of organisations measuring GHG emissions, by size (source: ICAEW, 2009) .... 107 Figure 19: Payback period breakdown of reported active emissions reduction initiatives by activity type, for CDP reporting companies (source: CDP, 2011a) ...................................... 112 Figure 20: Payback period breakdown of reported active emissions reduction initiatives by activity type for Information Technology companies (top) and Telecommunications companies (bottom), involved in CDP reporting (source: CDP, 2011a) ............................... 113
Towards an overall measurement methodology of the carbon and energy footprints of the |9 ICT sector
Glossary
Carbon footprint (of a product)
Amount of greenhouse gases emissions, expressed as CO2 equivalent, and occurring over the complete life-cycle of a product, from the extraction of raw materials to the end-of-life.
Energy footprint (of a product)
Amount of energy consumed over the complete life-cycle of a product, from the extraction of raw materials to the end-of-life.
ICT Sector
Information and Communication Technologies manufacturing, trade, and service industries
Initiative
It defines the reporting format for greenhouse gases emissions or energy footprint data and may cover aspects such as public disclosure, target setting, emission reduction measures, assurance/verification requirements, benchmarking and league tables (and may also refer back to a specific “methodology” for some of these aspects). It may include a reporting platform
Methodology
Technical guidance to calculate greenhouse gases emissions or energy footprint. In particular, it deals with the choice of reporting boundaries and emission factors
Product Category Rule
Set of specific rules, requirements and guidelines for developing environmental assessments for one or more product categories
Scope 1 emissions (for a company)
Direct greenhouse gases emissions, i.e. occuring from sources that are owned or controlled by the company.
Scope 2 emissions (for a company)
Indirect greenhouse gases emissions from the consumption of purchased electricity, heat, and steam.
Scope 3 emissions (for a company)
Other indirect greenhouse gases emissions, i.e. all other indirect emissions which are a consequence of the activities of the company, but occur from sources not owned or controlled by the company.
10 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
List of abbreviations
ADEME
Agence de l’environnement et de la maîtrise de l’énergie (French Agency for the Environment and Energy Management)
ADSL
Asymmetrical Digital Subscriber Line
BOM
Bill of Materials
CCA
Climate Change Agreements
CDLI
Carbon Disclosure Leadership Index
CDP
Carbon Disclosure Project
CED
Cumulated Energy Demand
CoC
Code of Conduct
CPLI
Carbon Performance Leadership Index
CRC
Carbon Reduction Commitment
CSR
Corporate Social Responsibility
DECC
Department of Energy and Climate Change (UK)
DEFRA
Department for Environment, Food and Rural Affairs (UK)
DMS
Desktop Managed Services
DSLAM
Digital Subscriber Line Access Multiplexor
EC
European Commission
EMAS
Eco-Management and Audit Scheme
EPA
Environmental Protection Agency (US)
EoL
End-of-Life
EPD
Environmental Product Declaration
ErP
Energy-related Product
EuP
Energy-using Product
ETSI
European Telecommunications Standards Institute
FTTH
Fibre To The Home
GHG
Greenhouse Gases
GWP
Global Warming Potential
IC
Integrated Circuit
Towards an overall measurement methodology of the carbon and energy footprints of the | 11 ICT sector
ICT
Information and Communication Technologies
IEC
International Electrotechnical Commission
ISO
International Organisation for Standardisation
IT
Information Technologies
JRC
Joint Research Centre
LAN
Local Area Network
LCA
Life Cycle Assessment
LCD
Liquid Crystal Display
LCI
Life Cycle Inventory
MS
Member State(s) of the European Union
PC
Personal Computer
PCF
Product Carbon Footprint
PCR
Product Category Rules
PUE
Power Usage Effectiveness
QoS
Quality of Service
SDO
Standards Development Organisation
SME
Small and Medium Enterprise
TEC
Typical Energy Consumption
TNS
Telecommunications Network Services
VoIP
Voice over IP
WAN
Wide Area Network
12 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Executive Summary
Executive summary Energy consumption and greenhouse gases (GHG) emissions from the Information and Communication Technologies (ICT) sector are growing rapidly as a result of major economic and societal changes such as the uptake of network connected devices (e.g. smartphones) and the growth of web services. In a business-as-usual scenario considering ongoing energy efficiency improvement, these emissions are expected to almost triple between 2007 and 20201. That said, the ICT sector, through the provision of innovative technology (e.g. smart grids, smart buildings), enables GHG emissions and energy savings throughout the economy: this is known as the “enabling effect”. This balance between direct emissions and indirect savings exists within the context of policies setting specific targets for reducing GHG emissions. Most notably, three key objectives, known as the “20-20-20” targets2, were set in 2007 by the European Union (EU): a 20% reduction in EU greenhouse gas emissions from 1990 levels; raising the share of EU energy consumption produced from renewable resources to 20%3; and a 20% improvement in the EU's energy efficiency. In particular, energy efficiency is a key factor in achieving long-term climate goals and the ICT sector is recognised as having an important role to play in improving the efficiency of major emitting sectors4. Measuring the progress towards these goals thus requires accurate data on emissions from different sectors, and consequently appropriate GHG and energy footprints measurement and reporting methodologies. An appropriate methodology is one that supports practitioners as much as possible in their assessment, while staying practical and user-friendly, and enables them to obtain results in accordance with the level of accuracy expected. It should thus provide a certain level of freedom to adapt the assessment to its objectives (e.g. identification of hotspots in the life cycle in an ecodesign perspective, external communication of a product’s environmental impacts, comparative analysis), but this flexibility should not be achieved at the expense of the robustness of the results.
Objectives and key findings The objective of this study is to better understand the existing landscape of methodologies and initiatives for measuring and reporting GHG emissions (i.e. carbon footprint) and
1
GeSI (2008). SMART 2020: Enabling the low carbon economy in the information age.
2
European Commission (2008), 20 20 by 2020 - Europe's climate change opportunity. COM(2008) 30 final.
3
Rising to 30% if there is an international agreement committing other developed countries to “comparable emission reductions and economically more advanced developing countries to contributing adequately according to their responsibilities and respective capabilities”. 4
BIO (2008), Impacts of Information and Communication Technologies on Energy Efficiency, prepared for EC DG INFSO.
Towards an overall measurement methodology of the carbon and energy footprints of the | 13 ICT sector
Executive summary
energy footprint for the ICT sector, in a perspective of a possible policy implementation. The report is structured in three main parts. Firstly, in the context of Key Action 12 of the Digital Agenda for Europe5, the study provides a panorama and analysis of these methodologies and initiatives in regards to several assessment criteria. Secondly, it looks at the implications of applying these methodologies to carry out GHG emissions reporting at company level and assesses generic risks and benefits. Finally, building on these two aspects, the study provides a preliminary discussion of different policy scenarios (either mandatory or voluntary) for the implementation of GHG emissions reporting at the company level. In particular, the most appropriate methodological frameworks are presented for these scenarios. The scenarios discussion focuses on the ICT sector but scenarios also consider a wider policy implementation for GHG emissions reporting. As an overall conclusion, the methodologies developed by ISO, the GHG Protocol, PAS, ADEME/AFNOR, ETSI and ITU-T6 are all suitable to perform GHG emissions accounting. If regulations were to be developed, one or several of these methodologies could be chosen to be used within the policy framework, depending on the objectives of the regulations. The common basis and similarities between many of the analysed methodologies indeed result in the opportunity to choose or accept several existing methodologies within the policy framework. In this case, some methodological aspects would require harmonisation for a consistent application.
Many existing methodologies and initiatives with much in common The objective of the first chapter is to provide a panorama and analysis of the existing methodologies and initiatives for measuring and reporting GHG and energy footprints. This analysis is solely based on the review of the methodologies and initiatives and associated documents. A wide range of methodologies and initiatives are assessed in this study, that apply to different objects: they relate either to companies or to products (i.e. goods and services), and can be specific to the ICT sector or not. They are shown in Figure 1.
5
Key Action 12 of the Digital Agenda for Europe (COM(2010)245) declares that the European Commission “will assess by 2011 whether the ICT sector has complied with the timeline to adopt common measurement methodologies for the sector's own energy performance and GHG emissions and propose legal measures if appropriate” 6
Respectively International Organization for Standardization, Greenhouse Gas Protocol, Publicly Available Specifications, French Agency of the Environment and Energy Management/French Standardisation Association, European Telecommunications Standards Institute, International Telecommunication Union.
14 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Executive Summary
Methodologies for companies GHG Protocol Corporate Standard
ISO 14064-1
GHG Protocol Scope 3 Standard
Initiatives
Bilan Carbone®
CDP
Methodologies for ICT companies ADEME – ICT Sectoral Guidance
ITU-T L.1420
Methodologies for goods and services ISO 14040/44
ISO 14067
goods ICT-specific PCRs by BP X30-323
IEC TR 62725
GHG Protocol Product Standard
PAS 2050
Methodologies/initiatives for ICT services GHG Protocol ICT Sector Guidance DMS
MEErP
networks
GHG Protocol ICT Sector Guidance TNS
EPEAT
ETSI TS 103 1999
iNEMI
ITU-T L. 1410
Energy Star
BP X30-323
PAIA Draft version
Figure 1: Methodologies and initiatives analysed in this study (situation in September 20127) Each of these methodologies and initiatives for measuring and/or reporting the GHG emissions and energy footprint is briefly presented in a description fiche in Annex A of this report. In the first part of the analysis, the field of application is discussed in terms of scope (life-cycle phases or emissions scopes covered, impact categories, etc.) and sectors of
7
Final version of ITU-T L.1410 was published on August 31, 2012. As the project started early 2012, the draft version of ITU-T L.1410 was analysed instead.
Towards an overall measurement methodology of the carbon and energy footprints of the | 15 ICT sector
Executive summary
application (industry sectors and product groups addressed). General features of the methodologies and initiatives (cut-off criteria, allocation rules, renewable energy, and time scope) are also described. The methodologies and initiatives are then compared according to the following criteria categories: Usability: addresses the user-friendliness of the documentation, and the availability of tools, databases, examples and guidance documents in different languages. Comparability of results: assesses how the methodology deals with aspects influencing the comparability of results, such as life cycle inventories, offsets, functional units and the inclusion of the supply chain. Reliability of results: addresses requirements for critical reviews and/or uncertainty and sensitivity analyses. Transparency of results and assumptions: investigates requirements for public reporting or availability of documentation upon request, as well as requirements on the content of this reporting or documentation. Each of the four criteria has further sub-criteria associated to a scoring scale, used for the semi-quantitative evaluation. As an example, Figure 2 illustrates the usability criteria.
Sub-criteria Availability of calculation tools and databases
Languages
Criteria Usability
Understandability of the text
User-friendliness
Availability of examples
Figure 2: Usability criteria evaluation Key findings of the analysis, common to all methodologies and initiatives are following: 1. The basic approach is similar in most of the analysed methodologies for products as well as those for companies. However, there are obviously significant differences between product-oriented methodologies and company-oriented methodologies. The difference between them mainly lies within their level of detail for certain aspects (e.g. reporting format).
16 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Executive Summary
2. Many of the analysed methodologies are generic and have not been specifically developed for the ICT sector, but some of these methodologies nonetheless provide complementary guidelines/tools for specific sectors, including the ICT sector (e.g. GHG Protocol Corporate Standard, Bilan Carbone®, GHG Protocol Product Standard, BP X30-323). 3. All methodologies and initiatives can be used for (and by) the whole ICT sector, except the ones which require the highest level of detail. These latter are intended for a more limited target within the ICT sector (e.g. GHG Protocol Product standard - ICT sector guidance which provides more detailed information on specific ICT goods and services). 4. All the analysed methodologies (except the labelling schemes EU Energy Star and EPEAT) have an indicator of climate change (i.e. global warming potential). Some methodologies have a wider scope similar to Life Cycle Assessments (LCA) and thus include a wider range of environmental impacts (e.g. ISO 14040/44, ETSI TS 103 199, ITU-T L. 1410, MEErP). Some methodologies cover just one or two additional environmental impacts (e.g. the Carbon Disclosure Project also addresses water consumption). 5. All methodologies at least recommend a critical review for published results and a detailed and transparent documentation of the analysis allowing a contextual understanding of the results8. This is however not mandatory for all methodologies and depends partly on the intended use of the assessment (e.g. internal improvement strategies, external communication). Key findings related to product-oriented methodologies and initiatives include: 6. All product-oriented methodologies adopt a life-cycle approach, except the Energy Star which focuses on the energy consumption in the use phase. 7. The results of carbon and energy footprint calculations obtained using the same measurement methodology are not comparable when carried out by a different practitioner. This is due to the fact that the calculation process in all methodologies leaves the freedom for many assumptions and methodological choices. 8. More detailed methodologies would help to align these assumptions by giving detailed guidance and requirements. However, even the ICT-specific methodologies, generally more detailed than the generic ones, still cover a very diverse sector with a lot of different goods and services so that individual guidance cannot be given within the methodology itself. 9. Product Category Rules (PCRs)9 could be more appropriate to specify detailed aspects for individual product groups, and can complement the methodologies. At the moment, valid PCRs exist for some ICT products (e.g. smartphones and Digital Home Media Centers) and components (e.g. memory). However, ICT services are not
8
EU Energy Star and EPEAT, being labelling schemes, have a specific approach on this point.
9
Set of specific rules, requirements and guidelines for developing environmental assessments for one or more product categories.
Towards an overall measurement methodology of the carbon and energy footprints of the | 17 ICT sector
Executive summary
currently addressed by PCRs. Harmonising the development and update of PCRs for ICT products, components and services, appears as an important next step. 10. Energy Star and EPEAT are different from the other analysed methodologies as they are labelling schemes. They focus on individual environmental criteria of the product (e.g. use of recycled content), and on the energy consumption in the use phase in the case of Energy Star. Harmonisation with the Energy Star evaluation methodology may nonetheless be relevant to support the assessment of the use phase of a product with a carbon footprint methodology. Key findings related to company-oriented methodologies and initiatives include: 11. All company-oriented methodologies and initiatives focus on scope 1 (direct GHG emissions) and scope 2 emissions (energy indirect GHG emissions). Scope 3 emissions (other indirect emissions) are optional in most cases. 12. Results of scope 1 and scope 2 emissions are easier to compare than scope 3 emissions. The latter include among others emissions from the whole supply chain and emissions caused by the use of sold goods and services, which can be very difficult to assess for ICT companies, given the complexity of supply chains and variety of use patterns of products. Here, the same effects (e.g. variability of assumptions) as for product assessments apply: the results are not intended for comparative analysis between different companies but can show the evolution of GHG emissions of a company over time in a perspective of monitoring and reduction.
Real costs, intangible benefits The objective of the second chapter of the report is to carry out a generic (i.e. not specific to the ICT sector) risk-benefit analysis of measuring and reporting GHG emissions at the company level. The analysis only covers company reporting, as this is more widespread than product reporting to date. This risk-benefit analysis is based on a literature review and on ICT stakeholders’ interviews. Three types of stakeholders were interviewed (see Table 1). Table 1: Number of organisations interviewed, by type Type of organisation
Number of organisations interviewed10
Standards Development Organisations (SDOs)
4
Industry associations
2
Individual companies
6
Note that, given the limited number of interviews that were carried out within the timeframe of the study, they do not constitute a statistical analysis and the information obtained are not to be considered as conclusions as such. They provide an ICT-specific point of comparison to the insight gained from the literature review. As only large
10
18 |
Some persons answered on behalf of different types of organisations, within a given interview.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Executive Summary
companies were interviewed, the feedback and opinions may not be shared by all types of companies. Furthermore, the scope of the quantified estimations of risks or benefits in the literature is different across the companies11 which makes aggregation of results difficult. Key findings on risks of GHG reporting at company level are summarised below: 1. Quantified estimations of risks related to GHG emissions measuring and reporting vary considerably. Factors of variation include the size and type of company, the scope and boundaries of the reporting, and other practical considerations such as the implementation of a verification scheme. The lack of company resources (i.e. time and money) and information for GHG emissions reporting (e.g. potential advantages, most suitable methodology to use) represent the most significant barrier to its voluntary uptake. In particular, SMEs may have a false impression of very high costs for them if they implemented GHG emissions reporting: given that large companies are reporting their GHG emissions more often than smaller companies, and given that their absolute measurement and reporting costs are much greater than the ones that would be incurred by a smaller company, the figures and feedback available are biased towards large companies reporting. 2. For a majority of companies, the annual costs due to GHG emissions reporting are expected to be less than 50 000 € (and less than 5 000 € for very small companies). The contrast of these costs with the significant costs indicated by an interviewee reporting their GHG emissions (1-2 Million USD) illustrates well the existing gap between costs for large (or very large) companies and costs for SMEs. 3. Many other risks relate to the methodological framework when measuring and reporting the GHG emissions, e.g. the difficulty to assess scope 3 emissions or the confusion due to the various existing methodologies. Working on this framework therefore is a priority in a perspective of fostering the implementation of GHG emissions measurement and reporting. Key findings on benefits of GHG reporting at company level include: 4. Quantified estimations of benefits related to GHG emissions measuring and reporting are almost non-existent in the literature. Interviewed stakeholders already voluntarily reporting their GHG emissions explain that most of the benefits are not tangible and cannot be quantified, even if cutting costs is identified as a potential benefit. The fact that the stakeholders have been implementing voluntary GHG reporting for several years suggests that there are some associated benefits. 5. The major non-tangible benefits identified in the literature and confirmed by interviewees include brand building and improving public/external reputation, increased transparency and better communication with stakeholders, cutting costs, and enabling to set targets for reduction of the environmental impact of the company. Given the lack of quantitative estimations of the benefits, no objective conclusion can be drawn on whether GHG emissions reporting represents a net cost or a net benefit for a company. Costs being very dependent upon the size and structure of the company
11
Different reporting scheme, types of companies considered, etc.
Towards an overall measurement methodology of the carbon and energy footprints of the | 19 ICT sector
Executive summary
(amongst other factors), and non tangible benefits being highly linked to the brand image and activities of the company, there is no doubt that the overall risk-benefit balance is unique to each reporting company, having its own ethics and priorities. The harmonisation of the methodological framework (in general or for the ICT sector) is expected to influence this balance and result in a higher level of uptake of voluntary GHG emissions reporting.
Policy scenarios: Pathways for action The objective of the last chapter is to define and develop preliminary considerations on potential policy measures by the EU, for the implementation of GHG emissions measurement and reporting at company level. In particular, discussions on how to define the methodological framework associated to policy measures are based on the methodologies and initiatives analysis made within the study. Stakeholders interviewed also gave their opinion about the policy scenarios12. Three policy scenarios for public GHG emissions reporting at company level are defined (see Table 2). Like for the risk-benefit analysis, all scenarios consider reporting at company level only. The analysed scenarios result from the combination of all possible levels of reporting obligation with all possible levels of mandatory methodological aspects. Three of these combinations are considered as not realistic and were not discussed. Table 2: Summary of the three studied scenarios
No mandatory methodological aspects Some mandatory methodological aspects Full mandatory methodology
Mandatory public reporting with binding targets
Voluntary public reporting
Mandatory public reporting
Business-as-Usual scenario
Sub-scenario II.a
Scenario I
Sub-scenario II.b
(Not realistic: setting binding targets would require a full mandatory methodology, for enforcement reasons)
(Not realistic: a full mandatory methodology would be too demanding and costly, in the context of voluntary reporting)
Sub-scenario II.c
Scenario III
For each policy scenario, general considerations are discussed regarding the following points: Basis and coverage of the policy measure, including the description of the policy objectives by type of stakeholders (e.g. companies, investors, supply chain);
12
20 |
Again, these opinions should not be considered as results of a statistical analysis.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Executive Summary
Ability to meet policy needs, e.g. regarding the expected level of implementation of reporting; Specific considerations related to the ICT sector, in particular regarding the methodological framework; Links with existing/planned measures; Required authorities’ resources for implementation, either at EU or national levels; and Description of different possible alternatives, based on practical elements (e.g. timeline of policy implementation, frequency of reporting, verification procedure). The discussion is complemented by a specific risk-benefit analysis, based on elements from the generic risk-benefit analysis, and by the methodological analysis. Key points regarding the policy scenario analysis are following: 1. Each scenario has its proper objectives (some of them, such as increasing the uptake of GHG emissions reporting, are common to all scenarios) and is meant to meet different policy needs. In particular, the level of reporting obligation (voluntary or mandatory) has a direct influence on the uptake of GHG emissions reporting, while the level of mandatory methodological aspects has an impact on the consistency across the reported GHG emissions. 2. To provide a minimum level of comparability and consistency of the disclosed information in Scenarios I and II.b, the methodological elements that have a critical influence on the quantitative outcomes of a GHG emissions assessment and on their interpretation should be defined and mandatory to follow. These are estimated to be: the system boundaries (and cut-off criteria), the reporting period and frequency, the data quality requirements, the considerations regarding carbon off-sets, and the reporting requirements (i.e. which specific data have to be provided by the companies and verification procedure). For Scenarios II.c and III, the most realistic methodological approach would consist of developing a complete tool, with associated databases, to ensure the comparability of results. 3. Policy measures should also take into account the links with existing measures at the EU or national levels, in order to optimise the resources and efforts to be made by the regulators and the industry. In particular, compatibility or harmonisation with existing mandatory reporting schemes in the UK or in France for instance would be a key issue. 4. Regarding the specific risk-benefit analysis, requirements become progressively more stringent and costs greater when increasing the level of reporting obligation and defining a methodological framework. On the other hand, the potential benefits are also greater. A thorough assessment of the policy measures would require defining practical considerations of the policy measure in detail (e.g. definition of size or emissions thresholds) and this was not feasible within the timeframe of the study. The methodological analysis led to the conclusion that the existing methodologies and initiatives provide a good basis for policy implementation to build upon and define more specific requirements when needed. Stakeholders interviewed support the “re-use” of the
Towards an overall measurement methodology of the carbon and energy footprints of the | 21 ICT sector
Executive summary
existing methodologies in potential policy measures, rather than the development of a fully new methodology, even if some amendments and complements may be needed. In particular, the binding targets in Scenario III would require a high level of comparability of the GHG emissions results (in order to use relevant performance indicators to set targets). Current methodologies would therefore have to be further completed or accompanied by additional guidance for such a scenario.
22 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter I: Introduction
Chapter I: Introduction This introductory chapter presents the objectives of the study, its scope, and common definitions which will be used throughout the report. These include: Definition of the Information and Communication Technology (ICT) sector; Definition of system boundaries; and Scope in terms of emission types, geographic coverage, and maturity of methodologies to be analysed.
1.1.
Objectives of the study
The main objective of this study is to provide an exhaustive analysis of methodologies and initiatives for measuring greenhouse gas (GHG) emissions and energy footprint for the ICT sector, provide a mapping of the most relevant ones, and propose a preliminary framework to cover the entire sector and its global operations (see Chapter II). A generic Risk-benefit analysis of GHG emissions reporting at the company level is also carried out (see Chapter III). Both financial and non-financial risks and benefits for reporting companies are investigated. Finally, different policy scenarios for GHG emissions reporting at company level are suggested and analysed (see Chapter IV), and the most appropriate methodological frameworks are presented for these scenarios. For each defined scenario, the risks and benefits associated with GHG emissions and energy reporting are presented.
1.2.
Scope of the study
The subject of carbon footprinting has been gaining importance during the past decade. This has resulted in the development of various initiatives and methodologies for estimating GHG emissions and energy footprint. A clear definition of the scope of the study is necessary to identify which methodologies and initiatives should be in the scope of this analysis. First of all, this analysis focuses on GHG emissions and energy reporting. Even if other environmental aspects of the ICT sector (resource depletion, waste generation and management, etc.) are important, they are not within the scope of this study. Secondly, one needs to distinguish between “methodologies” and “initiatives”. A distinction can be made as follows (ERM, 2010): A “methodology” is a technical guidance to calculate GHG emissions or energy footprint. In particular, it deals with the choice of reporting boundaries and emission factors.
Towards an overall measurement methodology of the carbon and energy footprints of the | 23 ICT sector
Chapter I: Introduction
An “initiative” defines the reporting format for GHG emissions or energy footprint data and may cover aspects such as public disclosure, target setting, emission reduction measures, assurance/verification requirements, benchmarking and league tables (and may also refer back to a specific “methodology” for some of these aspects). It may also include a reporting platform. The main difference is that while an initiative sets the reporting framework of the calculations, a methodology provides the technical guidance for performing the calculations. In this study, both methodologies and initiatives are analysed. As far as possible, these two aspects are distinguished clearly in order to ensure consistency in the comparative analysis. However, sometimes such distinction may not be possible, e.g. i.e. when an initiative also contains a methodology. Finally, the geographical perimeter of this study is kept global as the value chain of the ICT sector is spread worldwide. Given the objective of the study to identify the next steps towards a harmonised methodological framework, major methodologies and initiatives used in different countries will be investigated.
1.2.1.
Definition of the ICT sector
The OECD (2009) defines the ICT sector composed of manufacturing, trade, and service industries. Following is the guiding principle to determine whether an industry belongs to the sector13:
The production (goods and services) of a candidate industry must primarily be intended to fulfil or enable the function of information processing and communication by electronic means, including transmission and display.
Table 3 presents a comprehensive structure of the ICT sector and various sub-sectors it may contain.
13
24 |
In this report, the term « sector » implicitly refers to the ICT sector.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter I: Introduction
Table 3: The 2006-07 OECD ICT sector definition (based on ISIC Rev. 4)
Group
Class
Title ICT Manufacturing Industries
261
2610
Manufacture of electronic components and boards
262
2620
Manufacture of computers and peripheral equipment
263
2630
Manufacture of communication equipment
264
2640
Manufacture of consumer electronics
268
2680
Manufacture of magnetic and optical media ICT Trade Industries
465
4651
Wholesale of computers, computer peripheral equipment and software
4652
Wholesale of electronic and telecommunications equipment and parts ICT Services Industries
582
5820
Software publishing
611
6110
Wired telecommunications activities
612
6120
Wireless telecommunications activities
613
6130
Satellite telecommunications activities
619
6190
Other telecommunications activities
620
6201
Computer programming activities
6202
Computer consultancy and computer facilities management activities
6209
Other information technology and computer service activities
6311
Data processing, hosting and related activities
6312
Web portals
9511
Repair of computers and peripheral equipment
9512
Repair of communication equipment
631
951
It can be observed from the Table 3 that: The manufacturing industries are classified according to product groups: electronic components and boards; computers and peripheral equipment; communication equipment; consumer electronics; and magnetic and optical media. An alternative approach could be to classify them according to companies which manufacture components and intermediate goods (chips, electronic boards, etc.) or finished products (laptops, TVs, etc.).
Towards an overall measurement methodology of the carbon and energy footprints of the | 25 ICT sector
Chapter I: Introduction
Regarding ICT trade industries, both categories presented deal with trade of finished ICT products, split between computer-related products and telecommunications products. The breakdown is the same for repair activities. For the ICT service industries, a distinction could be made again between computer-related services (582 - software publishing; 620 - computer programming, consultancy and related activities; 631 - data processing, hosting and related activities; web portal) and telecommunications services (611 – wired; 612 – wireless; 613 – satellite; and 619 – other telecommunications activities). Generally, it can be noted that the industries constituting the sector have very different market structures, business models, and production processes. This heterogeneity thus represents one of the major challenges in identifying GHG emissions and energy footprint reporting methodologies which could cover the entire ICT sector in an appropriate and effective manner. Based on these considerations, Figure 3 below presents a simplified structure of the ICT sector. In particular, computer-related services include a wide range of activities (e.g. software development and publishing, system integration, and data hosting and processing). Manufacturing activities Components
Computer-related products
Telecommunications products
Other finished products (including consumer electronics)
Computer-related products
Telecommunications products
Other finished products (including consumer electronics)
Computer-related services
Telecommunications
Trade and repair activities
Service activities
Figure 3: Simplified structure of the ICT sector
1.2.2.
Emission scope
Most accounting approaches for estimating GHG emissions of a company distinguish different levels or scopes of emissions. For instance, a company directly emits GHG in a facility due to combustion processes in the production chain, and also consumes electricity which is indirectly responsible for GHG emissions at the electricity production plant. Different emissions scopes enable the tracking of their different nature and source. The following scope definitions are given in the GHG Protocol Corporate Standard (see Figure 4).
26 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter I: Introduction
Figure 4: Overview of GHG Protocol scopes and emissions across the value chain14 Scope 1 (Direct GHG emissions): These emissions occur from sources that are owned or controlled by the company, for example, emissions from combustion in boilers, furnaces, or vehicles; or emissions from chemical production in process equipment. GHG emissions not covered by the Kyoto Protocol (CFCs, NOx, etc.) are not included in scope 1. ICT services are not likely to have significant scope 1 emissions, while ICT manufacturing activities are expected to have similar machine tools and infrastructure as other manufacturing sectors and thus significant scope 1 emissions. Scope 2 (Indirect GHG emissions from the consumption of purchased electricity, heat, and steam): These include GHG emissions associated with the generation of the purchased electricity, heat and steam consumed by a company or otherwise brought into the organisational boundary of the company. Scope 2 emissions physically occur at the facility where electricity, heat, and steam are generated. Scope 2 emissions are expected to be of particular importance for some ICT service activities (e.g. data hosting, processing in data centres). Scope 3 (Other indirect GHG emissions): These emissions take into account all other indirect emissions which are a consequence of the activities of the company, but occur from sources not owned or controlled by the company. Some examples of scope 3 activities are extraction and production of purchased materials (components such as chips, printed circuit boards for manufacturing
14
Source: GHG Protocol Corporate Value Chain (Scope3) Accounting and Reporting Standard.
Towards an overall measurement methodology of the carbon and energy footprints of the | 27 ICT sector
Chapter I: Introduction
activities; ICT or other finished products used for the production of ICT services); construction of infrastructure and facilities; transportation of purchased fuels; and consumers’ use of the sold products and services (including use of equipment necessary to make use of the service). The definitions of the scopes according to the GHG Protocol will be used throughout the report. Normally, scope 1 and 2 emissions are reported under most initiatives and reporting of scope 3 emissions is usually optional. Methodologies which take into account only scope 1 and 2 emissions are easier to apply to ICT sector companies than the methodologies that include scope 3 emissions. The two main difficulties in calculating total emissions for the ICT sector are obtaining data from the long and complex supply chain, and measuring the energy consumption in use phase of sophisticated Information Technologies (IT) goods and services (i.e. definition of the allocation rules). That said, scope 3 emissions are accounted for in certain cases and can typically represent a major share of the overall company emissions for the ICT sector (CDP, 2011b). Thus, the initiatives and methodologies which only account for scope 1 and 2 emissions may not be sufficient to fully understand the GHG emissions of a company. In this study, scope 1, 2 and 3 emissions are investigated, but the initiatives and methodologies covering only scope 1 or only scope 1 and 2 emissions are not excluded. For goods and services, GHG emissions from different life cycle phases are taken into account (see Figure 5).
Figure 5: Life-cycle phases Raw material extraction: includes the processes required to extract from the environment the raw materials included in the product. Manufacturing: includes the industrial processes, transforming the raw materials into finished products. Distribution: includes the transportation of the product from the production site to sales location. Use: includes the utilisation of the product over its lifetime.
28 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter I: Introduction
End-of-life: includes the processes after the product has been disposed of (e.g. recycling, incineration, and disposal). Some variations can be observed in these definitions in different methodologies, given that there are no precise boundaries for these life-cycle phases. For example, some methodologies include the distribution phase in the manufacturing phase. Raw material extraction and manufacturing are also sometimes collectively called production phase. Life cycle assessment (LCA) is a commonly used technique to estimate the environmental impacts over the complete life cycle of products. Some initiatives may focus only on certain phases of the life cycle: for instance, in some labelling schemes (e.g. Energy Star), the energy consumption during the use phase only can represent an eligibility criterion. Such criteria are therefore not representative of the full carbon and energy footprint of a product over its life cycle. Furthermore, outcomes from different LCAs of the same ICT product (e.g. a desktop computer) can differ significantly. For instance, user behaviour modelling can have a significant influence on the use phase outcomes. In the context of this study, the methodologies covering the complete life cycle of products are considered, in order to take into account the whole supply chain of goods and services. It should be noted that LCA methodologies can also be used to carry out partial assessments (e.g. cradle-to-gate), thus the initiatives and methodologies that focus only on partial life cycle assessment are also investigated.
1.3.
Stakeholders’ interviews
In order to get direct opinions and feedback on GHG emissions reporting in practice, 10 interviews were conducted to complement the literature review (23 different organisations were invited for interview). Three types of stakeholders were interviewed: Standards Development Organisations - SDOs (4 organisations), industry associations (2 organisations) and individual companies (6 companies)15. The companies interviewed are not representative of the overall situation in the EU as only large companies were interviewed. The feedback and opinions presented may therefore not be shared by all types of companies. The interviews focused mostly on the aspects presented in Chapter III0(Risk-Benefit analysis) and Chapter IV (Policy Scenarios) of the report. In particular, stakeholders were asked about the GHG emissions reporting implemented by their organisation and direct experience on risks and benefits and provided their views on the policy scenarios proposed, developing the pros and cons of each scenario, and methodological considerations.
15
Some persons answered on behalf of different types of organisations, which is why the total number of stakeholders is larger than the total number of interviews.
Towards an overall measurement methodology of the carbon and energy footprints of the | 29 ICT sector
Chapter I: Introduction
1.4.
Report structure
The report consists of four chapters in addition to this introductory one. Chapter II provides the analysis and the mapping of methodologies and initiatives for measuring GHG emissions and energy footprint for the ICT sector. Chapter III covers the risk-benefit analysis of GHG emissions reporting at the company level. Chapter IV defines and discusses three different policy scenarios for GHG emissions reporting at the company level. Finally, Chapter V provides the conclusions drawn from the previous chapters. Annex A and B present detailed elements for the analysis of Chapter II. Annex C consists of a list of existing PCRs. Annex D is the interview guidance that was used for the stakeholders’ interviews. Annex E presents some EU product policies related to carbon and energy footprint, relevant to the ICT sector.
30 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Chapter II: Analysis of methodologies and initiatives for companies, goods and services This chapter presents a comparative assessment of existing methodologies and initiatives for GHG emissions accounting. As a first step, the relevant initiatives and methodologies are identified and presented (see section 2.1), along with case studies to illustrate their implementation. Fact sheets presenting salient features of each methodology/initiatives are included in Annex A where a detailed overview of each methodology/initiative is provided. These fact sheets form the basis of the comparative evaluation where main features, advantages, and limitations of methodologies are presented (see section 2.2). These fact sheets are also used to discuss Product Category Rules (PCR) (see section 2.3). Based on this comparative analysis, a mapping of the existing initiatives and methodologies is provided (see section 2.4), along with main conclusions (see section 2.5).
2.1.
Existing methodologies and initiatives
The different initiatives and methodologies focus on either company or product level assessment. A range of Product Carbon Footprint (PCF) standards are still under development (e.g. ISO/ DIS 1406716) or have recently been published (GHG Protocol Product Accounting and Reporting Standard, October 2011). Where draft versions were available for standards under development, these were also analysed when considered important for this study, e.g. ICT-specific (e.g. IEC TR 62725) or generic such as ISO/DIS 14067. The draft version of the Product Environmental Footprint Guide by the EC is not analysed in this study as it is neither specific for the ICT sector nor for carbon footprinting. Like the methodologies analysed in this study, it adopts a life-cycle approach, but shall not be used for the assessment of only one environmental impact category, to avoid burden-shifting. During the development of this guide, the recommendations given by other methodologies such as ISO 14044, ISO 14067, GHG Protocol Product Standard, BP X30-323, and PAS 2050 were taken into account but it is nevertheless intended as a stand-alone guide for Product Environmental Footprint studies. One example of a widely used initiative is the Carbon Disclosure Project (CDP). Different companies from the ICT sector already disclose their scope 1, 2 and 3 emissions using this framework. PCF labelling is not yet considered to be an important issue for ICT products at the European or international level, as this would require comparable results of the assessments. However, labelling initiatives such as EPEAT and the German Blue Angel ecolabel do take life-cycle considerations into account, and a labelling initiative which
16
DIS stands for Draft International Standard, Document date: 18.01.2012
Towards an overall measurement methodology of the carbon and energy footprints of the | 31 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
includes ICT products in its scope is currently under development in France (BP X30-323). As environmental labels are not the main scope of this study, only the ICT-specific labels EU Energy Star and EPEAT were selected for the analysis, although there are other important labels such as the EU Eco-label which include criteria for ICT products. Other complementary EU product policies relevant to the ICT sector are presented in Annex E. The presented methodologies can be generic or sector-specific. Even if most methodologies are generic, some of them can be adapted for the ICT sector, for example through guidelines. Regarding the ICT sector, the GHG Protocol offers a sector-specific tool for semiconductors and ongoing work aims to develop sectoral guidance for the GHG and energy reporting of ICT products and services. However, some ICT-specific standards have recently been published or are currently under development, often in close collaboration with industry associations and ICT companies. When choosing a methodology/initiative, it is very important to consider the main objective of the assessment, e.g. whether it is for identifying environmental hotspots, to improve a product through ecodesign, to support environmental labelling, or for wider communication and marketing. If the results need to be communicated to customers via public reporting, using reference assumptions and scenarios that are publicly available (e.g. use phase scenarios specified in Ecodesign preparatory studies) would increase the transparency of the analysis even if the individual usage scenario of the product is not accurately modelled. If the assessment is carried out for internal purposes (i.e. no external reporting) the assumptions and scenarios could be made as precisely as possible, to more closely match the specificities of the product.
2.1.1.
Selected initiatives and methodologies
In this first step, the scope is kept quite broad and generic methodologies/initiatives are also identified, in order to assess to what extent they could be used or adapted for the ICT sector. The overview of the methodologies and initiatives is presented in Table 4. A detailed description of each of these methodologies and initiatives can be found in Annex A. The following colour code is used throughout the report: Generic methodologies/initiatives for organisation environmental accounting in green ICT-specific methodologies/initiatives for organisation environmental accounting in yellow Generic methodologies/initiatives for product environmental assessments in blue ICT-specific methodologies/initiatives for product environmental assessment in orange
32 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Table 4: Major methodologies and initiatives17 Methodology/Initiative
Organisation
Version/date
Detailed analysis
GHG Protocol Corporate Accounting and Reporting Standard
GHG Protocol Initiative
Revised Edition (March 2004)
Table 41
GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard
GHG Protocol Initiative
September 2011
Table 42
ISO 14064 Greenhouse gases – Part 1: Specification with guidance at the organisation level for quantification and reporting of greenhouse gas emissions and removals
International Organisation for Standardisation
ISO 14064-1:2006
Table 43
Bilan Carbone®
Association Bilan Carbone (ABC)
Last version: v7 (April 2012)
Table 44
Carbon Disclosure Project
Non-profit organisation started in 2000
Recommendation ITU-T L.1420: Methodology for energy consumption and greenhouse gas emissions impact assessment of information and communication technologies in organisations18
International Telecommunication Union (ITU), Telecommunication Standardisation Sector (ITU-T)
L.1420(02/2012): Version 1.0
Table 46
ADEME: Assessing GHG emissions - Guidance for the ICT sector
ADEME (French Environment and Energy Management Agency), CIGREF (association of large French companies dealing with ICT thematics)
January 2012
Table 47
17
Table 45
The tables mentioned in the last column are in Annex A.
18
This recommendation covers two aspects: a) the assessment of environmental impact of ICT goods, networks and service used by a non-ICT organisation (“ICT in organisations”); and b) the assessment of the environmental impact of an ICT organisation (“ICT organisations”). In this report, if it is not explicitly mentioned which aspect is addressed, the description is valid for both aspects.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector | 33
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodology/Initiative
Organisation
Version/date
Detailed analysis
GHG Protocol Product Life Cycle Accounting and Reporting Standard
GHG Protocol Initiative
September 2011
Table 48
PAS 2050:2011 Specification for the assessment of the life cycle greenhouse gas emissions of goods and services
DEFRA (Department for Environment, Food and Rural Affairs, UK), DECC (Department of Energy and Climate Change, UK), BIS (Department for Business, Innovation and Skills, UK)
Revised version: September 2011
Table 49
ISO 14040/44: Environmental management – Life cycle assessment
International Organisation for Standardisation
ISO 14040: Second edition: 2006-07-01 ISO 14044: First edition: 2006-07-01
Table 50
ISO/DIS 14067: Carbon footprint of products – Requirements and guidelines for quantification and communication
International Organisation for Standardisation
Draft (Status: 201201-18)
Table 51
BP X30-323: General principles for an environmental communication on mass market products
AFNOR (French Standardisation Organisation) and ADEME (French Environment and Energy Management Agency)
June 2011
Table 52
MEErP 2011 – Methodology for Ecodesign of Energy-related Products
COWI Belgium sprl, Van Holsteijn en Kemna B.V. (VHK) prepared for the EC, DG ENTR
2011
Table 53
GHG Protocol Product Life Cycle Accounting and Reporting Standard ICT Sector Guidance: Chapter 3: Guide for assessing GHG emissions of Desktop Managed Services (DMS)
GHG Protocol Initiative
Draft v0.8 10/03/2012
Table 54
GHG Protocol Product Life Cycle Accounting and Reporting Standard ICT Sector Guidance: Chapter 2: Guide for assessing GHG emissions Telecommunications Network Services (TNS)
GHG Protocol Initiative
Draft v1.5 10/03/2012
Table 55
34 | Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodology/Initiative
Organisation
Version/date
Detailed analysis
TC 111/WG 4 – project IEC TR 62725 Ed.1 Quantification methodology of greenhouse gas emissions (CO2e) for electrical and electronic products and systems
International Electrotechnical Commissions, Technical Committee 111: Environmental Standardisation for Electrical and Electronic Products and Systems
Draft (Ed.1, distributed 13 July 2012)
Table 56
ETSI TS 103 199 V1.1.1 (2011-11), Environmental Engineering (EE); Life Cycle Assessment (LCA) of ICT equipment, networks and services; General methodology and common requirements
European Telecommunications Standards Institute (ETSI)
ETSI TS 103 199 V 1.1.1 (2011-11)
Table 57
ITU-T Rec L.1410 “Methodology for environmental impact assessment of information and communication technologies (ICT) goods, networks and services”
International Telecommunication Union (ITU), Telecommunication Standardisation Sector (ITU-T)
Draft version (confidential)19
Table 58
Product Attribute to Impact Algorithm (PAIA)
Massachusetts Institute of Technology Carnegie Mellon University University of California at Berkeley Arizona State University
iNEMI: Eco-Impact Evaluator for ICT Equipment
iNEMI International Electronics Manufacturing Initiative
Phase 2 (LCA Estimator Tool Development)
Table 60
EPEAT® (Electronic Product Environmental Assessment Tool)
US EPA
EPEAT® Computer/Display Criteria
Table 61
EU Energy Star
European Commission and US EPA
19
Table 59
Table 62
Final version of ITU-T L.1410 was published on August 31, 2012. As the project started early 2012, the draft version of ITU-T L.1410 was analysed instead.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector | 35
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
2.1.2.
Most common methodologies and initiatives
The sustainability and Corporate Social Responsibility (CSR) reports of leading ICT companies were screened in order to identify the most commonly used methodologies (see Table 5). Table 5: Methodologies used by ICT companies Company
Alcatel-Lucent
Company environmental accounting
Product environmental assessment
GHG Protocol series
Apple
Links
www.alcatellucent.com/sustainability/reporting.html ISO 14040/14044
www.apple.com/environment/reports/
BT
Climate Disclosure Standard Board, GHG Protocol series
www.btplc.com/Responsiblebusiness/Oursto ry/Sustainabilityreport/report/Bwless/direct/C O2/CO2rep.aspx
Cisco
GHG Protocol Corporate Standard, EPA Climate Leaders program
www.cisco.com/web/about/ac227/csr2011/do cs/CSR2011_environment.pdf
Dell
GHG Protocol Climate Leaders GHG Inventory Guidance
ISO 14040/14044
i.dell.com/sites/content/corporate/corpcomm/en/Documents/Dell_CR_Summary_Re port_FINAL.pdf i.dell.com/sites/content/corporate/corpcomm/en/Documents/dell-laptop-carbonfootprint-whitepaper.pdf
Fujitsu
ISO 14040/14044
Lenovo
GHG Protocol
Motorola
Nokia
GHG Protocol Corporate Standard Logistics: GHG Protocol Scope 3 Standard
Samsung
globalsp.ts.fujitsu.com/dmsp/Publications/pu blic/wp-LCA-PCF-ESPRIMO-E9900.pdf www.lenovo.com/social_responsibility/us/en/ FY2011_Lenovo_Sustainability_Report.pdf
ISO 14040/14044 PAS 2050
responsibility.motorolasolutions.com/index.p hp/environment/climate/prodcrbnftpt/
ISO 14040/14044
i.nokia.com/blob/view/-/261908/data/2//nokia-sustainability-report-2010-pdf.pdf
ISO 14064-1, IPCC Guidelines, and GHG Protocol are referenced
www.nokia.com/global/about-nokia/peopleand-planet/impact/products/products/ www.samsung.com/eu/sustainability/pdf/201 0Environmentalnsocialreport.pdf
Five case studies are analysed in order to identify the particular methodological issues of each case study. The focus is mainly on the process of conducting the environmental assessment, rather than on their results: Environmental assessment of ICT goods:
36 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
PCF, according to ISO 14040/14044, of a server and a desktop computer; and Environmental assessment according to the MEEuP21.
of
an
integrated
computer20,
Environmental assessment of ICT Services: Assessment, according to ISO 14040/14044, telecommunication service “Call & Surf”; and
of
a
Comparative analysis, according to ISO 14040/14044, of paper and online invoicing. Environmental performance of companies: Case study of a company carbon footprint based on information published in the company’s sustainability report, according to the GHG Protocol Corporate Standard. The case studies cover the following aspects: Objectives; Data gaps; Challenges; Key methodological findings; and Comparison with other methodologies. Because members of the project team took part in these case studies in cooperation with other project partners (except for the company-oriented case study), conclusions related to difficulties, concerns and methodological findings could be drawn and are reported here.
20
A desktop system in which the computer and computer display function as a single unit which receives its AC power through a single cable. 21
The Methodology for the Ecodesign of Energy-using Products (MEEuP) was developed in 2005 to allow investigating whether and which ecodesign requirements are appropriate for energy-using products under the Ecodesign Directive (2005/32/EC). In 2009, the scope of this Directive was extended (2012/125/EC) to energyrelated products and a new methodology was developed: the Methodology for the Ecodesign of Energyrelated Products (MEErP) (ec.europa.eu/enterprise/policies/sustainablebusiness/ecodesign/methodology/index_en.htm), see also Table 53.
Towards an overall measurement methodology of the carbon and energy footprints of the | 37 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Product-oriented case studies ISO 14040/14044 LCA of Server and Desktop at Fujitsu Technology Solutions Fujitsu Technology Solutions (Augsburg, Germany) undertook in 2010 an LCA study for desktop computers and servers to assess the GHG emissions caused by these products over their life cycle. The requirements of ISO 14040/14044 were followed when conducting this LCA. Fujitsu Technology Solutions published the results of their comprehensive LCA study as a White Paper. For a transparent understanding of the study, basic assumptions and scenarios, and a full study report would be needed as there are no stringent, unambiguous Product Category Rules (PCRs) to be followed and referenced. Data gaps: - Appropriate upstream LCA data is frequently missing: upon request, only a very limited number of suppliers (and only tier 1 suppliers22) are able to provide adequate carbon footprint data. - Comprehensive LCA data from suppliers for other environmental aspects than carbon footprint is not available. Challenges of the case study: - It became evident that many suppliers had problems with allocating environmental impacts of their production facilities to individual components they ship to their customers. Some suppliers stated only ranges of carbon footprint per component, indicating that a better allocation to individual products cannot be done. - The more convenient way (or sometimes feasible way) of compiling an LCA for a desktop computer is the use of a generic Life Cycle Inventory (LCI) database (such as Ecoinvent), which means LCAs of ICT products, as of today, are based on a very limited amount of “real” supplier data. - For server products the key challenge is to define an appropriate use scenario: power consumption under various loads is well known by a manufacturer, but real use patterns, in terms of workload, are difficult to predict. Although there are state-of-the-art power benchmarks in place, such as SPECpower_ssj2008 and the SAP server power benchmark, which standardise the measurement of power consumption under various loads, these benchmarks make no indication about typical load patterns. - Fujitsu Technology Solutions had to create their own scenario regarding use patterns, but the company’s own assumptions severely hamper comparability of Fujitsu’s results with any other server LCA. Fujitsu’s own conclusions to this project are as follows: (1) ISO 14040/14044 provides a solid basis for calculating CO2 footprints of goods and services.
22
38 |
“Tier 1 supplier” refers to a direct supplier of the company.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
(2) Availability of common international methodologies and databases is required to allow comparisons of footprints and labels. (3) Significant efforts are necessary today to analyse and calculate LCA and PCF of ICT products (project timeline was 8 months). Comparison with other methodologies regarding the data gaps and challenges of this case study: - The requirements from PAS2050 to obtain primary data from suppliers to cover at least 10% of the upstream emissions are very hard to fulfil, as data from suppliers is difficult to obtain. - Requirements of ISO/DIS 14067 (draft) and GHG Protocol Product Standard were fulfilled by these LCAs. - ICT-specific methodologies such as ETSI TS 103 199, IEC TR 62725 and the GHG Protocol ICT Sector Guidance define more specifically the aspects to be included, but some practical issues confronted during these LCAs (e.g. how to measure different load patterns of servers) are not addressed within these methodologies.
Environmental assessment of an integrated PC iameco An environmental assessment was conducted to compare the primary energy consumption and Carbon Footprint of two generations of the iameco. The iameco is an integrated PC with a wooden housing. It is made by the Irish SME MicroPro Computers. The design of iameco computers focuses on reparability, lifetime extensions and reuse. The environmental assessment does not follow an LCA or PCF methodology. The MEEuP EcoReport tool was applied for the assessment; therefore mainly secondary data was used in the assessment. Data gaps: - For the primary energy consumption calculation, the Liquid Crystal Display (LCD) was excluded to allow a comparison of both generations of iameco, based on KERP’s background datasets (KERP, 2006). Challenges of the case study: - The measurement of the energy consumption during the use phase of iameco II was carried out according to Energy Star Version 5.0. - It is evident from various environmental assessments that due to missing PCRs, Energy Star is referenced for the use phase. Although there seems to be some consistency between these studies, this could however be improved by presenting actual guidelines. Key methodological findings of this case study: - A life time extension means inevitably a higher primary energy consumption and carbon footprint per product. However, per year of use, any strategy for lifetime extension results
Towards an overall measurement methodology of the carbon and energy footprints of the | 39 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
in a reduction of primary energy consumption and carbon footprint. This effect is comparatively low, when the main environmental burden is caused by the use phase but increases with increasing impact of the manufacturing phase. - The assessment highlights the specific difficulties faced by Small and Medium Enterprises (SMEs) when conducting LCAs/environmental assessments, which includes: 1. Commercial databases and software tools are very expensive; 2. Data from suppliers is not available. Contrary to large companies, SMEs are not “relevant enough” clients for the suppliers to provide answers to their data inquiries. - “Although absolute values for balsa wood are comparatively low, it is not recommended for use in the personal computer. This is due to the fact, that it is mainly lumbered in tropical rainforests in South America, with no absolute proof of sustainable forest management. The carbon footprint does not reflect properly the conditions of forest management”: 1. This finding highlights the limitations of carbon footprinting when neglecting other environmental aspects. 2. These issues can be of different nature depending on the considered product. In this example, it is land use change; in other examples, they may be extensive water use or use of critical raw materials. - The primary energy consumption was calculated twice: once using the EuP EcoReport, and once with KERP data. The results of these two calculations deviate from each other due to different background data sets. This shows that the results depend on the choice of data sets, which are in many cases not transparently reported. Comparison with other methodologies regarding the data gaps and challenges of this case study: - The complete assessment is based on secondary data and therefore not compliant with most carbon footprint methodologies (such as ISO/ DIS 14067, GHG Protocol Product Standard and PAS 2050). - A parameterised model like PAIA or a simplified LCA tool such as the iNEMI impact evaluator could be useful for SMEs to make simplified environmental assessments.
40 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Service-oriented case studies A PCF Case Study “Call & Surf Comfort” in the German PCF Pilot Project The Deutsche Telekom conducted a PCF study for its service called “Call & Surf Comfort” in 2009 within the scope of the German PCF pilot project. ISO 14040 and ISO 14044 are applied as the basic methodological framework for determining the product carbon footprint. Furthermore, the results are presented in a manner based on the procedures developed and coordinated in the workshops of the PCF pilot project in Germany, and on experiences from PAS 2050 Guideline. In particular, the overall PCF results are broken down in to 5 life cycle stages which include: raw materials extraction, manufacturing, distribution/retail, consumer use and disposal/recycling. The study focuses on the electrical energy in the use phase which encompasses two levels: at the network infrastructure level and at the final consumer level. Data gaps: - Initially the study intended to take the production, distribution and end-of-life of the router into account. However, these life cycle phases of router were not considered eventually as the suppliers were unable to provide the required primary data within the timeline of the project. - A loss of air-conditioning cooling agents was not taken into account because of insufficient data. - Operational infrastructure, such as ventilation or rectifier technology, was not considered. Challenges of the case study: - The Deutsche Telekom as a network provider is able to collect data on the network infrastructure from its own network and otherwise has extensive experience to support its assumptions. Nevertheless, network and infrastructure are very complicated systems and any assumption is more or less uncertain. - Until now, production, maintenance and disposal of equipment in the network infrastructure have been hardly investigated. Such equipment includes for example Digital Subscriber Line Access Multiplexor (DSLAM), switches, routers, splitters, copper cables, and fibre cables. In this case study, they were also excluded because: 1) Capital equipment plays a negligible role; 2) Reconstruction of various areas of the network infrastructure was being undertaken during the timeline of this study. - The patterns of use have a significant impact on the PCF. In this case study, a sensitivity analysis regarding the intensity of usage was conducted. - There is limitation to the use of results of this study due to the fast changing products market. A legacy router was investigated in this case study whereas today’s routers offer an increasing number of features (e.g. integrated by Voice over IP - VoIP) which can influence the materials and energy usage. This aspect was also highlighted in the report.
Towards an overall measurement methodology of the carbon and energy footprints of the | 41 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Key methodological findings from this case study: - PCRs of specific products should be established. - In order to establish these PCRs, further coordination would be required between industry associations, network providers and others (e.g. users). - Standby power consumption data of routers from the EuP preparatory studies was used for the sensitivity analysis. This enabled to analyse the input uncertainty and data variability. Comparison with other methodologies regarding the data gaps and challenges of this case study: - The GHG Protocol ICT Sector Guidance – Telecommunication Networked Services (TNS) provides certain exemplary values of the energy consumption of operational infrastructure. These values can be used to screen the significance of operational infrastructure in the context of overall energy consumption. If the screening supports it, own values of energy consumption for operational infrastructure should be obtained. - A parameterised model like PAIA (see Table 59 for more information) is useful to present the technological differentiation. PAIA has investigated microchips and display. Such kind of models should be investigated more often at the component level. It is still recommended that the documentation of calculation and the uncertainty of these models should be provided at the same time.
A Comparative Analysis of Online Invoicing versus Paper Invoicing A comparative assessment of two invoicing systems (online invoicing system versus conventional paper invoicing by post) was carried out for the fixed network invoice of German Telecom (T-Com). The methodology applied in this study is ISO 14040/14044. An external independent peer review was conducted according to ISO 14040, because the results were intended to be made public and used in comparative assertions. Data gaps in this case study: - The pre-sorting process of paper invoices consumes energy. However, it was not considered in this assessment due to the lack of data. It can be argued that this is a conservative assumption, since neglecting this aspect benefits the paper invoicing system. - Fine particulates from the printer usage are an environmental aspect that was not investigated due to the lack of the corresponding data base. - Land use was not considered due to the data gaps. Challenges of the case study: - Different attributes of consumer behaviour were investigated. - Paper sorts (fresh versus recycled) and printing methods (single-sided versus doublesided) have an influence on the results. Hence these aspects were taken into account.
42 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
- Expanding the scope of product system to include the additional functions related to the co-products was applied in the modelling (e.g. paper recycling and cogeneration of electricity and heat). Key methodological findings of this case study: - A screening of the required data collection within the system boundary should be carried out before investigation. - Flows and processes that are cut-off from the analysis in this case study include: 1) Capital equipment, due to the negligible impact on results 2) Processes, products and services whose contribution to the Cumulated Energy Demand (CED) was less than 5%, were not considered 3) Production of domestic computer. - The critical review of this report highlights that the exclusion of production phase of computer which favours online invoicing is not justified. The authors of this study argue that consumers did not buy the home computers exclusively for online invoicing. The review panel argues that this assumption is not in line with the cut-off criteria of 5% cumulated energy demand, since as stated in the report, the production of computers accounts for between 10% and 20% of the overall energy consumption. However, it was proved that inclusion of the production phase of computers, at least for the CED, does not change the best option identified in the basic scenario and in scenario “without print-outs in online invoicing”. Comparison with other methodologies regarding the data gaps and challenges of this case study: - GHG Protocol ICT Sector Guidance – TNS, ETSI TS 103 199 and ITU-T L.1410 require that the embodied emissions associated with the upstream and downstream stages of the ICT equipment used in the delivery of the service should be taken into account. Furthermore, these emissions not only cover the customer domain (e.g. home computer) but also the service platform, i.e. the equipment used in the network infrastructure. The inclusion of the production of ICT equipment used in the network is a mandatory requirement of the ETSI methodology. - In addition, resource depletion and ecological toxicity were not assessed in this case study. The review panel indicated that if the domestic computer was included in the assessment, it would also burden these two environmental impacts. Although no methodologies refer to resource depletion or ecological toxicity as mandatory impacts, it is recommended to consider resource depletion in a LCA study, especially in a comparative analysis, since ICT products contain a large amount of metals including critical metals and rare earth elements. - The exclusion of environmental impacts, such as the land use and fine particulates, could have an influence on the results of this comparative analysis. In the opinion of the review panel, the inclusion of land use could burden the results of online invoicing system, while the inclusion of fine particulates could burden the results of paper invoicing system. It can
Towards an overall measurement methodology of the carbon and energy footprints of the | 43 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
thus be concluded that it is not sufficient to only assess a single environmental impact (often GWP) for a comparative analysis. Hence, it is recommended to include other relevant environmental impacts in a comparative LCA (as recommended by ISO 14040/14044 and ETSI TS 103 199).
Company-oriented case study Company Assessment: Sony Ericsson23 Sony Ericsson24 reports its scope 1 and 2 GHG emissions as well as emissions from logistics and business travel, which fall under scope 3 emissions. Sony Ericsson has set a goal to reduce its total GHG emissions by 2015 (absolute target), with 2008 being considered as the base year. Therefore, not only the recent year’s emissions are presented but also the figures from 2008. Emissions from logistics decreased in 2011, while emissions from manufacturing and Sony Ericsson offices (scopes 1 and 2) remain approximately the same. The drop in the logistics figures is partly due to a decreasing number of sold products (Sony Ericsson transformed to a “smartphone only” business which resulted in fewer low-end phones). Besides the company carbon footprint, product environmental assessments were also carried out according to ISO 14040/14044 and a critical review was conducted by a third party. Data gaps in this case study: - In the sustainability report, sources of data and any related issues are not described. It is however stated that scope 1 and 2 emissions are assessed according to the GHG Protocol Corporate Standard. Key methodological findings of this case study: - Only logistics and business travel emissions are reported in scope 3. This is common in company reports. Most companies do not report emissions caused by suppliers or by the products use which also fall under scope 3 emissions, even if the emissions due to product use are known in some cases (e.g. Sony claims to conduct LCAs of all products25).
23
Please note: the case study of Sony Erics0son is used as an example for an ICT company. The description is based completely on publications by Sony Ericsson and, different from the other case studies, the consortium of this study, has no further insight in the procedure when conduction the company CFP. 24
Website Sony Ericsson – Carbon Footprint: www.sonymobile.com/cws/corporate/company/sustainability/carbon-footprint#tab-1 Sony Ericsson Sustainability Report 2011: dl-www.sonymobile.com/cws/download/1/105/200/4/1329205969/SustainabilityReport2011.pdf 25
Website Sony Ericsson – Carbon Footprint: www.sonymobile.com/cws/corporate/company/sustainability/carbon-footprint#tab-1
44 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
- The results of the cell phones LCAs performed in this case study shows that the main share of the environmental impact comes from the component manufacturing stage (more than 50% of the overall life-cycle emissions). - The product environmental assessments also show that only about 4% of the life cycle emissions are caused by Sony Ericsson activities. Sony Ericsson activities and transport (which is not included in the Sony Ericsson activities) account for 11% to 18% of the mobile phone’s overall life cycle emissions. If this is transferred to the company’s GHG emissions, the reported scope 1, 2 and 3 emissions (logistics) are only a minor part of the overall GHG emissions of the complete scope 3 (including product use and supply chain). Comparison with other methodologies: - The requirements of the GHG Protocol Scope 3 Standard are not met as only emissions from business travel are reported. - Due to the limited amount of information on how the emissions were assessed, the comparison with other methodologies is not possible.
It is noted that most of the identified ICT companies assess the carbon footprint of their products. Some companies make assessments of only selected products while others assess a large range of products. The most quoted methodology in this context is ISO 14040/14044 (e.g. Apple26, Dell27, Motorola28, Nokia29, and Fujitsu30), because the ISO standards are internationally accepted and well known. Motorola states that their product environmental assessment fulfils the PAS 2050 requirements as well. Case studies which are based on other methodologies or initiatives, especially ICT-specific ones, could not be identified at the time of writing this report. In particular, the GHG Protocol Product Standard does not seem to be widely used. This could be because these documents are comparably recent or still under development (see Figure 6, ISO 14040/14044 first edition: 1997).
26
Apple: Product Environmental Reports; www.apple.com/environment/reports/
27
Dell: Carbon Footprint of a Typical Business Laptop From Dell; i.dell.com/sites/content/corporate/corpcomm/en/Documents/dell-laptop-carbon-footprint-whitepaper.pdf Carbon Footprint of a Typical Business Desktop From Dell; i.dell.com/sites/content/corporate/corpcomm/en/Documents/dell-desktop-carbon-footprint-whitepaper.pdf 28
Motorola: Products Carbon Footprint; responsibility.motorolasolutions.com/index.php/environment/climate/prodcrbnftpt/ 29
Nokia: Reducing the footprints of our products; www.nokia.com/global/about-nokia/people-andplanet/impact/products/products/ 30
Fujitsu: White Paper – Life Cycle Assessment and Product Carbon Footprint – Fujitsu ESPRIMO E9900 Desktop PC; globalsp.ts.fujitsu.com/dmsp/Publications/public/wp-LCA-PCF-ESPRIMO-E9900.pdf
Towards an overall measurement methodology of the carbon and energy footprints of the | 45 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Figure 6: History of methodology development Regarding the environmental accounting at company level, most of the analysed companies publish their scope 1 and 2 emissions and some also partly scope 3 emissions. However, contrary to the product environmental assessment, there is not one dominant methodology. Nokia reports scope 1, 2 and 3 emissions and states that this accounting follows the GHG Protocol Corporate Standard and that the new approach for logistics will fulfil the GHG Protocol Scope 3 Standard.31 Dell calculates the corporate-wide emissions using the GHG Protocol and the Climate Leaders GHG Inventory Guidance (scope 1 and 2, scope 3 only business air-travel).32 General conclusions from the case studies are: To obtain reliable and up-to-date input data is difficult, but this is an issue linked to a methodology itself. The methodologies can only give guidance on data quality requirements: almost all methodologies require the collection of primary data for processes under the company’s control. This can be difficult and costly for the company but it is generally possible. Getting primary data from suppliers is even more difficult, especially for practitioners within SMEs.
31
Nokia Sustainability Report 2010: i.nokia.com/blob/view/-/261908/data/2/-/nokia-sustainability-report-2010pdf.pdf 32
Dell: Achievements in corporate responsibility: fiscal year 2009, i.dell.com/sites/content/corporate/corpcomm/en/Documents/Dell_CR_Summary_Report_FINAL.pdf
46 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Requirements to obtain primary data for processes not under the company’s control can thus make the application of methodologies more difficult. The methodology practitioners prefer detailed guidelines. ICT-specific methodologies are more detailed than generic ones, where detailed instructions on measurement procedures and use scenarios are not provided. Detailed use phase scenarios for many individual product groups cannot be given by the methodology. But this could be addressed through PCRs (see section 2.3). To support the use of such additional PCRs, PCF methodologies should require, or at least recommend, the use of PCRs. Most companies publish scope 1 and 2 emissions, but due to the limited amount of information in their environmental reports, it was not possible to assess the methodological issues. Scope 3 emissions of a company (except for business travel) are reported much less frequently than scope 1 and 2 emissions. This is again primarily due to the difficulty in obtaining data from the suppliers which is needed to determine the upstream emissions.
2.2.
Comparative assessment
Selected methodologies are analysed here according to the following criteria: Application field General features Data types Usability Comparability Reliability Transparency Interaction
2.2.1.
Application field
For the analysis of the ICT-specific methodologies and initiatives, two levels can be distinguished: The scope level encompasses the aspects of life-cycle phases covered, impact categories assessed, etc. The sectoral level encompasses the aspects of industry sectors and product groups addressed.
Towards an overall measurement methodology of the carbon and energy footprints of the | 47 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
For the analysis of generic methodologies and initiatives, the focus is on the scope level. The sectoral level is only considered at a secondary level as the generic methodologies and initiatives do not focus on a specific sector.
2.2.1.1.
ICT-SPECIFIC INITIATIVES AND METHODOLOGIES
Common aspects and differences are summarised for ICT-specific product-oriented methodologies under section A, organisation-oriented methodologies under section B and product-oriented initiatives under section C. A) Product-oriented methodologies Common aspects of the methodologies are summarised below: At the scope level: All the seven product-oriented methodologies are based on the life-cycle thinking (i.e. cradle-to-grave). ISO14040/14044 is considered directly or indirectly as the main reference by the other methodologies. “Directly” means that it is explicitly documented in the description that methodologies are in accordance with ISO 14040 and ISO 14044 (e.g. ETSI TS 103 199). The link is considered “indirect” when ISO 14040/14044 is not explicitly mentioned, however, other mentioned references have an interrelationship with ISO 14040/14044, e.g. ISO 14064 and ISO/ DIS 14067, which are ISO 14040/14044 compatible, are mentioned as references in IEC TR 62725. The climate change indicator (or GWP) is the most common impact category amongst these methodologies. Even methodologies that cover other impact categories set specific focus on this indicator, e.g. ETSI TS 103 199 requires that GWP is mandatory, while other categories taken into account can be dependent on the practitioner’s decision. At the sectoral level: In product-oriented methodologies, the requirements are specified in terms of ICT goods, networks and services. Some of the methodologies and initiatives propose or require ready-to-use functional units. These are quite similar across the methodologies and differ between goods, networks and services. It is based on the fact that the functional unit is applicable to a product whose function can be quantitatively identified. It is summarised as below:
48 |
ICT goods: annual ICT equipment use, total ICT equipment use per lifetime of ICT equipment (based on ETSI TS 103 199, ITU-T L.1410, IEC TR62725), one minute
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
of use (e.g. phone call) (based on GHG Protocol ICT Sector Guidance – TNS);
ICT networks: annual network use per amount of users, or per transmitted data, or coverage area (based on ETSI TS 103 199, ITU-T L.1410), one megabyte of data transferred (based on IEC TR62725, GHG Protocol ICT Sector Guidance – TNS);
ICT services: annual service use (based on ETSI TS 103 199, ITU-T L.1410), Service Contract life (e.g. three years) (based on GHG Protocol ICT Sector Guidance – TNS).
Differences between the methodologies are summarised below: At the scope level: The requirements of the methodologies have different levels of detail: for instance, ETSI TS 103 199 clearly states which life cycle stages/unit processes are mandatory, recommended or optional, which is not the case of the other methodologies. There are different levels of detail in the analysed methodologies. For instance, PAIA intended to establish a parameterised model to assess environmental impact associated with certain key technical parameters. Hence, this approach enables to look specifically at the component level. Other methodologies are developed in view of overall assessment. ICT product-oriented methodologies have different levels of complexity. GHG Protocol ICT Sector Guidance – TNS for example assesses GHG emissions on the basis of orders of level of detail, e.g. detailed measurement using primary data sources, estimation using secondary data sources, and life-cycle stage ratio profiling. Depending on the complexity, efforts and time required for using the methodology also vary. At the sectoral level: Methodologies are developed for different purposes of analysis. ETSI TS 103 199 and ITU-T L.1410 can be applied not only for baseline analysis (identifying environmental footprint of ICT products themselves), but also for comparative analysis. The latter consist of comparisons between specific ICT equipment, networks, or services, or comparisons between ICT and reference (non-ICT) products systems.
Towards an overall measurement methodology of the carbon and energy footprints of the | 49 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
B) Organisation-oriented methodologies ADEME – ICT Sectoral Guidance and ITU-T L.1420 are methodologies to assess the environmental impact of ICT sector organisations as well as non-ICT organisations (“ICT in organisations”). Common aspects of these two methodologies are: At the scope level: Both of them indicate that scope 1 and scope 2 shall be included in the evaluation, while scope 3 is recommended but voluntary. Both are compatible with ISO 14064-1. At the sectoral level: Both require assessing GHG emissions over a defined time period, in order to identify the changes in ICT and non-ICT organisations. Both have similar sectors covered, even if they are described in a different way: for instance, sectors of ADEME – ICT Sectoral Guidance are defined as “data centres”, “user's working environment”, “human activities”, “logistics”, “network and telecommunication services”, and “outsourced services” while ITU-T L.1420 describes sectors based on the ICT goods, networks, and services used in an organisation (ICT in organisation) as well as total GHG emissions of an ICT organisation33. Following are the aspects which differ34 across these methodologies: At the scope level: According to ISO 14064-1, removal of GHG emissions shall be separately documented and carbon offset shall not be taken into account. ADEME – ICT Sectoral Guidance follows this approach and is thus compatible with ISO 14064-1. However, according to ITU-T L.1420, both GHG emissions removal and offset shall not be considered. ITU-T L.1420 assesses not only GHG emissions but also secondary energy consumption35 in ICT and non-ICT organisations. ADEME – ICT Sectoral Guidance focuses merely on GHG emissions.
33
According to ITU-T L.1420, an ICT organisation is an organisation, the core activity of which is directly related to the design, production, promotion, sales or maintenance of ICT goods, networks or services. 34
At this point, it is important to mention that differences occur partially due to the nature of the document. For instance, ITU-T L.1420 is a methodology while ADEME – ICT Sectoral Guidance is rather a complementary guidance to other company environmental accounting methodologies. 35
Compared to primary energy, which is the energy embodied in natural resources, secondary energy is energy which has been refined from primary energy, such as electricity or refined fuels.
50 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
At the sectoral level: In ADEME – ICT Sectoral Guidance, GHG emissions reporting at organisation level is not expected to be comparative, whereas in ITU-T L.1420, if the intention is to conduct a comparative analysis (e.g. comparisons of energy consumption or GHG emissions over time), requirements in Part II of ITU-T L.1410 needs to be met. C) Product-oriented initiatives The only ICT-specific initiative assessed in this study is EPEAT. It is a tool to evaluate the environmental performance of electronic products throughout their life cycle. The outcome of this rating system is a label characterised by Bronze, Silver and Gold according to three tiers of environmental performance. Under this scheme, there is no quantification of the environmental impacts. However, all covered products shall comply with the U.S. Energy Star which defines the threshold of energy consumption in the use phase. Another specific feature is that the criteria of this rating system addresses not only product, such as recycling rate of materials, but also corporate reporting, such as annually declared end-oflife (EoL) management and corporate performance. Compared to the other nine ICT methodologies, this ICT initiative is widely applied.
2.2.1.2.
GENERIC INITIATIVES AND METHODOLOGIES
General features of the non ICT-specific initiatives and methodologies reviewed are summarised below.
A) Product-oriented methodologies Common aspects of these methodologies are discussed below: At the scope level: All five product-oriented methodologies are based on the life cycle thinking approach (i.e. cradle-to-grave). For intermediate products36, the methodologies recommend cradle-to-gate analyses. ISO 14040/14044 is considered directly or indirectly as the main reference for these methodologies. All generic methodologies are based on the basic LCA principles defined by these ISO standards. Climate change (or GWP) is the most important impact category in these methodologies.
At the sectoral level:
36
Intermediate products are products used as input in the production of other goods. As an example from the ICT sector, a CPU is an intermediate product used as input for the end-user product computer.
Towards an overall measurement methodology of the carbon and energy footprints of the | 51 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
All of the product-oriented methodologies cover goods as well as services. Aspects which differ between the methodologies are discussed here at the scope and sectoral levels: At the scope level: Regarding reporting requirements, PAS 2050 does not require reporting at all, GHG Protocol Product Standard has detailed reporting requirements and the ISO 14040/14044 requirements on reporting depend on the goal and scope (e.g. more detailed requirements for comparative analyses). The level of detail varies between the methodologies. ISO 14040/14044 has very general requirements with a lot of details depending on the goal and scope of the individual study, while other methodologies give more details about aspects to consider and analyse. Methodologies can be developed for different purposes of analysis. For example, PAS 2050 and ISO 14040/14044 are designed for comparative analyses; GHG Protocol Product Standard is intended only for comparisons of a given product over time and not for comparisons between different products. Only ISO 14040/14044 and BP X30-323 cover other environmental impacts than GHG emissions. However, whereas GWP is mandatory in BP X30-323, other impact categories are optional (and depend on the PCR). For ISO 14040/14044, the impact categories to analyse depend on the goal and scope definition. At the sectoral level: Two of the generic methodologies do have more specific guidelines or PCRs for the ICT sector: BP X30-323 (e.g. PCR for televisions) and the GHG Protocol Product Standard (with the ICT Sector Guidance). The other methodologies do not provide guidelines for adapting specifically to the ICT sector.
B) Organisation-oriented methodologies Bilan Carbone®, GHG Protocol Corporate Standard and ISO 14064 are generic methodologies for company GHG emissions accounting. The GHG Protocol Scope 3 standard should be used only in connection with the GHG Protocol Corporate Standard and focuses on the Scope 3 emissions which are optional under the GHG Protocol Corporate Standard. Common aspects of the methodologies are:
52 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
At the scope level: The assessment of scope 1 and 2 emissions is mandatory according to the methodologies. Offsets should be excluded. However, according to the GHG Protocol standards, they can be separately reported. Aspects which are different between the methodologies are the following: At the scope level: The assessment of scope 3 emission is optional according to GHG Protocol Corporate Standard and ISO 14064. With the recommended “global approach” of the Bilan Carbone®, scope 3 emissions are included.
C) Organisation-oriented initiatives The only generic initiative assessed in this study is the Carbon Disclosure Project (CDP). In this project, companies can disclose their GHG emissions and water use37. CDP is not ICTspecific, but many companies from the ICT sector already disclose their scope 1, 2 and 3 emissions. The response rate seems quite high within the IT sector (76%)38 as well as the telecommunication sector (70%)39 (but lower than for other sectors though). An issue while applying existing non-ICT specific initiatives is with the use of different assumptions, system boundaries and cut-off criteria for reporting, even under the same initiative. CDP encourages companies to assess the GHG emissions in accordance with the GHG Protocol Corporate Standard. This gives a baseline for a comparable methodology used within CDP, but it is not mandatory. ISO 14040/14044 and PAS 2050 are also referred. To ensure that the verification activities undertaken by companies are broadly comparable, CDP recommends a review of the results, awards extra points for verification when completed according to recognised verification standards, and lists a number of standards which can or cannot be used.40 Within the reporting under CDP, it is specified which methodologies are used by each company, e.g. Cisco Systems Inc. uses the GHG Protocol Standards and reports scope 1, 2, and 3 emissions. For compliance verification, ISO 14064-3 is used.
37
Water use is not analysed further in this study.
38
CDP; Information Technology sector report Covering Global 500, S&P 500 and FTSE 350 respondents: “Global 500, S&P 500 and FTSE 350 response rate: Information Technology overall: 76% (92 of 121)” 39
CDP; Telecommunications sector report Covering Global 500, S&P 500 and FTSE 350 respondents: “Global 500, S&P 500 and FTSE 350 response rate: Telecommunications overall: 70% (28 of 40)” 40
CDP: recognised verification standards: https://www.cdproject.net/en-US/Respond/Pages/verificationstandards.aspx
Towards an overall measurement methodology of the carbon and energy footprints of the | 53 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
2.2.2.
General features
The general features and the scope of the different methodologies are analysed in this section. A detailed description of these aspects for each methodology can be found in Annex B, Table 63 and Table 64.
2.2.2.1.
CUT-OFF CRITERIA
Cut-off criteria are defined in ISO 14040 as “specification of the amount of material or energy flow or the level of environmental significance associated with unit processes or product system to be excluded from a study”. Cut-off criteria can be based on mass, energy or environmental significance. Whereas mass and energy criteria are relatively easy to use, the overall environmental impact needs to be known in advance, in order to apply cut-off based on environmental significance. To calculate the overall impact, either a quick screening analysis has to be carried out in advance (to have an order of magnitude) or information from similar, published LCAs/Carbon footprints can be used. Cut-off criteria solely based on mass do not seem relevant for ICT products. The actual electronics parts may have a comparably low weight but a high environmental impact. According to an assessment of the iameco integrated computer (see case study in section 2.1.2) the printed circuit board assembly accounts for about 30% of the GHG emissions (of the material extraction and production phase), while representing only 5% of the product mass. Therefore, most methodologies recommend that cut-off criteria should be based on a combination of mass, energy, and environmental significance. However, most methodologies do not define quantitative cut-off criteria, but suggest that the effect of the cut-off criteria on the results should be described and if necessary analysed in the sensitivity analysis. BP X30-323 requires the cut-off criteria to be based on mass, energy and environmental relevancy. It states that flows which account for less than 5% of the baseline for these three items can be neglected. PAS 2050 does not describe cutoff criteria directly, but at least 95% of the life-cycle GHG emissions have to be included. As discussed earlier, to base cut-off criteria on environmental significance, an order of magnitude of the overall impact is needed in advance. Therefore, a screening analysis can be conducted. According to the GHG Protocol ICT Sector Guidance, when the emissions due to an item are less than 5% of the total emissions according to the screening assessment, then a detailed assessment for that element is not required and the values from the screening assessment can be used. The sum of the emissions calculated in this way should not exceed 20% of the total emissions. Although this is not exactly a cut-off criterion, the approach seems very useful.
54 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
2.2.2.2.
ALLOCATION RULES
Allocation consists of “partitioning the input or output flows of a process or a product system between the product system under study and one or more other product systems” according to ISO 14040. A) Product-oriented methodologies It is generally agreed that allocation should be avoided as far as possible. If it cannot be avoided, allocation should be done according to relevant physical or economic values. PAS 2050 is the only methodology giving preference to allocation according to economic criteria over physical properties (e.g. mass, calorific value). Detailed allocation examples for specific products are given by the GHG Protocol ICT Sector Guidance as this guidance has a more specific application field. For different “shared components” (e.g. Local Area Network - LAN, Wide Area Network - WAN, servers and Personal Computers - PCs), recommended allocation methods are listed by the GHG Protocol ICT Sector Guidance – DMS. In most cases it is recommended to allocate based on the percentage of processing time and/or data volume. According to the GHG Protocol ICT Sector Guidance – TNS, apportionment may be based on the following examples: Usage based apportionment, e.g. number of subscribers or amount of data; Provisioned capacity (ports or bandwidth); Mean traffic across a network / equipment. ETSI TS 103 199 gives allocation requirements for networks as: “Impact from shared network resources (e.g. transmission equipment, core nodes and data centres) shall be allocated to an access network based on data traffic”. For services, the requirements are similar to those recommended by GHG Protocol ICT Sector Guidance – DMS: Active use time; Data traffic/bandwidth; Number of subscriptions and service users or amount of data/transactions. Similarly, ITU-T L.1410 provides recommendations to deal with allocation of environmental load of wired and wireless networks as well as with core network and terminal equipment. These allocation requirements are very sophisticated as this information is often not known and the methodologies give no indication on how to obtain it. For instance, it is not clear how “processing time” (the time an application needs to be processed on a server) should be assigned to a service when different services are hosted in parallel on the same server or different virtual servers are hosted on one physical server. At this point, the methodologies show requirements for the allocation of data, but more research is needed so that these requirements can be actually applied.
Towards an overall measurement methodology of the carbon and energy footprints of the | 55 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
B) Organisation-oriented methodologies For company level environmental accounting, the question of allocation also refers to which organisation certain emissions should be allocated when a facility is owned by more than one organisation and to which scope they apply. The GHG Protocol standards differentiate between three approaches: equity share, financial control, and operational control. Depending on the chosen approach, it can vary whether some emissions are considered as scope 1 or scope 3. ISO 14064-1 differentiates between financial or operational control. If a facility is controlled by different organisations, all organisations should use the same approach. This is useful to not over- or underestimate emissions from a facility, but difficult to enforce when different organisations conduct their GHG emissions assessment independently.
2.2.2.3.
RENEWABLE ENERGY
Treating renewable energy in PCF is a methodological issue, and can be illustrated by the example of “green” electricity. For instance, in Germany, the existing electricity mix includes some electricity from renewable sources since a long time, e.g. hydropower plants. All electricity that is produced from renewable sources is initially included for accounting purposes in the overall electricity mix. However, purchased green electricity should be included separately in the PCF if this green electricity creates an additional environmental benefit. This involves first checking whether the separately purchased green electricity is new (i.e. it comes from newly built plants and not, for example, from existing hydropower plants) and how “new” green power plants are defined. Secondly, one must verify that the “new” green electricity has been produced through an additional and separately paid-for measure and not as the result of a government requirement or feed-in tariff. Thirdly, in the case of a separate assessment, there can be a double-counting issue, because under some national regulations, separately supplied green electricity is also included in the national electricity mix figures (Griesshammer & Hochfeld, 2009). The question of biogenic emissions is not addressed by all methodologies. GHG Protocol standards require a separate reporting of biogenic emission and renewable energy. Bilan Carbone® excludes GHG emissions from the combustion of biomass completely. PAS 2050 specifies that separately supplied green electricity (with or without additional environmental benefit) must not be counted. However, if renewable energy from an organisation’s own production site is used (without influencing the national grid mix), the reduced emission factors for renewable energy can be used. The separate reporting of renewable energy is useful for the interpretation of results. Along with the reporting of emission factors, it can enhance the understanding of the assessment, e.g. in which cases lower GHG emissions are caused by actual production efficiency or by lower emission factor/higher share of renewable energy. On the other hand, such reporting may not induce purchase of renewable energy in the perspective of lower GHG emissions.
56 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
2.2.2.4.
TIME SCOPE
Time scope refers to the frequency at which data or assessments have to be updated. A) Product-oriented methodologies For product analyses, the assessment period depends on the duration of use for the different products and is therefore not determined by the different methodologies. Regarding the age of the data, no specifications are given, but at least a few methodologies (ISO/ DIS 14067, BP X30-323) recommend specifications of PCRs on this point. B) Organisation-oriented methodologies For company environmental accounting, the assessment period is normally one year across the different methodologies.
2.2.3.
Data types
There are diverse data types and categories defined in the methodologies and initiatives assessed in this study. This section provides an overview of the different data categories and terms defined. Table 6 summarises the relevant definitions and data terms based on the corresponding methodologies. Table 6: Data definitions from different methodologies Methodology
Definitions and terms
GHG Protocol Corporate Standard
The terms company-specific and site-specific data are used but not defined.
GHG Protocol Scope 3 Standard
Primary data: Data from specific activities within a company’s value chain. Activity data: A quantitative measure of a level of activity that results in GHG emissions. Activity data is multiplied by an emissions factor to derive the GHG emissions associated with a process or an operation. Examples of activity data include kilowatt-hours of electricity used, quantity of fuel used, output of a process, hours equipment is operated, distance travelled, and floor area of a building. Secondary data: Data that is not from specific activities within a company’s value chain.
ISO 14064-1
GHG relevant activity data: quantitative measure for activities leading to emission or removal of GHG. Examples for GHG relevant activity data are amount of used energy, fuel or electricity, produced material, provided service or land area.
ITU-T L.1420
Primary data are process-specific data obtained by direct measurement of the energy consumption or business activity. Activity data: A quantitative measure of a level of activity that results in GHG emissions. Activity data is multiplied by an emission factor to derive the GHG emissions associated with a process or an operation. Examples of activity data include kilowatt-hours of electricity used, volume of fuel used, output of a process, hours a piece of equipment is operated, distance travelled and area of building. For
Towards an overall measurement methodology of the carbon and energy footprints of the | 57 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodology
Definitions and terms scope 1 and 2 activity data, primary data applies. Secondary data are non-process specific data obtained from external sources other than direct measurement of the energy consumption or business activity.
GHG Protocol Product Standard
Primary data are collected from specific processes of the product’s life cycle. Primary data can be process activity data (physical measures of a process that results in GHG emissions or removals), direct emissions data (determined through direct monitoring, stoichiometry, mass balance, or similar methods) from a specific site, or data that is averaged across all sites that contain the specific process. Primary data can be measured or modelled, as long as the result is specific to the process in the product’s life cycle. It is important to note that using the reference flow of the product (e.g. mass of finished product) as process activity data is not considered primary data. Emission factors are GHG emissions per unit of activity data. There are two categories of activity data: process activity data and financial activity data. Process activity data are physical measures of a process that results in GHG emissions or removals. Financial activity data are monetary measures of a process that results in GHG emissions. Secondary data are defined as data that are not from specific processes in the product's life cycle. Secondary data can come from external sources (e.g. life-cycle databases and industry associations) or can be data from another process or activity within the concerned company or supplier that is used as a proxy for a process in the inventory of product’s life cycle.
PAS 2050
Primary activity data is quantitative measurement of activity from a product’s life cycle that, when multiplied by the appropriate emission factor, determines the GHG emissions arising from a process. Secondary data is obtained from sources other than direct measurement of the emissions from processes included in the life cycle of the product.
ISO 14040/14044
The terms "primary data", "specific data" and "generic data" are used, but they are not defined in the methodology.
ISO/ DIS 14067
Primary data is the quantified value of a unit process (3.4.6) or an activity within the product system (3.4.2) obtained from a direct measurement or a calculation based on direct measurements at its original source. Site-specific data is obtained from a direct measurement or a calculation based on direct measurement at its original source within the product system (3.4.2). Sitespecific data refers to direct GHG emissions, activity data or emission factors. All site-specific data are “primary data” (3.7.1) but not all primary data are sitespecific data because they may also relate to a different product system (3.4.2). Site-average data are the representative averages of site-specific data collected from organisations within the product system which operate equivalent processes. Secondary data is obtained from sources other than a direct measurement or a calculation based on direct measurements at the original source within the product system (3.4.2).
IEC TR 62725
Primary data is collected from specific processes in the product’s life cycle [GHG Protocol Product standard] Secondary data is obtained from sources other than a direct measurement and a
58 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodology
Definitions and terms calculation based on direct measurements at the original source within the product system (e.g. databases, published literature, national inventories and other generic sources)
ETSI TS 103 199
Primary data is the quantified value of a unit process or an activity within the product system obtained from a direct measurement or a calculation based on direct measurements at its original source. NOTE 1: In practice, primary data may be emission factors and/or activity data. NOTE 2: Primary data includes site-specific data, i.e. data from one specific unit process within a site; and site-average data, i.e. representative averages of sitespecific data collected from organisations within the product system which operate equivalent processes. Secondary data is quantified value of a unit process or an activity within the product system obtained from sources other than direct measurement at its original source. Specific data is the data emerging from ICT specific applications and processes. NOTE: This data could be either primary or secondary. Generic data is the data from any relevant source which need not be specific for ICT applications and processes. NOTE: Generic data are always secondary.
ITU-T L.1410
Primary data is the quantified value of a unit process or an activity within the product system obtained from a direct measurement or a calculation based on direct measurements at its original data source. In practice primary data may be emission factors and/or activity data. Secondary data is the quantified value of a unit process or an activity within the product system obtained from sources other than direct measurements at its original source. Such sources can include databases, published literature, national inventories, and other generic sources.
Following common data definitions can be observed: “Data” in general refers to activity data and/or emission factor. Primary data refers to data which is specific to the product system investigated. It is directly measured or calculated based on direct measurement All site-specific data is primary data. Primary data is however not always sitespecific. Site-specific data can also be used to determine site-average data. Secondary data always refer to the data obtained from sources other than direct measurement at its original source. Secondary data can come from external sources, such as life-cycle databases41 and industry associations. Generic data is always a secondary data.
41
E.g. the public database from the EU: lca.jrc.ec.europa.eu/lcainfohub/datasetArea.vm
Towards an overall measurement methodology of the carbon and energy footprints of the | 59 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Generic data can be obtained from any relevant data source which need not be specific for the applications and processes under investigation. Currently, definitions of data types, such as site-specific data, specific data, site-average data and average data are not always the same in different methodologies, hence leading to confusion and possible misinterpretation among practitioners. There is however only minor differences in these definitions across the methodologies as shown in Table 6. Thus, there is a need to undertake a harmonisation of these definitions. Differences between studies do not only result from different assumptions but also from the use of different databases. Concerning primary/site-specific data, differences of the data should reflect actual differences in the manufacturing processes/product. Therefore, even when the data quality may differ, the preference for primary data mentioned by most methodologies is reasonable. PAS 2050 and GHG Protocol standards require primary data for processes under the control of the organisation carrying out the study. Despite the fact that data acquisition could be difficult, getting data of processes under the organisation’s control seems feasible. PAS 2050 additionally requires primary data from suppliers if the processes under the organisations control account for less than 10% of the upstream emissions.42 For manufacturers of end-user products with very little in-house production and a broad supply chain, this requirement can be difficult to fulfil. Data quality shall be specified to enable the goal and scope of an evaluation to be met according to ISO 14040/14044. In other words, the type and detail of data used in the assessment shall be in accordance with the intended application. For a baseline analysis of a specific ICT product or for a comparative analysis between two different ICT products, data associated with high environmental relevance should be primary. If an LCA is conducted to compare ICT products with a reference system (e.g. video-conferencing vs. business travel), secondary data is suitable, with a preference for an average ICT specific database. Published primary data also helps to generate, evaluate and improve generic databases. When using secondary data, important differences in the overall results can result from the different data sets used for upstream processes (e.g. data for precious metals and highpurity materials). The use of these data sets is not always transparent in the published results. Public data sets for upstream processes (e.g. raw material acquisition) and some additional modules (e.g. transport and electricity) would help to improve the transparency and overall comparability. However, this is an issue which cannot be directly addressed by the methodologies as they can only recommend using public and/or reviewed data when available.
42
PAS 2050 (2011): “Where the organisation implementing this PAS does not contribute 10% or more to the upstream GHG emissions of the product or input prior to its provision to another organisation or to the end user, the collection of primary activity data shall apply to the emissions arising from those processes owned, operated or controlled by the organisation and any upstream supplier(s) that cumulatively contribute 10% or more to the upstream GHG emissions of the product or input.”
60 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Parameterised methodologies like PAIA could be useful for screening assessment when a full-fledged carbon footprint analysis is not needed, without compromising on reliability of results. The parameters adopted should reflect the technological differentiation and progress in processes. In addition, it is also important that these parameters should be relatively easy for LCA/PCF practitioners to obtain with no constraints on business confidential information.
2.2.4.
Usability
“Usability” refers to aspects such as understandability of the text, supported by tables, figures and flow charts. The following scale is used to compare the usability. Table 7: Scoring for the aspect usability Criteria 1) Tools
Description Incorporates additional information, calculation tools, databases, templates and default values
Score
– / o / + / ++
Subjective 2) Languages
Not in English
–
English only
o
Additional languages
+
3) Easy to understand text
Subjective
–/o/+
4) Flow charts and figures
Subjective
–/o/+
5) Examples
No
–
Yes, generic
+
Yes, ICT-specific
++
The Table 8 below shows the semi-quantitative evaluation of usability of different methodologies and initiatives. A detailed description of the aspects leading to these scores can be found in Annex B, Table 65 and Table 66.
Towards an overall measurement methodology of the carbon and energy footprints of the | 61 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Table 8: Evaluation according to the usability criteria Methodology/ initiative
1) Tools
2) Languages
3) Text is easy to understand
4) Flow charts & figures
5) Examples
GHG Protocol Corporate Standard
++
+
+
+
+
GHG Protocol Scope 3 Standard
++
o
+
+
+
ISO 14064-1
–
+
o
–
–
Bilan Carbone®
+
+
+
+
+
CDP
0
+
+
o
++
ITU-T L.1420
0
o
+
o
+
++
–
+
+
++
++
o
+
+
ICT sector guidance
PAS 2050
+
+
+
+
+
ISO 14040/14044
–
+
+
+
–
ISO/ DIS 14067
–
+
o
o
–
BP X30-323
+
+
+
+
+
MEErP
++
o
o
o
++
GHG Protocol Product Standard: DMS
o43
o
+
+
++
GHG Protocol Product Standard: TNS
o44
o
+
+
++
IEC TR 62725
+
o
o
–
–
ETSI TS 103 199
+
o
+
+
++
ADEME – ICT Sectoral Guidance GHG Protocol Product Standard
++
Regarding overall practicality, ETSI TS 103 199 allows to claim “partial compliance” if the majority but not all requirements can be fulfilled due to issues such as data gaps.
43
This score is based on the different level of detail available in the methodologies which are compared within the same scheme. For the GHG Protocol Product Standard, the existence of the GHG Protocol ICT Sector Guidance led (among other factors) to the score “++”. As the GHG Protocol ICT Sector Guidance is evaluated separately the score is set to “o” because there is no additional tool for the GHG Protocol ICT Sector Guidance itself. 44
62 |
Same comment as for the cell above.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodology/ initiative
1) Tools
2) Languages
3) Text is easy to understand
4) Flow charts & figures
+
+
5) Examples
+
o
PAIA
++
o
Not evaluable, since there is not a complete description of the methodology
iNEMI
++
o
Not evaluable, since there is no published document
EPEAT
n.a.
o
+
+
++
Energy Star
n.a.
+
+
o
++
ITU-T L.1410
++
1) Tools Some methodologies offer actual tools, which calculate emissions based on user entries. A good example of this is the GHG Protocol Corporate Standard, which even offers a tool to calculate the emissions of semiconductor wafer manufacturing. Other tools, such as for assessing uncertainty and emissions of stationary combustion, can be used even though they are not ICT-specific tools. The MEErP methodology offers with the EcoReport a tool which can be used for simplified LCAs. Different datasets are given within this tool and the revised version provides the user with the possibility to include own additional datasets. Bilan Carbone® offers calculation tools as well, but only when taking part in the training lessons. This might be hindering a wide dissemination, but could improve overall quality of the resulting study as the individuals conducting the analyses use the tools in the same way. ADEME’s ICT Sectoral Guidance does not offer any tools as such but secondary data, which is very helpful when conducting a study. 2) Languages Most documents are available in English to facilitate their use at the international level. The only exception is ADEME – ICT Sectoral Guidance which is available only in French. ISO standards benefit from a wide dissemination because they are internationally accepted, published in three languages and often adapted into national standards and thus further translated. The EU Energy Star website is available in many different languages, but the related documents and criteria for the different product groups are only available in English. 3) Easy to understand text, flow charts and figures, and examples Most methodologies use flow charts and examples, to improve the understandability, but ICT-relevant examples are only found in ICT-specific methodologies and CDP (disclosure reports by ICT companies). The documentation is presented in long documents, which are time consuming to read. But these long documents are often better prepared in terms of understandability than ISO documents which are quite brief. Some documents, such as the GHG Protocol series, indicate very clearly (e.g. by colour coding) which parts are normative and which are informative which thereby improves the readability. Absence of examples in
Towards an overall measurement methodology of the carbon and energy footprints of the | 63 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
ISO 14040/14044 is a result of the rule which forbids the use of examples in standardisation texts.
2.2.5.
Comparability of results
The aspect “comparability” analyses how different methodological choices are addressed in the different methodologies which could enhance or hinder the comparability of the results. The following scoring scales are used for this aspect: Table 9: Scoring for the aspect comparability Criteria 1) Scope
Description
Score
Product environmental assessment Partial life cycle coverage
–
Complete life cycle
+
Company environmental accounting
2) Supply chain
3) GHG covered
4) Characterisation factors
5) Offset
6) Other environmental impacts 7) Possible comparisons of results according to the
64 |
Scope 1 + 2
o
Scope 3 optional
+
Scope 3 mandatory
++
Inclusion of supply chain not required
–
Supply chain is addressed indirectly by the life cycle phases “manufacturing” and “raw material acquisition”
0
Direct requirements on how to assess the impact of the supply chain
+
“Only” emissions covered by the Kyoto protocol
o
All/most IPCC emissions
+
Not specified/others/not mandatory
o
IPCC
+
Included
–
Excluded
+
No
–
Yes
+
Over time
o
Product comparison (within the context of one single study)
+
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Criteria
Description
methodology itself
Labelling (product comparison between separate assessments)
8) Guideline to set reduction targets
9) Do requirements on functional unit (FU)/reference flow (RF) make a comparison possible between different assessments made using the methodology? 10) PCRs
Score ++
Not defined
–
Defined, no further requirements
o
Defined, describing the requirements or absolute/relative reduction
+
Product environmental assessment No
–
Yes, to some extent
+
Yes, there are specifications by PCR
++
Product environmental assessment No recommendation
–
Recommendation for usage (not mandatory)
o
Mandatory use
+
Developed within the methodology
++
Table 9 below shows for different methodologies and initiatives a semi-quantitative evaluation of the comparability of their results. A detailed description of aspects leading to these scores can be found in Annex B, Table 67/Table 68 (organisation-oriented) and Table 69/Table 70 (product-oriented).
Towards an overall measurement methodology of the carbon and energy footprints of the | 65 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Table 10: Evaluation according to the comparability criteria Methodology/ initiative
GHG Protocol Corporate Standard
1) Scope
2) Supply chain
3) GHG
4) Characterisatio n factors
5) Offset
6) Other environmental impacts
7) Comparison of results
8) Guidelines to set reduction targets
9) FU/RF
10) PCR
+
+
o
+
+
–
o
+
n.a.
n.a.
++
+
o
+
+
–
o
+
n.a.
n.a.
ISO 14064-1
+
–
o
o
+
–
o
–
n.a.
n.a.
Bilan Carbone®
+
+
+
+
+
–
o
+
n.a.
n.a.
CDP
+
–
o
o
+
+
o
+
n.a.
n.a.
ITU-T L.1420
+
+
+
+
+
–
o
+
n.a.
n.a.
ADEME – ICT Sectoral Guidance
++
–
+
+
+
–
+
0
n.a.
n.a.
GHG Protocol Product Standard
+
o
o
+
+
–
o
o
+
o
PAS 2050
–
+
+
+
+
–
+
–
+
+
ISO 14040/14044
+
o
o
o
+
+
+
–
+
o
ISO/ DIS 14067
+
o
+
+
+
–
o
–
++
+
BP X30-323
+
o
+
+
+
+
++
–
++
++
GHG Protocol Scope 3 Standard
66 | Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodology/ initiative
1) Scope
2) Supply chain
3) GHG
4) Characterisatio n factors
5) Offset
6) Other environmental impacts
7) Comparison of results
8) Guidelines to set reduction targets
9) FU/RF
10) PCR
MEErP
+
o
o
+
+
+
+
+
+
–
GHG Protocol Product Standard: DMS
+
+
o
+
+
–
o
+
+
o
GHG Protocol Product Standard: TNS
+
+
o
+
+
–
o
o
+
o
IEC TR 62725
+
+
o
+
o
–
+
–
+
o
ETSI TS 103 199
+
o
+
+
+
+
+
+
+
–
ITU-T L.1410
+
o
+
+
+
–
+
–
+
–
PAIA
+
o
No information
+
+
–
+
n.a.
++
n.a.
iNEMI
+
+
+
–
o
n.a.
EPEAT
n.a.
+
n.a.
n.a.
n.a.
+
++
n.a.
n.a.
n.a.
–
–
n.a.
n.a.
n.a.
–
++
–
n.a.
++
Energy Star
No information
No information
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector | 67
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
1) Scope Company environmental accounting For the company environmental accounting, the scope definitions of the GHG Protocol Corporate Standard are used (see section 1.2.2). Most organisation-oriented methodologies focus on scopes 1 and 2. It enables to evaluate the contribution of the company’s direct activities (e.g. assembly of final products, transport and manufacturing processes) to its overall GHG emissions. Environmental impacts caused by up- and downstream emissions are not displayed. These are included in scope 3 emissions which are optional in most of the methodologies. When scope 3 emissions are optional, the guidelines vary across the different methodologies. For instance, ISO 14064-1 only provides a short list of possible scope 3 emissions in the annex, while the GHG Protocol has the specific GHG Protocol Scope 3 Standard as a complement to the GHG Protocol Corporate Standard which gives detailed guidance and requirements on how to report scope 3 emissions. In Figure 7 and Figure 8, it can be seen that for the IT sector, the main share of the GHG emissions are in scope 3, whereas for the telecommunications, the scope 2 emissions make up the main part. Looking at absolute figures, the scope 2 emissions of the IT and telecommunications sector disclosed within CDP are in the same range.
Figure 7: Information Technology sector emissions disclosure (t CO2-e) (source: CDP, 2011b)
68 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Figure 8: Telecommunications sector emissions disclosure (t CO2-e) (source: CDP, 2011c) Within the IT sector, scope 1 and 2 emissions are disclosed much more often than scope 3 emissions, as the two main difficulties for scope 3 inclusion are an appropriate indication of the supply chain/production of pre-products and the use phase of IT products and services (see Figure 9). Despite this, the overall amount of disclosed scope 3 emissions is a lot higher than scope 1 and 2 put together. These figures illustrate that initiatives and methodologies which only ask for scope 1 and 2 emissions are not sufficient to determine the overall impact of the ICT sector.
Figure 9: Information Technology emissions disclosure (t CO2-e) (source: CDP, 2010)
Product environmental assessment Most methodologies and initiatives have the whole life cycle in focus. For intermediate products, cradle-to-gate analyses are also covered by their requirements. This is useful as such cradle-to-gate analyses can be used for further analyses of final products and increase their data availability and quality of results. On the other hand, partial analysis (e.g. individual life cycle stage) for final products can be useful, when in accordance with the objective of the LCA. ISO/ DIS 14067 and PAS 2050 do focus on the complete life cycle, nevertheless cradle-to-gate analysis (PAS 2050) and partial PCFs (ISO/ DIS 14067) are also allowed.
2) Supply chain The inclusion of the supply chain is important when conducting a GHG assessment on company as well as on product level.
Towards an overall measurement methodology of the carbon and energy footprints of the | 69 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Company environmental accounting At organisational level, the supply chain is addressed by the scope 3 emissions. This is optional for most methodologies as described earlier. CDP has a supply chain program with the aim of extending awareness of an organisation’s carbon footprint beyond the measurement of direct GHG emissions. Some of the companies requesting their suppliers to provide information to CDP Supply Chain in 2011 are Acer, Dell, IBM, Juniper Networks, Nokia-Siemens Networks, Philips Electronics N.V. and the Vodafone Group. For this supply chain program, the CDP is moving towards a sectoral approach. Furthermore, an ICT-specific questionnaire exists,45 which should be completed by companies falling under “Information Technology” and “Telecommunications”. Product environmental assessment At product level, the supply chain can be directly or indirectly addressed. Indirectly means that the production phase is generally included in the product environmental assessment by the life cycle phases “raw material acquisition” and “manufacturing” which mostly require secondary data. Directly means that when conducting a product environmental assessment, suppliers should be directly contacted to obtain primary data for upstream emissions and material composition. All of the product-oriented methodologies address the supply chain at least indirectly within the life cycle or cradle-to-gate analyses. Primary data is mostly only required for processes under the organisations control. However, some methodologies require or recommend direct inclusion of the supply chain. The IEC TR 62725 encourages communicating with direct suppliers on possible supplychain cooperation for primary data. PAS 2050 even requires obtaining primary data from the suppliers if processes under their own control account for less than 10% of the upstream emissions. Thereby it should be ensured that at least 10% of the cradle-to-gate emissions are based on primary data.
3/4) GHG covered/Characterisation factors All methodologies (except the ones giving no details at all) require the 100 year time horizon for GWP. Most of them recommend or require the values given by Intergovernmental Panel on Climate Change (IPCC). Even for studies which do not specify that point (e.g. studies conducted following ISO 14040/14044), IPCC values for 100 year time horizon are generally used. So comparability is ensured regarding this point. Differences exist regarding the selection of GHG though. Some methodologies require that all GHG for which IPCC characterisation factors exist be covered, while others focus on the six GHG covered by the Kyoto Protocol, which are CO2, CH4, N2O, SF6, PFCs
45
“Investor CDP 2012 Information Request – Information & Communications Technology“, https://www.cdproject.net/CDP%20Questionaire%20Documents/Investor-CDP-2012-Information-RequestICTSector.pdf
70 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
(perfluorocarbons) and HFCs (hydrofluorocarbons) (if additional gases are assessed, they should be reported separately). Although the assessment of these six gases will cover the major share of emissions, this may not be detailed enough for some industries. NF3, a GHG not covered by the Kyoto Protocol, has a very high GWP of 17,60046. This gas is widely used in the semiconductor and display industry and therefore relevant for the ICT sector. The GHG Protocol Corporate Standards even lists NF3 as emission source in wafer manufacturing (although the GHG Protocol Corporate Standard normally focuses on the Kyoto gases only). According to a report of the voluntary agreement of the semiconductor manufacturer in Germany to “reduce the emissions of certain fluorinated greenhouse gases” (ZVEI, 2011), NF3 made up between 1.5% (1999) to 8.2% (2005) of direct PFC, SF6 and NF3 emissions (in CO2 equivalents). Therefore, regarding the selection of GHG, a harmonisation within the ICT sector would be useful. Another topic which comes up, is the question if and how to account for NOx in GHG assessment. There is no mention of a characterisation factor for NOx in IPCC47, but some methodologies (e.g. ETSI TS 103 199) require that NOx emissions to air be taken into account for climate change.
5) Offsets Company environmental accounting Offsets are excluded from company environmental accounting by all analysed methodologies. For company environmental accounting, the offsets can be directly allocated to a specific company. For comparative aspects, it is good when offsets are excluded or reported separately. On the one hand, GHG offsets should not be incorporated in the overall figures as this is misleading and it may not be visible from the outside which reductions reflect direct improvement of the product or the company and which reductions are due to offsets. On the other hand, if a company does invest in offsets, this can be described separately in company reports.
46
Changes in Atmospheric Constituents and in Radiative Forcing. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4-wg1-chapter2.pdf 47
“Due to the lack of agreement even on the sign of the global mean GWP for NOx among the different studies and the omission of the nitrate aerosol effect, a central estimate for the 100-year GWP for NOx is not presented.” Changes in Atmospheric Constituents and in Radiative Forcing. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4-wg1-chapter2.pdf
Towards an overall measurement methodology of the carbon and energy footprints of the | 71 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Taking Nokia as an example, the company invests in “Gold Standard offsets” and reports them in their sustainability report48. The figures are presented separately, but the net scope 2 emissions are calculated by taking the offsets into account. Product environmental assessment Offsets are excluded from product environmental assessment by most methodologies. This is important when comparing results. Especially regarding product environmental assessment, the allocation of offsets, which are established or purchased by a company, to a product would be very difficult and does not reflect any improvements of the product over its life cycle.
6) Other environmental impacts One aspect which can be used for differentiation is the consideration of other environmental impact(s). For GHG/energy accounting, both methodologies which are specific for carbon footprinting and more general LCA methodologies can be used. In case of ISO 14040/14044 is not focused on GHG assessment, therefore it is not specified in the methodology which GHG should be covered and which characterisation factors should be used. However, most methodologies on GHG assessment do specify that point. Carbon-specific methodologies and initiatives also mention that decisions based on GHG emissions assessments alone can be detrimental to other environmental impacts. The ETSI methodology and BP X30-323 also have a wider scope regarding the impact categories, but climate change is the only mandatory impact category.
7) Comparison of results Company environmental accounting None of the organisation-oriented methodologies is intended for comparisons between different companies, but in most cases for comparison over time and internal strategy development. At company level, there are several conflicting aspects regarding comparability over time: Absolute comparisons: Improvements during manufacturing can be outweighed by increase in number of products sold; Decrease in scope 1 or 2 emissions can be caused by outsourcing and thus may not reflect actual improvements.
48
Nokia’s Sustainability Report 2010: i.nokia.com/blob/view/-/261908/data/2/-/nokia-sustainability-report2010-pdf.pdf%20s.%20144
72 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Relative comparisons: Comparison per business volume: with increasing/decreasing prices, actual changes of the emissions will not be visible; Comparison per number of sold products: if the share of sold products changes over the product portfolio, actual changes will not be visible. As the different comparison options have advantages and disadvantages, a transparent reporting is necessary. Some methodologies (e.g. GHG Protocol Corporate Standard) define when a recalculation of the baseline year is necessary. A recalculation can be needed due to changes of the methodology or major datasets but also due to structural changes of the company (e.g. outsourcing). If structural changes only shift emissions between scope 1 and scope 3 (and scope 3 emissions have been reported before), no recalculation is needed. Product environmental assessment Comparability between products within one study Some documents (e.g. GHG Protocol standards) warn the practitioner that results should not be used for product comparisons. If the analyses are done by the same practitioners with the same parameters and assumptions, results of two assessments that are made within one single study may be comparable (comparative LCA). However, each practitioner uses different data sets, system boundaries, assumptions, etc. which are usually not transparent for the reader. Therefore, the numerical results across different studies are generally not comparable. But still, hot spots, drivers and the approach of the study can be compared. If a company wants to compare its product with a competitive product, the fact that the own product and its manufacturing is better known than that of the competitive product can be hindering for a reliable comparison but a comparison with an average product may be useful. Some methodologies such as ISO 14040/14044, PAS 2050, ETSI TS 103 199 and ITU-T L.1410 are applicable for product comparisons and contain specific guidelines to do such comparative LCA. Thereby comparisons between two (or more) different products or between different product systems are one possible use of the methodology. According to ISO 14040/14044 (and ETSI TS 103 199 and ITU-T L.14010 which often refer to ISO 14040/14044) the requirements regarding reporting as well as critical review are much stronger for comparative studies. Finally, the ecolabels Energy Star and EPEAT clearly define criteria which are specifically intended for product comparisons. They consequently allow consistent comparisons without any individual assumption by practitioners. Comparability between studies The requirements of generic methodologies and initiatives are defined in an open way compared to ICT-specific ones. This allows freedom of choice when conducting an analysis
Towards an overall measurement methodology of the carbon and energy footprints of the | 73 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
and the possibility to make very specific assumptions for each product assessed. At the same time, the individual assumptions may lead to a lower comparability. As generic methodologies cannot give detailed guidance for each sector or product group, sector guidance and product category rules (PCR) are a way to define common rules and thus to reduce the differences between studies. Depending on the product group covered, assumptions can be specified for the whole group. They could be used to define consistent system boundaries and cut-off criteria for ICT, specifications regarding the use phase of different products and further details. Such guidance can be developed by the standardisation organisation itself or by other organisations, e.g. industry associations, which have profound knowledge of the specific sector or product group. The GHG Protocol Initiative is already taking this approach and has developed together with experts from academia and industry user guidelines for ICT sector (still in draft version, see Table 54 and Table 55). However, the sole existence of PCRs does not necessarily lead to their use. The practitioners of the analysis may find the PCR not suitable for their specific product or may find it easier to make their own assumptions. To actually promote PCRs, their use should be required by the generic methodologies as it is done within PAS 2050. This methodology requires the use of PCRs (when existing) or a statement describing the reasons why the use of PCR is not suitable. Similar requirements exist in ISO 14025 and ISO/ DIS 14067. At the same time, PAS 2050 names requirements for the development of PCRs. Such an approach will increase the comparability of different studies on the long term. Already following this way is BP x30-323, which is designed for carbon labelling with detailed specifications in individual PCRs. However, comparisons of results across different studies via labelling are still a widely debated topic in the EU and strong differences exist in the expert community and Member States (MS) regarding the role and feasibility of carbon labelling. Comparability over time Comparisons over time are useful at product and company level and are recommended by most methodologies. Therefore a so-called baseline year has to be defined which will be used for comparison in the following years. Comparisons of different product generations can reflect improvements or an increase in energy consumption in the use phase, manufacturing and raw material consumption. For such comparisons, absolute emissions per product unit should be compared. Intensity of emissions based on a defined functional unit can give a false impression. For instance, if the GHG emissions of a TV are based on the screen size, this can lead to decreased intensity emissions for a new generation TV with a larger screen although the absolute emissions are higher. Such differentiations are often not visible for the end-user. An issue at both product and company levels is that improvements of the databases by obtaining more appropriate or reliable data can affect the results of the assessment (positive or negative) without actual changes to the product's life cycle or company's emissions. In these cases, a recalculation of the base year is necessary.
74 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Changes in regional electricity mixes (e.g. from the expansion of renewable energies) can also result in visible changes of the overall result without other changes in the production/product's life cycle. However, in this case, this reflects actual changes in the emissions and energy footprint, so a recalculation of the base year results is not necessary.
8) Reduction targets Reduction targets are proposed by some methodologies for company level environmental accounting and also by ETSI TS 103 199 which focuses on product environmental assessment. Regarding absolute or relative reduction targets, the same aspects as discussed above for comparisons over time apply. The MEErP methodology aims at developing and evaluating ecodesign options for the product groups assessed. Although these are not directly reduction targets, reduction options can be shown and quantified with the methodology.
9) Functional unit/Reference flow Company environmental accounting Functional unit is not needed for company level environmental accounting. Product environmental assessment Regarding the functional unit, most methodologies (even when ICT-specific) are too generic when it comes to defining a functional unit. The requirements given in most cases are not sufficient to create a comparable functional unit across different studies. Only the GHG Protocol ICT Sector Guidance names a few very specific aspects which should be considered when defining a functional unit but it does not conclude on specific requirements. More helpful regarding the comparability is the reference to PCRs as given by BP X30-323. For product environmental assessments, it is common to use “one product” as functional unit. Although this does not directly reflect the actual function, together with a related use pattern, the requirements for a functional unit are fulfilled. For services, which are also covered by product methodologies, the definition of a functional unit is more difficult. Regarding PAS 2050, the appropriate reporting unit may be established on the basis of time or event. This can serve as a baseline definition, but is not detailed enough for ICT services. For ICT services, aspects such as service-level agreements (SLA) and quality of service aspects (QoS) have to be taken into account.
Towards an overall measurement methodology of the carbon and energy footprints of the | 75 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
10) PCRs Company environmental accounting At organisation level, PCRs are not needed directly as the requirements to assess scope 1 and 2 emissions do not directly differ from other industries. Regarding scope 3 emissions, PCRs can help to assess the environmental impact caused by upstream emissions and the use of the product. In this case, the PCRs and the methodology would be product-oriented. Product environmental assessment PCRs help to define similar system boundaries, use phase scenarios and assumptions within one product group (see also section 2.3). But the mere existence of PCRs does not lead to their use. Therefore it is necessary that PCF methodologies recommend or even require the use of PCRs. PAS 2050, ISO/DIS 14067 and BP X30-323 are methodologies which require the use of PCRs when existing and give specific guidelines how a useful PCR should be developed. IEC TR 62725 states that it may be used to prepare PCR for each product category in the EEE sector, even if it does not require the use of PCRs (recommendation only).
76 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
2.2.6.
Reliability of results
Regarding the reliability of the results, the comparison focuses on the requirements for critical review and uncertainty/sensitivity analyses. The following scoring scale will be used to compare the reliability: Table 11: Scoring for the aspect reliability Criteria
Description
1) Critical review required
No, not mandatory
–
Yes, mandatory by internal review panel
+
Yes, mandatory by external review panel
++
2) Uncertainty/sensitivity analysis required
Score
No, not mandatory
–
Yes, mandatory
+
The Table 12 below shows the semi-quantitative evaluation of reliability for various methodologies and initiatives. A detailed description of aspects leading to these scores can be found in Annex B, Table 71 and Table 72.
Table 12: Evaluation according to the reliability criteria Methodology/ initiative
1) Critical review
2) Uncertainty/ sensitivity
GHG Protocol Corporate Standard
–
–
GHG Protocol Scope 3 Standard
–
–
ISO 14064-1
–
–
Bilan Carbone®
–
+
CDP
–
+
ITU-T L.1420
–
+49
ADEME – ICT Sectoral Guidance
–
+
GHG Protocol Product Standard
+
+
49
It is only mentioned in the description of evaluation of energy consumption and GHG emissions of ICT organisations.
Towards an overall measurement methodology of the carbon and energy footprints of the | 77 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodology/ initiative
1) Critical review
2) Uncertainty/ sensitivity
PAS 2050
+
–
ISO 14040/14044
++
+
ISO/ DIS 14067
++
+
BP X30-323
++
+
MEErP
–
+
GHG Protocol Product Standard: DMS
+
+
GHG Protocol Product Standard: TNS
+
+
IEC TR 62725
+
+
ETSI TS 103 199
++
+
ITU-T L.1410
++
+
PAIA
++
+
iNEMI
n.a.
n.a.
EPEAT
Self-declaration with after-market verification
n.a.
Self-declaration
n.a.
Energy Star
1) Critical Review A critical review may increase the reliability of GHG emission studies. Critical reviews can be conducted internally (first party) or externally (third party). Both reviews have generally the ability to give useful feedback and to judge the quality of an analysis, but third party reviews are normally more accepted for public communication. Product environmental assessment All product-oriented methodologies require an internal or external review. ISO 14040/14044 even requires a review panel with members of different organisations for comparative public studies. Company environmental accounting Most organisation-oriented methodologies do not require a review. Of course, a review is always mentioned as optional. The CDP initiative also in particular recommends an external review when company GHG emissions are disclosed. To ensure that the
78 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
verification activities undertaken by companies are broadly comparable, CDP awards extra points when verification is completed according to recognised verification standards and lists a number of standards which can or cannot be used.50
2) Uncertainty/Sensitivity Uncertainty and/or sensitivity analyses should be conducted, according to most methodologies. They are helpful to understand the main drivers of the result and analyse the effect of certain assumptions and scenarios. The specific requirements regarding the uncertainty/sensitivity analyses differ between the methodologies (e.g. focus on data uncertainties, scenarios and system boundaries) and often depend on the goal and scope of the specific study.
Default values (not scored) Some methodologies offer default values or secondary data to calculate GHG emissions. According to the GHG Protocol, the tools offered are consistent with those proposed by the IPCC for compilation of emissions at the national level and are reviewed by experts from science and industry. Also ADEME – ICT Sectoral Guidance offers secondary data which can be used for the GHG accounting. The MEErP methodology offers with the EcoReport Tool a calculation tool with predefined data sets. The secondary data in the tool was reviewed by a stakeholder expert group.
Development (not scored) Many methodologies are developed together with experts from industry or public consultation. For instance, GHG Protocol standards are developed in working groups with industry members, academia and experts from standardisation organisations such as ISO. Some methodologies are even completely developed by the industry, e.g. the Eco-Impact Evaluator for ICT by iNEMI.
2.2.7.
Transparency of results and assumptions
The aspect of transparency evaluates the different requirements on reporting/documentation. It can be differentiated by optional and mandatory information requirements. In this context, documentation refers to internal references and documents needed for verification upon request, while reporting refers to making documents publicly available. The following scoring scale will be used to compare the transparency:
50
CDP: recognized verification standards: https://www.cdproject.net/en-US/Respond/Pages/verificationstandards.aspx
Towards an overall measurement methodology of the carbon and energy footprints of the | 79 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Table 13: Scoring for the aspect transparency Criteria
Description
1) Public reporting or documentation required
No requirements
–
Documentation
o
Public reporting
+
Public reporting and internal documentation available on request
++
1.a) to 1.h) Eight different items in reporting or documentation
2) The limitations of the methodology are described
Score
Not required
–
Optional
o
Required
+
No
–
Yes
+
The Table 14 below shows the semi-quantitative evaluation of transparency of various methodologies and initiatives. A detailed description of aspects leading to these scores can be found in Annex B, Table 73 and Table 74.
80 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Table 14: Evaluation according to the transparency criteria Methodology/ initiative
1) Reporting/ documentation
1.a) Source of data
1.b) Allocation
1.c) Emissions factors
1.d) Assumptions
1.e) Uncertainty/ sensitivity
1.f) Product system
1.g) Critical review
1.h) Interpretation
GHG Protocol Corporate Standard
+
–
–
–
–
–
+
o
–
–
GHG Protocol Scope 3 Standard
+
+
+
+
–
+
+
o
–
–
ISO 14064-1
+
–
–
+
–
+
+
+
–
–
Bilan Carbone®
+
CDP
+
–
–
–
–
–
–
+
–
–
ITU-T L.1420
0
+
–
+
–
+
o
+
+
–
ADEME – ICT Sectoral Guidance
–
GHG Protocol Product Standard
+
+
+
–
–
+
+
+
–
+
PAS 2050
o
+
+
+
+
–
+
–
–
–
ISO 14040/14044
–
–
+
+
+
+
+
+
+
–
ISO/ DIS 14067
++
+
+
–
+
+
–
+
+
+
BP X30-323
++
+
+
+
+
–
+
–
–
–
–
2) Limitations
+
–
–
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector | 81
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodology/ initiative
MEErP
1) Reporting/ documentation
1.a) Source of data
1.b) Allocation
1.c) Emissions factors
++
n.a.
n.a.
n.a.
(for ErP preparatory studies)
(given by the EcoReport Tool)
(given by the EcoReport Tool)
(given by the EcoReport Tool)
1.d) Assumptions
1.e) Uncertainty/ sensitivity
1.f) Product system
1.g) Critical review
1.h) Interpretation
2) Limitations
+ +
+
+
(stakeholder comments need to be published)
+
GHG Protocol Product Standard: DMS
–
– specified in the GHG Protocol Product Standard
GHG Protocol Product Standard: TNS
–
IEC TR 62725
–
–
+
ETSI TS 103 199
+
+
+
+
+
+
–
+
+
+
ITU-T L.1410
+
+
+
+
+
+
–
+
+
+
PAIA
n.a.
n.a.
–
iNEMI
n.a.
n.a.
–
EPEAT
n.a.
n.a.
–
++
n.a.
–
Energy Star
82 | Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
To analyse transparency, two aspects should be taken into account: Is the public informed about the results? Are results understandable and transparent when presented? Whereas the first point depends on public reports, the second aspect is also valid for internal documentation. Therefore, first aspect is scored if public reporting is required. The actual aspects of the report (criteria 1a – 1h) are scored separately from criterion 1, both for public reports and internal documentation in the same way. The fact that many companies publish short white papers or very simplified environmental reports which differ widely from the detailed reporting requirements is not taken into account when evaluating the actual methodological requirements.
1) Reporting/documentation requirements It can be seen that most methodologies and initiatives require detailed reports/documentation on the results, especially ETSI TS 103 199 and ISO 14040/14044 (in particular for comparative results). However, not all methodologies require public reporting, e.g. PAS 2050 requires only internal documentation. The GHG Protocol standards on the other hand require public reporting. Some methodologies, such as BP X30-323, require public reporting plus more detailed documentation which has to be made available upon request. However, published results in sustainability reports, product environmental reports or white papers in most cases do not fulfil this level of detail. The requirements for reporting and documentation differ amongst the different methodologies. The sources of primary data do not need to be documented in most cases. But, according to ISO 14040/14044, to which many methodologies refer, the sources of published literature should be referenced for the Life cycle Inventory (LCI). In the final report, this detailed description of data sources is recommended. The interpretation of results is an important step in a carbon footprint analysis to fully understand the results. This step is directly related with many of the other aspects (such as assumptions and sensitivity analysis). As the interpretation depends on the specific analysis, most methodologies do not give detailed requirements on this aspect.
2) Limitations Besides the reporting requirements, it is analysed whether the methodology describes any of its limitations. Some of the analysed methodologies mention as their own limitation that GHG emissions alone cannot be used to judge the overall environmental impact of a product. This increases the overall credibility as it points out that the evaluation of other impact categories may show contrary results.
Towards an overall measurement methodology of the carbon and energy footprints of the | 83 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
2.2.8.
Interaction with other methodologies
Product environmental assessment Product oriented methodologies are all based on the general LCA principles defined by ISO 14040/14044. In most cases, studies conducted according to one of the analysed carbon footprint methodologies also fulfil the ISO 14040/14044 requirements. But this is not always the case. On the other side, ISO 14040/14044 is less specific than the other methodologies, both regarding GHG emissions and the ICT sector (see Figure 10). ICT-specific PCRs
GHG Protocol ICT Sector Guidance
ICT-specific methodologies
Generic CFP methodologies Baseline principles
Draft version
ICT-specific PCRs by BP X30-323
IEC TR 62725
ISO 14067
PAS 2050
GHG Protocol Product Standard
ETSI TS 103 1999
ITU-T L.1410
BP X30-323
ISO 14040/44
Figure 10: Links between product-oriented methodologies (situation in September 201251) Besides the general reference to ISO 14040/14044, there are several links and interactions between the methodologies: The GHG Protocol Product Standard builds on the framework and requirements established in ISO 14040/14044 and PAS 2050. ISO/ DIS 14067 combines the part on communication required by ISO 1402552 and the part on quantification required by ISO 14040/14044. IEC TR 62725 references to and uses definitions by GHG Protocol Product Standard, ISO 14064, ISO/ DIS 14067 and PAS 2050. One of the EPEAT criteria requires the compliance of the product with Energy Star. There are also several links to methodologies and initiatives not analysed in this study: The appropriate method for self-verification and for presentation of the results within PAS 2050 shall be through the application of ISO 1402153. ISO 14040/14044: Examples of impact categories are described in ISO/TR 14047.
51
Final version of ITU-T L.1410 was published on August 31, 2012. As the project started early 2012, the draft version of ITU-T L.1410 was analysed instead. 52
ISO 14025:2006: Environmental labels and declarations – Type III environmental declarations – Principles and procedures 53
ISO 14021:1999: Environmental labels and declarations – Self-declared environmental claims (Type II environmental labelling)
84 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Through the collaboration of different working groups and standardisation organisations, a harmonisation of the methodologies is promoted. Many changes in the 2011 revision of PAS 2050 aim at the harmonisation of PAS 2050 with ISO/ DIS 14067 and GHG Protocol Product Standard (both as drafts). Members of ISO/ DIS 14067 Working Group were in the Steering group of the GHG Protocol Product Standard. ISO cooperates with the GHG Protocol Product and Supply Chain Initiative. GHG Protocol ICT Sector Guidance – TNS: The Green Grid is referenced for data centre power efficiency metrics (e.g. Power Usage effectiveness - PUE). BP X30-323 aims at staying compliant with other relevant national, European and international standards. Consistency shall be kept with the methodology guidance being elaborated by the European Commission54, with the methodology that will be used for the compulsory GHG emissions reporting of companies in France (Article 75 of the Grenelle), and with international standards under development. PAS 2050 is promoted for GHG assessments by the UK government. In general the different methodologies are very similar, with different levels of detail on certain aspects. Actual differences that occur are for example regarding the reporting: PAS 2050 focuses on providing a consistent quantification method only (with no obligation to publish results). The purpose of the GHG Protocol Product Standard methodology is to underpin a public inventory report and has therefore not only requirements for the quantification but also for the reporting. ISO/ DIS 14067 is aimed at providing a standard for both the quantification and communication of carbon footprints. Minor conflicts or differences are: According to the definition of "Customer-Premises Equipment (CPE)" in ITU-T L. 1410 as well as in GHG Protocol Product Standard: TNS, a personal computer (PC) refers to CPE. On the contrary, ETSI TS 103 199 makes a further distinction between the customer-premises equipment and the end-user equipment, based on ownership. In ETSI TS 103 199, a personal laptop or computer is considered as an end-user equipment (definition according to ETSI TS 103 199: “any device that can connect to CPE or Networks”), and not as a customer premises equipment (definition according to ETSI TS 103 199: “any terminal and associated ICT Equipment located at a subscriber's premises and connected with a carrier's telecommunication channel(s) at the Network Termination Points”. CPE covers also home office equipment).
54
ec.europa.eu/environment/eussd/corporate_footprint.htm
Towards an overall measurement methodology of the carbon and energy footprints of the | 85 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
According to PAS 2050, no multipliers or other correction factors shall be applied to emissions arising from aircraft transport. When following the GHG Protocol standards, multipliers may be applied to account for radiative forcing (and the type of multiplier and its source may be disclosed in the inventory report). Aircraft transport and business air travel may contribute significantly to the overall impact of a company. According to figures published by Dell, business air travel accounts for about 13% of scope 1, 2 and business air travel emissions55. As aircraft transport can represent a big share of the overall transport in the ICT sector56, this difference in the methodologies has a negative impact on the comparability of the results. Company environmental accounting Although for the organisation-oriented methodologies, there is no baseline methodology like ISO 14040/14044 for the product environmental assessment, there are several links and interactions between the different methodologies: ISO 14064 incorporates many key concepts and requirements stated by the GHG Protocol Corporate Standard. The Bilan Carbone® proposes an approach that is compatible with both ISO 14064 and the GHG Protocol Corporate Standard: ADEME – ICT Sectoral Guidance explicitly refers to the Bilan Carbone®. The guide builds on ISO 14064-1, ISO 14069 (draft state at publication of the final document), GHG Protocol Corporate and Scope 3 Standard, Bilan Carbone®. Therefore, results should be usable in an international context. Bilan Carbone® Version 7 has a direct link with the new emission factors database of the ADEME called the "Base Carbone®". The Base Carbone® comes from the work initiated with the Bilan Carbone®. ITU-T L.1420 (environmental impact of an ICT organisation) is based on ISO 14064-1 and the GHG Protocol Corporate Standard. CDP as reporting initiative recommends the GHG Protocol Corporate Standard for the accounting but other methodologies such as ISO 14064 can be used as well. Besides the methodologies and initiatives analysed in this study, the following interactions exist:
55
Corporate Responsibility Report 2009 by Dell: i.dell.com/sites/content/corporate/corpcomm/en/Documents/Dell_CR_Summary_Report_FINAL.pdf 56
See for instance: “Product Carbon Footprint (PCF) Assessment of Dell Laptop – Results and Recommendations” by Scott O'Connell and Markus Stutz from Dell. In this carbon footprint analysis, aircraft transport for transports from product manufacturing locations in China to Dell final assembly and distribution centers in the US and Europe is assumed.
86 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
ISO 14064 is GHG program neutral. If a GHG program is applicable, requirements of the program are additional; if requirements are conflicting, the GHG program requirements take precedence. ISO 14064 and GHG Protocol Corporate Standards were used to develop the Carbon Trust Standard (UK). There is no direct conflict between the different organisation-oriented methodologies: the different standardisation organisations and working groups work together during the development to avoid conflicts as much as possible. For instance, members of the ISO TC207 U.S. Technical Advisory Group and the ISO/ DIS 14067 Working Group Convener were in the Steering Committee of the GHG Protocol Scope 3 Standard and Bilan Carbone® will integrate changes that may be dictated by the evolution of other standards.
2.3.
Product Category Rules (PCRs)
PCRs establish a series of specific rules for the Type III environmental declarations according to the requirements of ISO 14025, “Environmental labelling and declarations – Type III environmental declaration – Principles and procedures”. After preparing a PCR, an open consultation for commenting the PCR document is undertaken by all interested parties. PCRs are normally valid for three years after which the validity of the document might be reviewed. Concerning the ICT sector, regions like Japan, Korea, Norway, Sweden and Taiwan are involved in the development of PCRs to some extent. At the moment, Germany mainly develops PCRs in the field of construction, for instance textile, laminate and resilient floor coverings. Table 15: PCR programs in different countries Country
PCR Program
Website
Sweden
The international EPD® system
www.environdec.com/en/
Norway
The Norwegian EPD Foundation Norway
www.epd-norge.no/
Korea
Korean EDP and Carbon labelling programme (KEITI)
www.edp.or.kr/edp/english/list/list.asp
Taiwan
Environment and Development Foundation (EDF) Taipei
pcr-library.edf.org.tw/index.asp
Japan
Japan Environmental Management Association for Industry: EcoLeaf Environmental label
www.jemai.or.jp/english/ecoleaf/pub_ps c.cfm
Towards an overall measurement methodology of the carbon and energy footprints of the | 87 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
One of the advantages of PCRs is that the rules in each PCR are specifically developed for individual products (or product categories) and therefore take the specific technical parameters/aspects into account. Comparing with ISO or other methodological standards that provide general principles and guidelines, each PCR of a specific product contributes to providing concrete specific calculation rules and methodological rules for the modelling. This is a prerequisite for comparing the results of different assessment studies within the same product group. A short screening of various existing PCRs concerning ICT sector has been conducted. A detailed list is shown in Table 76 in Annex C. The objectives of this screening are to: Obtain an overview of existing PCRs concerning ICT-sector; Identify for which types of products in the ICT sector PCRs have already been investigated; Find out the issue date of PCRs; and Find out to which extent PCRs developed by different organisations are different. This list does not cover all products of the ICT sector but it is nonetheless covered to a large extent. As shown in Table 76, 37 PCRs are listed including different product groups or components. One third of them are still valid to date. ICT relevant PCRs have been developed since 2000 and although many of them are expired by now, the experience gained from developing PCRs and using them facilitates the update and improvement of PCR documents. Nearly half of them were prepared by Taiwan. This can partly be explained by the fact that a large part of the supply chain (especially manufacturing processes) in the ICT sector takes place in Asia. The cooperation of industries possessing the knowledge of their manufacturing processes helps establishing a solid PCR. While screening the PCR documents (Table 76), the following observations were made: Different structures and accuracy levels of the various PCRs: for instance, the information on version number, validity date, author, and contact person are not available for the Korean PCR of mobile phone57, while Swedish PCR on laser printer58 provides not only above information, but also the UN CPC Code number and defines the product under ISIC-CPC’s classification. Besides specific rules, a third type of PCR, e.g. TFT-LCD Televisions59 developed by Taiwan also includes the reporting format for the Environmental Product Declaration (EPD) and generic data sources to refer to.
57
gryphon.environdec.com/data/files/6/8228/epd291_1.1.pdf
58
www.environdec.com/en/Product-Category-Rules/Detail/?Pcr=5930
59
www.environdec.com/en/Product-Category-Rules/Detail/?Pcr=7960
88 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Although PCR development process is an open consultation and includes a review by third party review panels, the operation work in practice might be done at different detailed levels. This is because there are no harmonised rules and the development of PCRs is often linked with country-specific PCR programs. It happens that two PCRs exist for the same product category, e.g. for notebook computer developed by Taiwan and Japan, or for LCD Module developed by Taiwan and Sweden. The aim of PCR is to define specific rules in order to support the comparison of EPDs. This duplication leads to inconsistency of PCRs and therefore hampers the comparability. Although the validity periods are different, overlapping is possible, e.g. both PCRs of LCD module were valid in 2008. Furthermore, even though certain PCRs are expired, the outdated PCR can still be used, if there is no update. PCRs exist on product and on component levels (e.g. for a notebook and for Integrated Circuits - ICs). In these cases, the component level PCRs are more detailed than the product level PCRs regarding the manufacturing phase. Use phase aspects on the other hand are self-evidently only addressed at product level. This shows that both levels of detail are needed. However, at the moment there is no interlinkage between component- and product-related PCRs. There are no PCRs for ICT services or ICT systems (e.g. datacenters) yet. These would be even more complex to develop than for individual products, because there can be significant differences between “similar” ICT services or systems. The level of details in certain PCRs could be improved and specific products could be given more attention. For example, the functional unit in the PCR on Integrated Circuits60 is not well-defined. Because of various IC types (CMOS logic chips, Flash chips, DRAM chips, etc.) and packaging types and as front-end and back-end processes occur at different locations, more specific definitions and considerations for the front-end and back-end processes should be developed. One unit of IC defined in this PCR is not proper for front-end processes: the die area is important in the semiconductor industry and directly reflects the effort for microchips manufacturing. Different language: some PCRs do not have English version, e.g. the PCR of IT Services61 is only available in Swedish. The existing PCRs are not always used. Reasons might be that they are not centrally published and therefore not known by the practitioner of PCF analyses, but the quality of the PCR itself might also not be sufficient in some cases. The following recommendations are made for PCR development:
60
www.environdec.com/en/Product-Category-Rules/Detail/?Pcr=7948&id=158&epslanguage=en
61
www.environdec.com/en/Product-Category-Rules/Detail/?Pcr=5640
Towards an overall measurement methodology of the carbon and energy footprints of the | 89 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
In order to guarantee the reliability of the PCR, an independent critical review is indispensable. However, to ensure the quality of the review, qualification of the reviewers should be ensured. The PCR development procedure and review procedure should be documented for a better traceability and transparency. The review panel should consist of at least two types of expertise. One should provide expertise on environmental assessment and the other should provide qualified knowledge of the corresponding sector/product investigated. Reviewers names and review report should be disclosed, e.g. such as the PCR for uncompounded polymer resins or reactive polymer precursors62. The structure and level of accuracy of PCR documents should be harmonised. Global harmonisation of PCRs is needed. There exist international platforms like GEDnet63, dealing with environmental declaration and PCRs. The interlinking network and the cooperation between countries’ PCR programs should be fostered even more. In addition, a central management of PCR could contribute to avoid doubling of PCRs for the same products and to promote the information exchange. It is recommended to build connections between the PCRs. For instance, if a PCR for a motherboard already exists and that a PCR for a router is being developed, the existing motherboard PCR could be linked to or referenced in the router PCR, provided that the technical parameters and information are consistent. This approach would also enable to build links between PCRs of different countries. Furthermore, this approach requires a harmonised PCR procedure including supporting documents.
2.4.
Mapping of methodologies and initiatives
The various methodologies and initiatives analysed cover different fields of applications and can be divided into product- or organisation-oriented documents and further generic or ICT specific ones. The ICT specific methodologies for product environmental assessment can deal with products, services and/or networks. An overview of this classification is given in Figure 11.
62
www.plasticseurope.org/Documents/Document/20100312112214-PlasticsEuropePCR200606-20050909-004EN-v3.pdf 63
90 |
gednet.org/
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Methodologies for companies GHG Protocol Corporate Standard
ISO 14064-1
GHG Protocol Scope 3 Standard
Initiatives
Bilan Carbone®
CDP
Methodologies for ICT companies ADEME – ICT Sectoral Guidance
ITU-T L.1420
Methodologies for goods and services ISO 14040/44
ISO 14067
goods IEC TR 62725
ICT-specific PCRs by BP X30-323
GHG Protocol Product Standard
PAS 2050
Methodologies/initiatives for ICT services GHG Protocol ICT Sector Guidance DMS
MEErP
networks
GHG Protocol ICT Sector Guidance TNS
EPEAT
ETSI TS 103 1999
iNEMI
ITU-T L. 1410
Energy Star
BP X30-323
PAIA Draft version
Figure 11: Field of application for the different methodologies and initiatives (situation in September 201264) The different methodologies and initiatives have very different levels of detail (Figure 12). CDP, as a reporting initiative for example, gives almost no details regarding the accounting method and leaves this aspect to the carbon footprint methodology that is used. The
64
Final version of ITU-T L.1410 was published on August 31, 2012. As the project started early 2012, the draft version of ITU-T L.1410 was analysed instead.
Towards an overall measurement methodology of the carbon and energy footprints of the | 91 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
labels EPEAT and EU Energy Star do not specify a complete methodology but define individual and detailed criteria on different aspects. Regarding the company environmental accounting, the analysed methodologies are generally all applicable to assess the scope 1 and 2 GHG emissions of ICT companies. If the complete impact of the ICT company/sector has to be assessed, the inclusion of scope 3 emissions is necessary. In this context, most of the methodologies are not detailed enough (e.g. ISO 14064-1 only roughly names possible scope 3 categories in the annex). However, detailed scope 3 guidance provided in some methodologies such as the GHG Protocol Scope 3 Standard is very useful. All the product-oriented methodologies (except for the label EU Energy Star) are based on a life cycle approach. The level of detail differs concerning the aspect how specific they are for ICT or even certain ICT product groups.
Level of detail
GHG Protocol ICT Sector Guidance
ICT-specific PCRs by BP X30-323
EPEAT
Energy Star
ETSI TS 103 1999
ITU-T L.1410
iNEMI
PAIA
ITU-T L.1420
ADEME – ICT Sectoral Guidance
IEC TR 62725
GHG Protocol Scope 3 Standard
Bilan Carbone®
GHG Protocol Product Standard
BP X30-323
GHG Protocol Corporate Standard
MEErP
ISO 140641
ISO 14067
PAS 2050
ISO 14040/44
CDP
Draft version
Figure 12: Level of detail for the different methodologies and initiatives (situation in September 201265)
65
Final version of ITU-T L.1410 was published on August 31, 2012. As the project started early 2012, the draft version of ITU-T L.1410 was analysed instead.
92 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
For the more detailed ICT-specific methodologies (excluding the initiatives and labels), Figure 13 gives a short overview of the main similarities and differences.
Scope level
· Common aspect: · · Difference:
Productoriented
Common aspect: Sectoral level Difference:
ICT-specific methodologies
·
Level of detail
· ·
Differentiation among goods, networks, and services Definitions of functional units
·
Basis analysis and comparative analysis
· ·
Scope 1 and scope 2 shall be included, while scope 3 is recommended Compatible with ISO 14064-1
· ·
Carbon removal and carbon offset GHG and secondary energy consumption
· ·
Identifying and assessing GHG impacts over time period to identify the changes in ICT and non-ICT organisations Similar sectors investigated in organisations
·
Basis analysis and comparative analysis
Common aspect: Scope level Difference:
Organisationoriented
Common aspect: Sectoral level Difference:
Based on life cycle approach Based on ISO14040/44 Climate change (GWP) is the focus
Figure 13: Overview of similar and dissimilar features of ICT-specific methodologies Most of the analysed methodologies and initiatives cover specifically the global warming potential. Some methodologies have the wider LCA scope with further environmental impacts (ISO 14040/14044, ETSI TS 103 199, ITU-T L. 1410, MEErP, etc.) or just cover one or two additional impacts (e.g. CDP also addresses water consumption but does not define a specific methodology). The environmental label EU Energy Star only covers energy aspects.
Towards an overall measurement methodology of the carbon and energy footprints of the | 93 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
Energy
Energy Star
IEC TR 62725
Global warming potential - Kyoto gases PAIA
Some environmental impacts
EPEAT
LCA (various environmental impacts)
ITU-T L.1410
GHG Protocol ICT Sector Guidance
iNEMI
PAS 2050
GHG Protocol Scope 3 Standard
Bilan Carbone®
ITU-T L.1420
GHG Protocol Product Standard
GHG Protocol Corporate Standard
ISO 14064-1
ADEME – ICT Sectoral Guidance
ISO 14067
BP X30-323
ETSI TS 103 1999
ISO 14040/44
CDP
MEErP Draft version
Figure 14: Coverage of the different methodologies and initiatives regarding environmental impacts (situation in September 201266) Figure 15 shows an overview of the analysed methodologies and initiatives concerning their reporting and review requirements. Many of the methodologies require an internal or external review. Also a public reporting is required by most methodologies. Only a combination of a detailed documentation and a review ensures transparent and reliable results.
66
Final version of ITU-T L.1410 was published on August 31, 2012. As the project started early 2012, the draft version of ITU-T L.1410 was analysed instead.
94 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
No review required GHG Protocol Corporate Standard
Public report required
ISO 14064-1
MEErP
Internal review
External review
GHG Protocol Scope 3 Standard
CDP
GHG Protocol Product Standard
ISO 14067
BP X30-323
Energy Star
GHG Protocol ICT Sector Guidance
ETSI TS 103 199
ITU-T L.1410
ITU-T L.1420
Documentation required
No requirements regarding documentation
PAS 2050
Bilan Carbone®
ADEME – ICT Sectoral Guidance
EPEAT
IEC TR 62725
ISO 14040/44
Draft version
Figure 15: Review and documentation requirements of the different methodologies (situation in September 201267)
2.5.
Conclusions
The methodologies for carbon footprint are all quite similar with only minor differences in the level of detail for certain aspects such as reporting requirements or reviews. They are basically applicable for the whole ICT sector, except for the ones with the highest level of detail, e.g. GHG Protocol ICT sector guidance which provides different chapters for specific products and services. The methodologies developed by ISO, GHG Protocol, PAS, ADEME/AFNOR, ETSI and ITUT are generally suitable to enforce carbon footprinting as per the requirements of EU legislation. Depending on the goal of the implemented regulation, one or several of the methodologies might be chosen to be used within the policy framework. If different
67
Final version of ITU-T L.1410 was published on August 31, 2012. As the project started early 2012, the draft version of ITU-T L.1410 was analysed instead.
Towards an overall measurement methodology of the carbon and energy footprints of the | 95 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
methodologies are chosen or accepted, the framework would need to harmonise some aspects for a consistent application, e.g. consistent documentation, mandatory reviews or the compulsory use of PCRs. Input Data One difficulty which occurs in most assessments at product and company levels is the limited amount of available data. This is a problem which cannot be solved by methodologies but possibly by the development of public databases which could be supported by policy makers. For certain aspects, e.g. national grid mixes, the use of public database could be specified and required in initiatives and methodologies. The detailed description of each data set used would probably be too long to constitute the normal documentation of a carbon footprint study. A general description including what kind of data (bases) were used for which part (e.g. primary data for manufacturing, end-of-life treatment from Ecoinvent database, electricity emission factors from DEFRA) would then increase the transparency of the assessment. Methodologies which include secondary data, such as PAIA and iNEMI, could be helpful to conduct an assessment when no primary data are available. However, as there is no detailed description of these tools, their actual usability could not be evaluated. Company environmental accounting Regarding scope 1 and 2 emissions, the assessment of an ICT company is not very different from other industry sectors. The existing generic methodologies are used by ICT companies to assess their scope 1 and 2 emissions and publish them in their sustainability reports and/or under CDP. Therefore, further specific ICT- or product group-related methodologies or guidance do not seem necessary for scope 1 and 2 emissions. Accounting of scope 3 emissions is more difficult and requires a much more important effort by the companies. Indeed, the assessment of the use phase of sold products and of the complete supply chain could be very complex for ICT companies. The GHG Protocol Scope 3 Standard is a good basis but it does not cover ICT-specific features. To cover the use phase emissions of sold products, specifications from ICT-specific product-oriented methodologies should be followed. The methodologies are suitable to assess the absolute GHG emissions of a company, but a suitable baseline and relevant performance indicators are missing to compare the performance across the whole ICT sector (e.g. considering the number of products/business volume is not suitable to compare ICT companies having different activities). Product environmental assessment The existing methodologies for product environmental assessment are applicable for the whole ICT sector, although there are still difficulties regarding different assumptions. Especially for ICT services and communication networks, the problems regarding data acquisition and allocation are not yet fully resolved. The analysis of the most commonly used methodologies has shown that ISO 14040/14044 is still the most widely used methodology for LCA and carbon footprints. Some more
96 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
recent carbon footprint methodologies, such as PAS 2050 and the GHG Protocol Product Standard, are more detailed but remain based on the principles defined by ISO 14040/14044. All methodologies cover the whole life cycle. Regarding ICT-specific questions such as allocation, ICT-specific methodologies provide even more specific requirements (e.g. ETSI TS 103 199) or at least additional guidance (GHG Protocol ICT Sector Guidance). They are in most cases helpful and should be preferred to generic ones when assessing ICT products, or used as complements. Despite the ICT-specific methodologies being a lot more detailed, they still cover a very diverse sector with a lot of different goods and services so that individual guidance for some of them cannot be given within these methodologies. Being aware of this problem, some methodologies (e.g. standards by the GHG Protocol Initiative) state that the results of the assessments should not be used for comparison between different products. They focus more on a comparison over time of assessment conducted by the same practitioner(s). Other methodologies, such as ISO 14040/14044, give more specific requirements for comparative analyses, and the limitations of a comparison. Therefore, comparative analyses are possible, but comparisons across different studies or the rating of a product’s performance based on the carbon footprint are not (yet) possible due to large uncertainties. Existing labels which focus on specifically defined aspects such as EU Energy Star and EPEAT are more suitable for direct comparisons and communication of product performances, although these labels cover only certain end-user products. The scope of these labels is different from the carbon footprint methodologies as they are not designed for the assessment of life-cycle emissions. Harmonisation with the Energy Star evaluation methodology may nonetheless be relevant to support the assessment of the use phase of a product with a carbon footprint methodology. As a conclusion from the product-oriented methodologies and case studies analysed in section 2.1.2, it can be stated that methodologies should be as specific as possible to increase comparability and usability for the practitioner. A good example at this point is ETSI TS 103 199, which clearly defines the life cycle phases to be covered, the data to be used, the presentation of results, etc. Generic methodologies and initiatives, such as ISO 14040/14044, give a lot more freedom of choices in conducting the assessment: this leads to less comparability between different studies, even if the selection of system boundaries and cut-off criteria should be justified and are subject to a crucial review. The requirements from ICT-specific methodologies are still not detailed enough on all aspects of an analysis (e.g. use patterns) to enable comparisons across different studies. But more detailed and restrictive methodologies do not seem useful, as this would lead either to a large number of different methodologies (i.e. one for each product group) or very long documents. At this point, it thus makes more sense that the methodologies refer to PCRs which should be made mandatory to use. Product Category Rules PCRs should be developed for more product groups and updated regularly as they improve the comparability of results and support practitioners when conducted an analysis. For an effective use of PCRs, they should be centrally published and harmonised as current PCRs
Towards an overall measurement methodology of the carbon and energy footprints of the | 97 ICT sector
Chapter II: Analysis of methodologies and initiatives for companies, goods and services
are published by different organisations and are duplicated for some product groups. If PCRs are developed which are valid worldwide, they could include regional specifications where needed (e.g. different use patterns). Regarding the use patterns, future PCR could be harmonised with other existing schemes, e.g. the TEC (Typical Energy Consumption) used by EU Energy Star for instance, to model the use phase of products in a similar way. At the moment, many parts of the ICT sector are not addressed by valid PCRs. For the implementation of a carbon/energy footprint policy, further PCRs would have to be developed and regularly updated.
98 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
Chapter III: Risk-benefit analysis This chapter presents a risk-benefit analysis of company GHG emissions reporting, based on a literature review and ICT stakeholders’ interviews. The literature covered includes previous studies on this topic, regulatory impact assessments in some countries, and other relevant sources (company CDP reporting, corporate or sustainability reports, company websites, NGO reports, etc.).
3.1.
Major challenges
Quantitative estimations of the risks and benefits of GHG emissions reporting specifically are difficult to find, as reporting is closely tied up with other GHG management activities. GHG reporting is also a relatively recent activity which may partly explain the limited feedback. Figure 16 summarises the ideal cycle of GHG emissions management in a company. 1. GHG emissions measurement
5. Assessment of GHG emissions reduction
4. Implementing actions
2. GHG emissions reporting
3. GHG emissions understanding and targets setting
Figure 16: GHG emissions management in a company Measuring GHG emissions (step 1) is an important first step, allowing an understanding of where emissions stem from and then identifying where/what sources to tackle. Reporting (step 2) is an important communication tool both internally and externally. It has a significant role to play in overcoming barriers, building commitment, gaining support from the board and senior management, unlocking funds and securing investments in low carbon measures and initiatives, and securing the engagement of suppliers (IEMA, 2010). Measurement and reporting in isolation are not enough to drive emissions reductions and need to lead to associated behaviour change (DEFRA, 2010). These steps also link to target setting (step 3), which fosters emissions reduction and is the next logical step (DEFRA, 2009a). External reporting is not necessarily made before step 3 but can be done after having analysed the GHG emissions in the internal reporting and having set targets.
Towards an overall measurement methodology of the carbon and energy footprints of the | 99 ICT sector
Chapter III: Risk-Benefit analysis
Reporting demonstrates leadership and improves brand recognition in an increasingly environmentally conscious marketplace. About 74% of CDP reporting companies set emissions reduction targets in 2011 (74% of IT companies and 81% of telecommunications companies) (CDP, 2011a). IEMA (2010) confirms the link between a company’s ambition in GHG emissions management (through external reporting in particular) and the emissions reductions that it has achieved in the past two years. Figure 17 illustrates a management hierarchy to define implementing actions leading to emissions reduction (step 4). Finally, the assessment of GHG reduction (step 5) provides feedback on the efficiency of the implementing measures and can be made at the same time as step 1 of the next management cycle. Concerning the compensation stage, the analysis in Chapter II0nonetheless showed that carbon offsets cannot be taken into account for GHG emissions accounting according to the analysed methodologies, and that green energy tariffs do not always lead to actual emissions reduction, when the green energy considered is included in the national grid mix.
Avoid
Reduce
Substitute
• In all major business decisions, investigate options to eliminate GHG emissions • Potential exists when organisations change, expand, rationalise or move business • May lead to a new business model, alternative operation or a new product/service
• Efficient use of energy, vehicles, staff (e.g. energy and fleet management) • Increased resource efficiency per unit • Reduced costs and lower total/net energy demand • Adopt renewables/low-carbon technologies (on site or through vehicle fleet) • Reduce carbon (GHG) intensity of use • Through suppliers, purchase goods and services with lower embodied emissions
• Investigate 'green energy' tariffs and high quality carbon offsets • Develop a strategy to compensate residual or 'unavoidable' emissions Compensate • Consider supporting community projects (i.e. both carbon and CSR benefit)
Figure 17: GHG management hierarchy (adapted from IEMA (2010)) However, all steps of the cycle in Figure 16 are not systematically followed by companies and there is a gap between company awareness and action (OECD, 2010). A company with a communication objective only may for instance stop after reporting, either internal or external, without any further steps aiming at emissions reduction. Also, the reporting step can be more or less important depending on the company: if the primary objective is to reduce GHG emissions, a limited reporting and communication effort may be done externally. There are several drivers that lead a company to start measuring and reporting its GHG emissions, for instance: to meet stakeholders’ needs (e.g. customers, investors, consumers associations), to provide accountability and transparency, and for regulatory compliance. The drivers targeting emissions reductions can be slightly different: senior management
100 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
commitment, specific environmental targets, potential for increased resource efficiency, brand building/market leadership, ethical reasons, as well as cutting costs or revenuegenerating opportunities. According to a survey amongst IEMA members (IEMA, 2010), the four most important drivers of carbon management, for companies already implementing it68 (i.e. not only measurement and reporting) are: (1) cutting costs / improving efficiency (for 47.5% of them), (2) organisation ethical values (45.3%), (3) legislation (45.2%) and (4) promoting the brand or improving reputation (41.5%). Opinions are different for companies not yet managing their emissions69. For them, new legal requirements (for 53.3% of them), cutting costs (42.4%) and key client requirements (38.2%) would be the main drivers of action. The variety of drivers and interactions make each company’s situation unique and there seems to be a critical point where the combined effects of the different drivers lead the company to act. The following sections present the risks and benefits associated with GHG emissions measurement and reporting. However, given previous considerations and interdependencies between the different steps shown in Figure 16, the risks and benefits may also be partly due to other steps in the management cycle, depending on the sources reviewed. Besides, there is a lack of research and feedback from companies on quantitative estimations of costs and benefits or reporting, which may explain why very few were found during this review.
3.2.
Analysis of risks
GHG reporting represents a risk primarily because it constitutes an additional effort (human and financial) that has to be undertaken by the company, usually without a clear vision as to the potential benefits in the short or long term. The following risks of GHG measurement and reporting have been identified in the literature reviewed.
3.2.1.
Financial risks
The financial risks are linked to additional costs due to employee and/or contractor time spent on the reporting process (data collection and control, management, administration and technical support), verification (e.g. by a third party), and development and running of systems/software (e.g. GHG accounting tool to automate the data collection process and identify additional opportunities for reductions), etc. This burden may be particularly heavy for SMEs, compared to large companies for which the overheads are proportionally smaller. Table 16 lists these financial costs according to various sources. Caution should be taken while comparing these figures as the scope of the estimation may vary across the sources. For legislation associated with a reporting scheme, the regulators will also have to bear additional administrative costs. They are difficult to quantify as they are very
68
1 079 IEMA members.
69
595 IEMA members.
Towards an overall measurement methodology of the carbon and energy footprints of the | 101 ICT sector
Chapter III: Risk-Benefit analysis
dependent upon the scheme: in particular, tasks that can be responsible for these costs include establishment of the reporting scheme (methodology, reporting template, etc.), verification actions (if implemented, they can be made by the regulator, or by a contracted third party), and support activities for the companies. Table 16: Financial risks of GHG measurement and reporting (steps 1 & 2) Quantitative estimations70 Survey amongst companies implementing GHG emissions reporting (scope 1 reporting only). Costs include collection of data and calculation of emissions. Range from 75 000 € to 800 000 € per company. Annual verification costs: Range from 50 000 € to 500 000 € per company (just over half of the companies using standards verify them)
Source
Ethical Corporation Institute (2008)
Estimations were made for the energy and metal and chemicals manufacturing sectors only. Company costs: 9 353 € per entity in the first year and 5 755 € per entity in subsequent years
EPA (2009)
Regulator costs: 1 205 € per entity regulated Estimations were made for a company reporting based on the DEFRA guidance (DEFRA, 2009a). In particular, scope 3 reporting is optional (recommended). DEFRA (2009b) Company costs: 1 404 € (small company) to 7 079 € (large company) per company in the first year; 838 € (small company) to 5 326 € (large company) per company in subsequent years Reporting within the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, only for large companies (using at least 6 000 MWh/year of half-hourly metered electricity). Includes the following activities: understanding the rules, initial collection and analysis of energy data, submitting data to co-ordinator, verifying data (external costs). Excludes: developing a compliance strategy, understanding and taking part in auction, trading activities.
DECC (2010)
Company costs: range from 5 814 € for small companies (1 site) to 23 837 € for large companies (>50 sites), under a daily cost assumed at 581 € / person-day. Survey skewed towards larger companies
PwC/CDP (2010)
70
Conversions to € were made according to the exchange rates of the year of publication of the reference study: Average exchange rates in 2009 : 1 € = £0.89 = 1.39 USD Average exchange rates in 2010 : 1 € = £0.86
102 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
Quantitative estimations70
Source
Annual measurement costs: 250 employees) measuring their emissions (48%) is much more important than for medium companies (24%), small companies (9%) or micro companies (2%). Many
106 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
companies would like a clearer business case to show that addressing emissions will be in their interests (demonstrable cost savings and/or tax incentives and grants).
Figure 18: Share of organisations measuring GHG emissions, by size (source: ICAEW, 2009) The lack of comparability between different sectors and business operations in terms of applicable boundaries, emission sources and emission factors represents another risk. This issue is particularly relevant for the ICT sector, given the complexity and international nature of the supply chain, and the variability in the goods and services produced. Indeed, there is a risk that two published figures (from different companies) could tend to be directly compared by stakeholders (customers, investors, consumers associations, environmental NGOs, etc.). Like in LCAs, where comparisons can only be made with caution when the functional unit is not exactly the same, companies could theoretically only be compared if their emissions figures are related to a similar economic activity. In practice, such comparison does not seem realistic because each company has its specific business portfolio. For instance, there is a wide variety in the way telecommunications operators manage their telecommunications network and in the types of services they provide. Alternatively, defining GHG emissions intensity (or eco-efficiency) indicators (e.g. GHG emissions by economic value produced) may enable companies to compare themselves to a sector average performance for instance but they would not solve the issue of full comparability. The wide range of existing GHG measurement and reporting methodologies, either generic or ICT specific, may represent a source of confusion. Chapter II gave an overview of only the most used and recognised methodologies. As explained in the introduction, the reporting step is a communication step: amongst the potential targeted stakeholders are the company itself, investors, public authorities, customers or interested civil society organisations. Variation in reporting requirements to different stakeholders can result in increased complexity and additional costs (financial and/or time), and a decreased comparability. This is often seen where different reporting initiatives or methodologies
Towards an overall measurement methodology of the carbon and energy footprints of the | 107 ICT sector
Chapter III: Risk-Benefit analysis
require data and narrative in different formats, for different periods, resulting in a lack of consistency. According to PwC/CDP (2010), there is unanimous agreement about the need for clearer guidance and standards for GHG reporting, with appreciation for differences in sectors and not one rigid standard across all industries. The ongoing work of the European Commission on the methodological framework for GHG measurement and reporting is aiming at reducing this risk thanks to a better understanding of the properties and interactions between the various methodologies. In particular, it is paramount that this framework be developed at a global level (and not just EU-wide) for the ICT sector: ICT equipment supply chains are very often international and service providers (e.g. telecommunications, IT services) are often able to offer worldwide services. To illustrate this need for harmonisation and simplicity, the lack of clarity surrounding climate change policies is identified by the telecommunications sector as an important risk related to climate change in CDP (2011a). Emissions from the telecommunications sector are indirect (scope 2) and not covered by international agreements (i.e. EU ETS or Kyoto Protocol) but improving energy consumption is being targeted via various legislative initiatives, which complicates the task for multinational companies for instance. The complexity of reporting indirect (Scope 3) emissions, particularly reporting of subcontractor activities, is a barrier to full reporting. This issue is particularly important for the ICT sector, for which Scope 3 emissions can represent a prominent share of overall GHG emissions (see Figure 7 in Chapter II). Only 8% of reporting organisations were addressing all their significant Scope 3 emissions (IEMA, 2010). Although the disclosure rate for Scope 3 emissions is lower than for Scope 1 and 2 emissions, the overall amount of disclosed Scope 3 emissions is much higher than Scope 1 and 2 together. With an increasing rate of disclosure for Scope 3 emissions, this effect would further increase for ICT. It is therefore important, but complex at the time being, to encourage the reporting of Scope 3 emissions as well in the ICT sector, in order to tackle the risk of not considering the complete supply chain. The quality of disclosed data is an important risk, in particular when reporting is intended for external stakeholders such as investors, authorities or customers (DEFRA, 2010). The principal issue is the possible inconsistency, poor quality and robustness of disclosures without a single agreed reporting standard and verification approach. The verification of corporate emissions is still at an early stage of development (OECD, 2010). For instance, even though CDP is considered the most complete dataset on climate disclosure, the quality of data can sometimes be questioned. Ethical Corporation Institute (2008) also states that there is a need for increased scrutiny and standardisation of the extent to which companies comply with specific protocols and guidelines. According to the surveyed investors, a greater link between carbon-performance reporting and financial reporting would enable reporting to be improved and to reach the same level of quality of financial data. There are currently many stakeholders interested in GHG emissions data but not trusting the reported information (PwC/CDP, 2010). Thus, the fear of failing to properly report GHG emissions may also present additional risks for companies (which are the opposite of potential benefits presented later in section 3.3): reputation, market value, brand value, shareholder reputation, investor relationships (ERM, 2010), confidentiality (PwC/CDP, 2010).
108 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
If reporting puts too much economic burden on ICT companies (binding targets associated with taxes or financial penalties) in a limited geographical area (e.g. the EU), there is a risk of relocation of certain activities to third countries in order to avoid this additional pressure. This is particularly true for the ICT manufacturing industry, for which many activities are already located far away from the final use location of the products. For the ICT services industry however, there are some geographical constraints that limit this risk (e.g. location of the telecommunications infrastructures). Another barrier is the uncertainty about the future regulatory framework on GHG emissions. It could result in companies looking at the short-term instead of setting longterm strategies (OECD, 2010). CSR activities may provide almost no return in the short run (e.g. increase of competitiveness), and positive feedback may appear only after several years (Austrian Institute for SME research, 2007). This is likely to be valid also for GHG reporting, which is often published in corporate sustainability reports. Internal pressures for return on investment over short time periods are an important barrier to reporting (IEMA, 2010). SMEs are also more likely to adopt a short term vision because of their specific characteristics and their urgent striving for quickly seeing the effects of their business decisions. Regarding the environmental aspect, there also is a risk that focusing only on GHG emissions reporting with implementing actions, other environmental impacts may be overlooked, i.e. environmental burden shifting. Companies may focus only on GHG emissions, without trying to reduce other environmental impacts caused by their activities. It is even theoretically possible that GHG emissions reduction actions result in an increase of other environmental impacts. For example, in installations such as datacentres, reducing GHG emissions can result in increased resource use, e.g. if electric equipment is replaced by more energy-efficient equipment before reaching its technical lifetime. Burden shifting is partly due to the fact that most of the existing methodologies and initiatives for company accounting only focus on carbon and energy footprint, which is the most mature issue to date. Communication on environmental stakes should therefore be done with care in order to use climate change and GHG emissions to raise awareness about sustainable production and consumption in general, and not to link low GHG emissions to sustainability in general. Carbon footprint can be a relevant indicator (or driver) of the overall environmental impact of some specific products, but this is not true for all products or companies.
3.2.3.
Stakeholders’ opinions
Most of the industry representatives were not aware of quantitative estimations of the financial risks due to the GHG reporting. Such estimations were said to be very difficult to make. The only estimation that was provided suggested approximately 1-2 Million USD per year74 (as an order of magnitude). Qualitatively, the more reporting is done (in terms of scope, accuracy, etc.), the higher the costs will be. Several representatives agreed that it is
74
For a company employing over 71 000 people in more than 470 locations.
Towards an overall measurement methodology of the carbon and energy footprints of the | 109 ICT sector
Chapter III: Risk-Benefit analysis
easier for large to companies to bear such costs. Major costs are due to manpower (especially collection and verification of data) and software for data collection and management (either own development or purchased). The range for manpower needs is very large: from a couple of mandays per year (for first reporting) to several full time equivalents (involving up to a hundred persons in many countries for multinational companies, both internally and externally). Some other risks and barriers to GHG reporting include: Difficulty of data collection: in particular, scope 3 reporting is a concern shared by several industry representatives because of the complex data collection in the long supply chain. Confidentiality issues regarding proprietary information (especially new technologies, processes and formularies that are key intellectual property throughout the ICT supply chain). However, GHG reporting techniques when appropriately designed can handle this problem. The initial decision to report publically the emissions; executives are often afraid of the risks before the first reporting. The risk of switching the environmental burden from GHG emissions to another environmental impact is possible (e.g. water consumption in datacenters). The lack of transparency and accuracy of the disclosed data finally represents a risk regarding the use that can be made of the reported results (e.g. improper comparisons). In order to make proper carbon footprint comparisons, specific methodologies, and specific data requirements must be established first.
3.3.
Analysis of benefits
GHG reporting brings benefits to reporting companies on different dimensions. The fact that companies have been implementing voluntary GHG reporting for several years now shows that they see some benefits. The following sub-section presents the benefits of GHG measurement and reporting that have been identified in the literature.
3.3.1.
Financial benefits
Financial benefits of GHG reporting are very difficult to estimate, even more so than costs, as these benefits are difficult to quantify and are of long-term in nature. It was previously reported that a majority of companies cannot estimate these benefits (ERM, 2010), which are intangible or would require significant assumptions. Table 19 lists a number of sources indicating an order of magnitude, but no precise estimates were found.
110 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
Table 19: Financial benefits of GHG measurement and reporting Quantitative estimations
Source
For every 1 € invested in a proactive global environmental programme, the company gets 3 – 4 € back annually (please note that “global ERM (2010) environmental programme” may be much wider than GHG reporting but the reference document does not specify its definition). Improved consumer brand value and public reputation, basis for ecolabelling and certification: between 2-50% market value is at risk (depending on the sector) from climate change associated perception. Carbon Trust (2004) This can be turned into a benefit/competitive edge for the best performing companies. Costs savings ranging from £200 000 to £60 Million over five years for a few companies (role of reporting not clear in achieving these savings).
PwC/CDP (2010)
Such financial benefits are easier to estimate when associated with emissions reduction measures which are correlated to reporting. According to CDP (2011a), 54% of emissions reduction activities reported by Global 500 respondents75 have a payback period of three years or less and 28% of initiatives have paybacks of over three years (see Figure 19). This demonstrates that some companies see energy efficiency and emissions reduction as an important strategic priority in the medium- and long term. Regarding the short term benefits, behavioural change measures are commonly implemented due to their short payback periods (e.g. through training and education of staff or labelling).
75
The Global 500 are the largest companies by market capitalisation included in the Financial Times Stock Exchange (FTSE) Global Equity Index Series.
Towards an overall measurement methodology of the carbon and energy footprints of the | 111 ICT sector
Chapter III: Risk-Benefit analysis
Figure 19: Payback period breakdown of reported active emissions reduction initiatives by activity type, for CDP reporting companies (source: CDP, 2011a) Figure 20 shows the payback periods specifically for the ICT sector. The results have to be considered with caution as based on limited number of responses. Except for the low carbon energy installation, the majority of the emissions reduction initiatives have a payback period that is less than three years. Behavioural changes and use of transportation are the two items with the shortest payback periods for both the IT and the telecommunications sectors. Energy efficiency in building services seems particularly efficient for IT companies. The PwC/CDP (2010) business survey also investigated economic benefits (savings) due to increased resource and energy efficiency. Over half of the companies did not respond to this question because they did not have such estimations or were not willing to share them. The majority of responding companies mentioned annual benefits of less than £1 000 for carbon and resource efficiency savings. Furthermore, 40% of the companies stated energy savings of less than £1 000, while 25% stated energy savings in excess of £200 000.
112 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
Figure 20: Payback period breakdown of reported active emissions reduction initiatives by activity type for Information Technology companies (top) and Telecommunications companies (bottom), involved in CDP reporting (source: CDP, 2011a)
Towards an overall measurement methodology of the carbon and energy footprints of the | 113 ICT sector
Chapter III: Risk-Benefit analysis
Not to be underestimated are the possible economic benefits for a company who is a step ahead of possible future legislative measures. Progressively, greener companies would generally experience lower costs associated with the transformation of their technology and operation (in the wake of upcoming legislation) as they have ample time for assessing risks and alternative supplier base as well as market opportunities. In contrast, more conservative companies would have to undertake short-term radical operational and technological reforms, hence leading to difficulties finding new suppliers (as they might have been occupied by more progressive companies) and markets, thus leading to a loss in competitiveness and market share.
3.3.2.
Other benefits
Although there is limited information about financial benefits of GHG emissions reporting, companies report many benefits that are intangible or difficult to quantify (PwC/CDP, 2010). Many of these are related to reporting as a communication tool, both internal (board, employees) and external (customers, investors, authorities, consumers associations, etc.). These include76: Brand building and improving public/external reputation (increased transparency to the public audience), business leadership: it constitutes by far the most important perceived benefit (ERM, 2010). This is valid only when public reporting of the GHG emissions is implemented. Improved stakeholder relations, increased transparency to shareholders, clients and the board: there is significant and growing interest from investors in GHG emissions data and investor pressure is one of the major drivers for reporting (DEFRA, 2010), even though there is little evidence that investors take emissions into account for investment decisions in a comprehensive manner. Some current limitations, presented in the risk section above, include the incomplete spread of company reporting, incomparable company reports and short-termism amongst investors. Investor groups are therefore calling for improved climate change disclosure to use as a basis for quantifying climate risk. According to IEMA (2010), it is the easiest way to link finance with carbon. Opening and highlighting of new market opportunities for companies: GHG emissions reporting may create opportunities to innovate and generate revenue from more sustainable products and services. Ethical reasons and increased employee engagement and awareness of GHG impacts: companies can aim to meet societal expectations and include emissions reduction in their corporate values. Reporting supports culture change within the organisation.
76
Sources : ERM (2010), DEFRA (2010), PwC/CDP (2010), OECD (2010), CDP website : https://www.cdproject.net/en-US/Respond/Pages/carbon.aspx
114 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
Being able to set targets for reduction, monitor progress, reduce the impact of the company and identify how the company copes with threats arising from climate change: setting ambitious targets and managing emissions in a comprehensive way contributes to demonstrate leadership to the market. Enabling focus on resource efficiency and enhancing ability to increase it: reporting can highlight inefficient areas and increased resource efficiency results in financial savings. In particular, cost reductions may come from a lower emitting value chain, especially concerning energy consumption and transportation. Implementing a “green IT” strategy for their IT systems could enable companies to reduce CO2 emissions by as much as 50% (EY, 2010), with associated costs reduction (15-20% for travel to up to 90% for datacentres). Allowing the company to be “forward facing” and anticipate future regulation. Supporting communication along the supply chain and potential reward by customers: some companies are starting to manage the emissions along their supply chain by developing sustainable procurement scorecards for suppliers or through sharing best practice in the supply chain. Therefore, suppliers implementing GHG emissions reporting can benefit from a competitive advantage. This is especially the case for important tenders from public customers or large private customers, but is currently not a mainstream behaviour. This increases the consistency in the supply chain and contributes to better efficiency for data collection and consolidation. Furthermore, reporting emissions may also raise awareness and change behaviour downstream in the supply chain. Of the 49 CDP Supply Chain member companies in 2011 (the companies who are requesting climate information from their suppliers), 90% of responding companies have a climate change strategy with at least general guidelines for procurement, an increase from 79% in 2010 and 74% in 2009 (CDP, 2012). Some 62% reward suppliers that employ good carbon-management practices (up from 19% in 2009 and 28% in 2010), 39% will soon begin deselecting suppliers that do not adopt such measures (compared to 17% in 2009 and 23% in 2010), and 30% factor climate change into their evaluation of suppliers. As a result, suppliers are becoming more transparent about their emissions and GHG management strategies. The most important benefits for companies already implementing GHG reporting were cutting costs and financial efficiency, organisational values and legal compliance (IEMA survey, 2010). Table 20 lists the barriers to GHG management that reporting enables companies to tackle. Two levels are distinguished: whether the reporting is essential to address these barriers, or whether it is useful (which is “weaker” than essential). Building commitment and support from board and senior management scores first and above the others for both ranking, followed by others benefits relatively equivalent: securing staff engagement; securing commitment and participation from departments, business units, branch plants, subsidiaries, etc.; engaging with and promoting the strategy to other stakeholders; and engaging with and promoting the strategy to customers.
Towards an overall measurement methodology of the carbon and energy footprints of the | 115 ICT sector
Chapter III: Risk-Benefit analysis
Table 20: Views of reporting companies on the value of reporting in addressing barriers (adapted from IEMA, 2010) Share of companies for which it is essential
Share of companies for which it is useful
25%
92%
14.2%
89%
Securing commitment and participation from departments, business units, branch plants, subsidiaries, etc.
15%
87%
Engaging with and promoting the strategy to other stakeholders (e.g. shareholders and investors)
15%
87%
Engaging with and promoting the strategy to customers
13%
85%
Unlocking funds and achieving investments in low carbon measures and initiatives
10.5%
81%
Securing the participation and engagement of suppliers
6%
76%
Item Building commitment and support from board and senior management Securing staff engagement
CDP (2011a) suggests a strong correlation between good climate change disclosure and performance and higher financial performance. This relationship is however not necessarily a causal relationship as both are influenced by a range of factors. Many companies include their voluntary emissions reporting within their corporate or sustainability report. Therefore, if considering a wider scope, GHG reporting may also partly contribute to the benefits of CSR activities. A study focusing on SMEs, carried out by the Austrian Institute for SME research (2007), showed the link between SMEs’ CSR activities and their enhanced competitiveness on a long-term perspective. Different effects can be distinguished: direct (e.g. improved products), intermediate (e.g. higher customer satisfaction), or indirect (e.g. competitive advantage) on the one hand; internal (benefiting the company) or external (benefiting customers or the society) on the other hand. Looking at the macroeconomic picture, GHG reporting is a necessary step to internalise the externality that GHG emissions represent (EPA, 2009). An externality occurs when one party’s actions impose uncompensated benefits or costs on another party. It may result in information asymmetry, leading to an inefficient situation of the market for instance. This is the case with GHG emissions when there is no economic tool to counterbalance and take them into account (e.g. a carbon tax). As a result, benefits of GHG reporting accrue not only at the company level but also at the overall society level. These wider benefits are also very difficult to quantify and include:
116 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
raising public awareness, supporting fundamental research or due diligence for investors, enabling the learning of best practices (PwC/CDP, 2010). Regarding environmental benefits, GHG emissions reporting is part of the wider GHG emissions management approach and is a necessary step towards GHG and energy footprint reduction. Implementing measures to reduce the GHG emissions due to a company’s activities may also reduce other environmental impacts but that depends very much on the nature of the company’s activities. Furthermore, through appropriate communication of such initiatives, people’s awareness about sustainable consumption and the environmental footprint in general (not only the carbon footprint) may rise. It may pave the way to a reporting and better understanding of other environmental impacts at the company level, if GHG emissions reporting appears to be a successful and beneficial activity. The literature highlights additional benefits for external reporting compared to internal reporting only. Very few reporting companies surveyed are not reporting externally, suggesting that there are additional benefits to external reporting over and above the benefits associated with measuring emissions (DEFRA, 2010). This is also supported by a survey presented in IEMA (2010) which shows that companies who report externally as well as internally are more likely to be more ambitious in their GHG management strategies and more likely to achieve greater emissions savings than companies who report internally or not at all. Therefore, external reporting should bring more benefits, at least regarding those associated with emissions reductions (e.g. energy costs). Several CDP case studies concern ICT companies77. Table 21 presents the outcomes of some of them in terms of qualitative benefits brought to the company by CDP reporting.
77
https://www.cdproject.net/en-US/Results/Pages/case-studies.aspx
Towards an overall measurement methodology of the carbon and energy footprints of the | 117 ICT sector
Chapter III: Risk-Benefit analysis
Table 21: Case studies of ICT companies involved in the CDP Benefits brought by GHG reporting (under the CDP in this case) -
-
-
-
-
Create a baseline which is vital for planning for the future Track strategy development through responses year on year and allows trend analysis which can drive further efficiencies and reductions Identify opportunities for improvement within the business Trigger initiatives focusing on driving energy efficiencies Explore more deeply the integral link between climate change and EMC disaster recovery and business continuity products and services Anticipate future regulations
EMC78 (IT)
Set guidelines for suppliers: report to CDP, set public goals to reduce operational GHG impacts, set expectations for Tier 1 suppliers to establish GHG management and reporting requirements for their suppliers
Dell79 (IT)
Track emissions reduction Assist strategy and management Public disclosure, as a means of moving best practice forward and demonstrating transparency about the company’s commitment and achievements Significant cost savings, hundreds of thousands of dollars over the two years since the company ramped up its carbon management systems Means of wider engagement with its suppliers, by asking them if they report their greenhouse gas emissions and climate change strategies to CDP Annual marker to assess progress, aid strategy and communicate to stakeholders.
Avaya80 (Telco)
Establish a robust baseline and improve data collection Create initiatives to leverage Cisco’s own technology to improve energy efficiency and reduce power consumption in buildings, datacenters, and labs, as well as to reduce employee business travel. Measuring emissions and enabling transparent and public reporting form the basis for an absolute reduction goal
Cisco Systems Inc.81 (IT)
78
https://www.cdproject.net/en-US/WhatWeDo/Pages/Case-Study-EMC.aspx
79
https://www.cdproject.net/en-US/WhatWeDo/Pages/Case-Study-Dell.aspx
80
https://www.cdproject.net/en-US/WhatWeDo/Pages/Case-Study-Avaya.aspx
81
https://www.cdproject.net/en-US/WhatWeDo/Pages/Case-Study-Cisco-SystemsInc.aspx
118 |
Company (subsector)
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter III: Risk-Benefit analysis
As the correlation between GHG reporting and emissions reduction has been underlined previously, reporting (through emissions reduction) also supports the management of the indirect risks caused by climate change. Table 22 lists these high-level risks, according to companies from the IT and telecommunications sectors implementing reporting via CDP. Technical issues due to extreme weather conditions appear as a concern for both the IT and telecommunications sectors. Table 22: Climate change risks reported by ICT companies implementing CDP reporting (adapted from CDP, 2011a) Sector
Risks reported
Information Technology
Telecommunications
3.3.3.
-
Extreme weather conditions could result in an immediate financial impact if the availability of IT services is disrupted and supply chain and production processes are delayed.
-
Carbon and energy taxes and regulations could increase electricity costs.
-
Reputational risk resulting from inadequate management of Environmental, Social and Governance (ESG)-related risks. As more customers become more environmentally conscious, the brand image of a company might become affected.
-
Threat of extreme temperatures and changes in precipitation patterns could result in damaged equipment.
Stakeholders’ opinions
Like for the risks, none of the industry representatives were able to communicate a quantitative estimation of the benefits of GHG reporting by their company, except one person (who also did provide the quantitative estimation of the costs). This estimation represents 150 Million USD annually, due to energy savings82. Another representative estimates that the benefit-to cost ratio of GHG emissions reporting can be 10 to 1. Some others judge that benefits are more qualitative than quantitative. Other intangible benefits that were mentioned include: Reporting is a necessary step for emissions reduction: it enables to build the emissions profile, have a baseline, set targets, focus on cost-efficient reduction activities (e.g. transport, logistics, buildings), and identify areas needing improved data collection. Increases transparency to stakeholders, which is required for environmental responsibility. Reduces risks for investors.
82
For a company employing over 71 000 people in more than 470 locations.
Towards an overall measurement methodology of the carbon and energy footprints of the | 119 ICT sector
Chapter III: Risk-Benefit analysis
Improves recognition, brand value, and provides positive advertisement: it leads to financial benefits but difficult to quantify. Enables to meet stakeholders’ expectations: Supply chains are becoming more and more transparent so that more communication is an advantage. Furthermore, reporting can be a competitive advantage for some important tenders: it can be seen as “compulsory” in practice for large companies. Raises awareness amongst employees. Saves energy (e.g. through video-conferencing systems, server virtualisation, better building energy use) and results in associated cost savings.
120 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Chapter IV: Policy Scenarios This chapter presents three different public policy scenarios considering GHG emissions reporting at the company level and provides a preliminary discussion about their different characteristics. Section 4.1 presents the three policy scenarios defined. Each policy scenario is then discussed in a separate section, following a three steps structure: generic considerations; specific risk-benefit analysis; and methodological analysis.
4.1. Scenarios definitions and assessment approach The defining characteristics for different reporting scenarios are: Its level of obligation: two main levels can be distinguished, which are voluntary and mandatory. In a voluntary reporting situation, possible incentives can be implemented, before the reporting (i.e. financial incentives to support the reporting process) or after the reporting (e.g. incentives depending on the outcomes of the reporting). The final use of the results: three main options can be observed. These consist of: whether the results will be made public; whether the results will be kept confidential to companies; or whether the results will be used as the basis for minimum requirements (or reduction targets). Combining these two variables and their possible values leads to six possible policy scenarios. Table 23 summarises the validity of the possible approaches. As binding targets would likely require a mandatory reporting requirement, the voluntary level of obligation is deemed not feasible. Furthermore, a mandatory and confidential reporting is estimated inappropriate and unlikely to happen, leaving a total of four potential policy scenarios.
Targets
Voluntary
Mandatory
()
Public
Confidential
Table 23: Validity of different reporting scenarios
In the context of this study, the voluntary reporting represents a business-as-usual (BaU) scenario as no mandatory GHG emissions reporting requirement is currently implemented
Towards an overall measurement methodology of the carbon and energy footprints of the | 121 ICT sector
Chapter IV: Policy scenarios
for the ICT sector, both at the product and company level. Companies are free to report their GHG and energy footprints, or/and the footprints of their products. For instance, such reporting can be used for internal management of the environmental strategy (in which case, the reporting is usually private), or also to improve the competitiveness of the company by considering the environmental responsibility as a marketing advantage (in which case, the reporting is public). The policy maker has a very limited role to play in such voluntary reporting schemes, as companies are free to choose the methodology to follow, the frequency of updates, the use of the outcomes, etc. For this reason, such reporting will not be illustrated by the scenarios defined in this study. Also, a reliable quantitative assessment of such scenario is difficult and has to rely on numerous assumptions. However, the effort towards a harmonised and common methodological framework can be driven by the policy maker. Therefore, the establishment of a methodological framework to report GHG emissions is another variable that can be introduced in the definition of scenarios. All chosen scenarios consider company reporting, as this approach is more widespread than product reporting to date. Some considerations that are discussed within each scenario include: The timeline of the policy implementation: in one or several progressive steps, continuous evolution, etc.; and The evolution of the scope of the policy implementation: possible thresholds for progressive extension of the scope (e.g. priority sectors, coverage of SMEs). The proposed policy scenarios (and sub-scenarios) obviously have their own strengths and limitations which are presented for each scenario. Regarding the geographical scope, the policy scenarios cover the EU-27. On the one hand, this requires achieving the challenge of the harmonisation of the reporting methodological framework for all MS as well as types of companies (multinational as well as SMEs)83. On the other hand, the implementation of such policy scenario at the EU level would only represent a first and necessary step towards a global approach, given the international stakes of the ICT sector. The three policy scenarios that were chosen are presented below. These scenarios are compared to the Business-as-Usual (BaU) scenario. BaU scenario: It considers the absence of any future mandatory EU measure concerning GHG emissions reporting of companies, which may include communication and dissemination activities. Companies are therefore free to voluntarily report their emissions according to the different reporting initiatives and methodologies, and also may be subjected to the existing or future reporting regulations implemented at the national levels.
83
In particular, according to previous feedback from stakeholders in ERM (2010) (not specifically for the ICT sector), there was some scepticism about how different policy options could be designed to avoid additional reporting burdens for companies who also operate outside the EU-27.
122 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Scenario I: Voluntary public reporting, with some mandatory methodological elements In this scenario, the company is free to carry out a public reporting of its GHG and energy footprint. However, to improve the consistency and comparability of such reporting, the methodological approach is conditioned so that the key elements are implemented in a harmonised way, e.g.: System boundaries (scope and cut-off criteria); Reporting period and reporting validity; Data requirements (data quality and data sources); Considerations for carbon offsets; and Reporting requirements (including disclosure of methodological approach used). Scenario II: Mandatory public reporting All companies have to carry out a public reporting of their GHG emissions. Different levels of methodological elements can result in three possible sub-scenarios: Sub-scenario II.a: no mandatory methodological elements: companies can report according to the methodological framework of their choice. Sub-scenario II.b: some mandatory methodological elements: like in Scenario I, but some elements of the methodological framework are mandatory. Sub-scenario II.c: full mandatory methodology: companies reporting according to a common and compulsory methodology. The reporting results may be available through different communication means, e.g. company Internet website, or shared reporting platform. No requirement is set on the reporting results, so that they are mainly expected to be an internal management driver or to fulfil a request from a stakeholder. Scenario III: Mandatory public reporting, mandatory methodology with binding targets All companies are subjected to a mandatory public reporting, made according to a common and compulsory methodology (i.e. same requirements as for Sub-scenario II.c). In addition, the companies are subjected to binding targets. Several alternatives are possible concerning the definition of the binding targets: financial penalties could be applied to companies scoring over a certain threshold, financial incentives could be awarded to companies scoring below a threshold, or both “bonus-malus” effects applied together. The level of the penalties/incentives may be defined by the policy maker, or may be subjected to market fluctuations, e.g. depending on the overall results of a whole sector. Both public reporting and private reporting could be associated with a mandatory reporting with binding targets. Because the public reporting is estimated to be more likely and sensible in this case, the scenario is defined under this assumption. Table 24 summarises the mandatory/voluntary aspects of the scenarios, and their methodological framework.
Towards an overall measurement methodology of the carbon and energy footprints of the | 123 ICT sector
Chapter IV: Policy scenarios
Table 24: Summary of the three studied scenarios Voluntary public reporting
Mandatory public reporting
No mandatory methodological aspects
BaU scenario
Sub-scenario II.a
Some mandatory methodological aspects
Scenario I
Sub-scenario II.b
Full mandatory methodology
Sub-scenario II.c
Mandatory public reporting with binding targets
Scenario III
These three scenarios are further discussed and evaluated in the following subsections, according to the following approach: Generic considerations regarding the policy scenario are presented: basis and objectives of the policy measure, ability to meet policy needs, specific considerations related to the ICT sector, links with existing/planned measures, resources required for the EC (European Commission) and MS (Member State) for implementation, description of the possible sub-scenarios, and stakeholders’ feedback. Specific risk-benefit analysis: based on the stakeholders’ interview, the generic risk-benefit analysis presented in Chapter III will be built upon in order to refine the risks and benefits in regards to each policy scenario. The analysis remains mainly qualitative, but quantitative elements are included when available. It will focus on the environmental and economic aspects. Finally, a methodological assessment is carried out in order to understand the best methodological basis that could be used for each policy measure, based on the existing initiatives and methodologies (see Chapter II). Initiatives are also taken into account, mainly for the reporting considerations. Key and optional features are identified for each policy scenario and their presence in the existing initiatives and methodologies is evaluated based on the findings of Chapter II.
124 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
4.2.
Scenario I
I. Voluntary public reporting, with some mandatory methodological elements
4.2.1.
Generic considerations 4.2.1.1.
BASIS AND COVERAGE OF THE POLICY MEASURE
The implementation of a voluntary public GHG emissions reporting scheme would aim at supporting such reporting for companies which are currently not doing it, compared to the BaU situation. Consequently, to avoid additional burden for policy makers and companies, the scheme should not cover companies and sectors that are already subjected to a mandatory reporting scheme. As the ICT sector is currently not within the scope of such measure (e.g. the ETS scheme), the whole ICT sector could be covered by this scenario. Table 25 presents the main objectives of Scenario I, by type of stakeholder. Table 25: Objectives of Scenario I, by stakeholder Targeted stakeholders
Objectives -
Companies
Investors
Supply Chain
-
To encourage businesses to assess and benchmark their GHG emissions performance, and to understand and reduce their GHG emissions To increase the uptake of GHG emissions reporting To provide a minimum level of comparability of the disclosed information, thanks to a harmonised base for communication
-
To improve investors knowledge about GHG emissions of companies and industry sectors
-
To raise awareness and encourage partners in the supply chain to report their GHG emissions To improve (environmental) communication along the supply chain
-
There are already a number of companies and organisations voluntarily involved in GHG emissions reporting schemes. About 62% of FTSE84 all-share companies referred to quantified figures on climate change or energy use within their business review in 2009 (UK Environment Agency, 2011). This is particularly supported by the existence of reporting initiatives such as the CDP, which is one of the most commonly implemented schemes, especially in large EU and US companies. The total number of CDP responding companies
84
Financial Times Stock Exchange.
Towards an overall measurement methodology of the carbon and energy footprints of the | 125 ICT sector
Chapter IV: Policy scenarios
worldwide went up from 235 in 2003 to 3 050 in 201185. 84% of the EuroFirst 300 companies (the top 300 EU companies, ranked by revenue) reported their emissions via CDP in 2010, vs. 82% of the Fortune Global 500 companies (the top 500 companies globally). Moreover, Bilan Carbone® (the French scheme) estimates a 5% growth per year for its implementation (ERM, 2010). However, the participation rate in voluntary schemes is much lower for SMEs, which cannot generally afford the same time and internal resources for such an initiative, if no external support is provided (ICAEW, 2009). Representatives from SMEs have indeed requested further support (guidance, funding and incentives) to support SMEs in measuring and reporting their GHG emissions (ERM, 2010). However, KMU (2007) states that the owners of SMEs dispose of a comparatively high level of “moral standards/ethical attitude” which shows that SMEs can constitute an adequate target for voluntary initiatives provided that they are given adequate support. Therefore, some efforts could be transferred from SMEs to policy makers (via the establishment of guidelines or a methodological framework), to decrease the direct costs of GHG emissions reporting. There is indeed a need for public support towards SMEs in general in terms of CSR activities (Austrian Institute for SME research, 2007). Regarding larger companies who are already implementing voluntary schemes, the policy measure should enable them to benefit from the re-use of their existing measurement and reporting procedures for the sake of cost efficiency. It could therefore be possible to have some differences of the scheme by thresholds of company size: SMEs could benefit from a simplified reporting scheme which would be more cost efficient for them, while large companies could benefit from a methodology that is close to what they already commonly implement.
4.2.1.2.
ABILITY TO MEET POLICY NEEDS
According to EPA (2009), the variation in methods used for calculations of GHG emissions results in inadequate information for stakeholders to base decisions about GHG emission levels and possible reductions. Compared to the BaU scenario, where voluntary schemes already exist, the added value of such policy measure would reside in the provision of some mandatory elements. Indeed, these mandatory methodological elements would ensure some minimum standards to be met (e.g. boundaries, reporting requirements), thus improving the comparability and consistency of the reported outcomes. Furthermore, some compatibility may be possible by trying to align the mandatory methodological elements with the most implemented existing scheme (e.g. GHG Protocol) if considered robust enough. However, as the methodological framework will not be fully defined, there may still be some gaps in comparability that all stakeholders should be aware of. Compared to the BaU scenario, the level of uptake would be likely to be superior thanks to this additional methodological effort from the policy maker, national authorities or SDOs (Standard Developing Organisations) that would reduce the direct costs of implementation for the companies. National governments appear to have an influence on 85
Carbon Disclosure Project, Global Sustainable Finance Conference, by Caspar von Blomberg. Available at: www.etechgermany.com/en/sustainablefinanceconference2011/conference_material/day1/Caspar_von_Blom berg.pdf
126 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
how companies report their GHG emissions, even for non-mandatory reporting (Ethical Corporation Institute, 2008), so there should not be any acceptability issue for a voluntary scheme proposed by national or EU authorities. However, it is difficult to foresee the level of implementation as it will be highly dependent upon practical considerations, such as the ease of use for SMEs, and the awareness of the scheme through positive feedback. Increasing awareness of the benefits of reporting and existing schemes to provide brand recognition is indeed one of the four options provided by DEFRA (2011) to enhance the voluntary reporting situation. The other three are: an increased support with CDP and other SDOs, which would improve the compatibility of this scenario as explained before; an increased work to develop sector specific voluntary agreements (in this perspective, implementation of an ICT sector policy is relevant); and bilateral voluntary agreements between government and companies including targets for reporting take-up and deadlines to review voluntary agreement performance. Regarding the last point, the voluntary nature of the policy obviously gives no guarantee of meeting policy objectives in terms of emissions reduction, and the implementation of the scheme will be mainly driven by the reputational influence of GHG emissions reporting. Nonetheless, guidance on target setting could be included within the methodological elements to foster actions beyond the mere reporting of GHG emissions.
4.2.1.3.
SPECIFIC CONSIDERATIONS RELATED TO THE ICT
SECTOR Since a certain level of comparability of the results should be ensured given the objectives of the scenario, a sufficient number of mandatory methodological elements have to be defined. Table 26 lists the main methodological elements and assess what are the ones that should be defined within a voluntary reporting scheme. Companies should be free to use any existing methodology in line with the mandatory elements, even if some recommendations could be provided based on the analysis of existing methodologies (see Chapter II). Obviously, these elements should also be defined based on the common practices in existing methodologies as much as possible, to favour a wider implementation of the scheme.
Towards an overall measurement methodology of the carbon and energy footprints of the | 127 ICT sector
Chapter IV: Policy scenarios
Table 26: Considerations for mandatory methodological elements (not exhaustive) of Scenario I Methodological element
Consideration
System boundaries (scope and cut-off criteria)
The scope of the assessment shall be precisely defined within the methodological framework. At least scopes 1 and 2 should be mandatory86. Regarding scope 3, its contribution can be very important for ICT companies therefore it should also be ideally reported within the scheme. It could be however that some scope 3 elements may be too complicated to assess with a satisfying level of quality for some companies, especially for SMEs (e.g. information about suppliers). Therefore, it should be determined whether partial (e.g. business travel only) or full scope 3 should be included (e.g. based on share of emissions), and the situation could be different depending on the size of the company or the specific subsector. Cut-off criteria used for the estimation of GHG emissions should be described and documented.
Reporting period and reporting frequency
The reporting period shall be agreed upon. The definition of a reporting validity does not seem necessary. If companies are satisfied with the reporting process, they will naturally reproduce it for each reporting period allowed by the reporting platform (if any). If they are not satisfied, their first reporting would still be an indication about their emissions for a baseline year, even if they choose not to keep on reporting.
Data requirements (data quality and data sources)
Data collection represents one of the most important and difficult tasks of GHG emissions measurement and reporting. In case too stringent requirements are set on data collection, the scheme may suffer from a lack of feasibility and limit the reporting frequency. Therefore, requirements on type of data shall be set only for the most important elements within the scope (e.g. primary data for onsite electricity consumption). A public database should be ideally provided for harmonisation of emission factors, GHG considered, etc. in order to facilitate the work of companies and increase the consistency of results.
Considerations for carbon offsets
Clear positions shall be adopted on how to account for carbon offsets. Carbon offsets could have to be reported separately, in order to indicate whether a company does invest in offsets, without distorting the overall figures reported, compared to other companies.
86
128 |
Reminder: the definitions of scopes according to the GHG Protocol are used.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Methodological element
Consideration
Reporting requirements
A reporting template shall be established in order to ensure consistency of the reporting, and a certain level of comparability, based on the other mandatory methodological elements. This reporting shall ensure transparency and enable to see important aspects and choices of the reporting, that have not been compulsory in the methodological framework.
4.2.1.4.
LINKS WITH EXISTING/PLANNED MEASURES
In terms of regulatory measures, the policy measure could be developed in alignment with EMAS (Eco-Management and Audit Scheme) Regulation87. The considerations presented above are consistent with EMAS scope and objectives. EMAS registered organisations have to report on their environmental performance. Emissions are part of the core environmental indicators. Sectoral (and cross-sectoral) reference documents will be developed in the coming years for priority sectors88. In particular, they will aim at helping SMEs to implement EMAS according to their size, financial capacity and organisation culture. Telecommunications is included as one of these priority sectors. At the MS level, the voluntary scheme may complement mandatory schemes where existing (e.g. French Grenelle II, upcoming measure under the UK Climate Change Act89), for companies not within the scope of these schemes (typically SMEs). Regarding the links with existing reporting measures, the mandatory methodological elements could be aligned as much as possible with the most widespread schemes. The Carbon Disclosure Project (CDP) is a successful voluntary scheme, which includes some mandatory methodological elements (data collection is made according to prepared questionnaires). By gathering and disclosing information through CDP, companies can begin the process of calculating their carbon footprint. In CDP (2011a), Information Technology is nonetheless the sector with the lowest average performance score while the only sector with no companies in the CPLI90 was Telecommunications. This reflects their lower than average number of emissions reductions activities as well as less frequent verification. It shows that there is still room for significant improvement in the implementation of voluntary approaches in the ICT sector. According to CDP’s feedback on voluntary reporting, the availability or quality of internal data and lack of resources are obstacles to engaging a voluntary scheme (PwC/CDP, 2010).
87
Regulation (EC) No 1221/2009.
88
Communication from the Commission - Establishment of the working plan setting out an indicative list of sectors for the adoption of sectoral and cross-sectoral reference documents, (2011/C 358/02). Available at: eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2011:358:0002:0005:EN:PDF 89
www.parliament.uk/documents/commons-vote-office/June_2012/20-06-12/3.DEFRA-Company-reportinggreenhouse-gas-emissions-by-quoted-companies.pdf 90
Carbon Performance Leadership Index. For more information, see: https://www.cdproject.net/enUS/Results/Pages/CDP-2010-performance-scores.aspx#cpli
Towards an overall measurement methodology of the carbon and energy footprints of the | 129 ICT sector
Chapter IV: Policy scenarios
On the other hand, three large IT companies and one manufacturer of consumer electronics are present in the top ten companies recognized on both the CDLI91 and the CPLI, which shows that some leaders of the sector are already very active in their GHG emissions reporting and management. As a general trend of CDP implementation, IT companies show inferior rates of best practice implementation (e.g. emissions reduction due to implementation of activities, implementation of emissions reduction targets, board or other senior management oversight) compared to all sectors figures. For verification of emissions, the percentage is less than 40% whereas it is around 60% for all sectors. This is not true for the telecommunications companies. These also have rates slightly lower than the average rates for all sectors, except for implementation of emissions reduction targets and board or other senior management oversight, where they perform better (CDP, 2011a).
4.2.1.5.
REQUIRED EC AND MS RESOURCES FOR
IMPLEMENTATION A Directive or Regulation would be a suitable regulatory text and would ensure that the scheme is implemented in all MS. The efforts required by individual MS may differ depending on their state of progress concerning this GHG reporting topics. In order to develop the mandatory methodological framework, a working group may be constituted with representatives from EU and national authorities, SDOs, the industry and existing reporting schemes. The definition of these elements constitutes an initial effort that should not be overlooked as the success and relevance of the policy measure highly depend on these. This work should be achieved by finding the right balance between building a convergence between existing schemes, relying on key elements from the most important ones, and filling possible methodological gaps, especially regarding the specificities of the ICT sector. Regarding the specific barriers for SMEs, the prevalent high degree of environmental regulations results in SMEs more rarely engaging in voluntary environmental activities (Austrian Institute for SME research, 2007), with differences between MS. Therefore, in order to encourage specifically SMEs and increase their GHG emissions reporting uptake, there is a need to harmonise and simplify as much as possible the existing regulations.
4.2.1.6.
DESCRIPTION OF DIFFERENT POSSIBLE
ALTERNATIVES Some practical considerations would need further discussions to make the policy scheme as convenient as possible. These include: The definitions of thresholds in the scope: in order to promote the uptake of the scheme for all types of companies, the mandatory methodological elements could differ depending on their size (e.g. number of employees) or emissions thresholds. In terms of 91
Carbon Disclosure Leadership Index. For more information, see: https://www.cdproject.net/enUS/Results/Pages/CDP-2010-disclosure-scores.aspx#cdli
130 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
sectoral coverage, priority sectors may be identified to develop additional methodological elements, but it would not be relevant to restrict the voluntary scheme to only specific ICT subsectors. The timeline of the policy implementation: depending on the sectoral and company type coverage (previous bullet points), the implementation may be done in several steps, if the methodological elements are not developed at the same time for SMEs and large companies for instance. Obviously, the methodological framework may require being progressively revised and updated. The frequency of reporting: annual reporting would be the most common and logical frequency of reporting. As the scheme is voluntary, this frequency can only be recommended and companies reporting their emissions every two or three years (or more) would nonetheless constitute a positive progress. Some companies are already voluntarily calculating and reporting their GHG emissions twice a year. The information provided in the mandatory reporting: it may be of different nature, e.g. absolute GHG emissions value, GHG emissions reduction value (targeted reduction), implementation of measures to reduce GHG emissions. Verification procedure: several options are possible to ensure the reliability of the reporting. The verification can be carried out by the policy makers/authorities, by a third party, or internally (selfcertification) without independent verification. In the context of a voluntary scheme, self-verification seems the most adequate option in terms of costs, for both the policy maker and companies, even if an external critical review would provide additional credibility and benefits to the reporting. However, companies could be required to provide supporting documentation under request. Also, some SMEs may be willing to carry out an external review, at least for the first reporting, in order to be confident in their assessment and results quality.
4.2.2.
Specific Risk-Benefit analysis 4.2.2.1.
ECONOMIC RISK-BENEFIT ANALYSIS
Before publishing their “Guidance on how to measure and report on your greenhouse gas emissions”, DEFRA carried out an impact assessment of this publication in 2009 (DEFRA, 2009b). The objective of the guidance was to provide additional information to increase the consistency and the transparency of the GHG measurement and reporting, especially for SMEs. This guidance is based on the GHG Protocol standard. The impact assessment
Towards an overall measurement methodology of the carbon and energy footprints of the | 131 ICT sector
Chapter IV: Policy scenarios
evaluated one-off costs92 and annual costs93 for a two years period, due to the publication and use of the guidance by UK companies: For large companies, one-off costs represent £60 for adjusting companies (i.e. already reporting according to another scheme), and £120 for newly reporting companies (on the basis of two hours work). For small companies, one-off costs are estimated at £35.7 per company, for both adjusting and newly reporting companies. For large companies, annual costs account for £1 050 for adjusting companies, and £6 300 for newly reporting companies. For small companies, these costs are £357 for adjusting companies and £1 250 for newly reporting companies. Overall, the impact assessment estimated total costs for companies of £17.1 Million94 over two years, whereas benefits were not monetised for a lack of quantitative evidence. The other key non-monetised benefits mentioned by DEFRA (2009b) include: potential nonmonetised savings from more efficient resource, energy use by UK businesses, improved carbon management and reduction in the level of GHG emissions for which UK business is responsible over and above that captured by existing government schemes. DEFRA (2012) provides monetised costs and benefits for different policy scenarios. In particular, it considers an enhanced voluntary reporting scenario (option 1), explaining that an increase in the number of companies measuring and reporting their emissions is not necessarily guaranteed and that it might not be the most significant emitters that take-up the reporting, so significant emissions reductions cannot be guaranteed. The costs/benefits assessment only covers costs and benefits related to UK emissions from UK companies, and only on-site emissions (direct and indirect energy) and freight transport emissions are considered, even if the policy option covers total operations emissions95. Even if the scope of this DEFRA scenario is not exactly the same as Scenario I, the related estimations constitute the most accurate quantitative figures that could be found. The calculations made are based on various assumptions: The central estimate is based on the assumption that an additional 100 companies take up reporting. The upper bound estimate assumes 200 additional companies take up reporting 92
Organisations familiarising themselves with the guidance document.
93
Administrative costs to an organisation using the guidelines. These costs include identifying which of its operations the organisation should include to measure its GHGs, identifying the activities undertaken by the organisation, which release GHGs, collecting data from these activities, converting this data into GHG emissions and reporting the GHG emissions data in an appropriate format. 94
Considering 2 000 large and 3 000 small companies adjusting (already reporting) for the first year, and 200 large and 3 000 small new companies reporting for each of the two years assessed. 95
Process emissions, overseas emissions and non-freight transport costs have not been monetised. Neither were intangible benefits to firms, e.g. from increased investment from improved information to shareholders, or increased sales from consumers.
132 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
and the lower bound one assumes no additional companies take up reporting. It is assumed that 50% of new voluntary reporters will be quoted companies (large or very large), as they will benefit most from reporting. The time horizon is 10 years. Benefits are provided as a range. The range includes a high scenario with emission reductions of 4% over the time horizon considered and a lower bound of zero. The costs and benefits refer to new reporters, i.e. additional companies that report compared to a baseline situation. Based on this, DEFRA impact assessment evaluates a range of total benefits between 0 and £94 Million, a central estimation of total costs of £6.3 Million, and net benefits between 0 and £82 Million for companies. Compared to the first impact assessment (DEFRA, 2009b) where benefits were not quantified, costs are much smaller than the £17.1 Million calculated over a two year period: it can mainly be explained by the assumptions of the voluntary reporting uptake which are very different. Given the many assumptions made and specificities of the assessed scheme, it is not estimated relevant to extrapolate these results to the EU level. According to DEFRA (2012), the proportion of small firms estimated to undertake voluntary reporting is approximately 1% of all small companies. As their emissions level are much lower than emissions from large companies, the influence of small companies on the overall environmental and costs picture is not expected to be important. However, at the company level, GHG measurement and reporting may still represent an interesting net benefit. The total costs of reporting for SMEs are estimated at £1.9k per annum for medium companies and £1.25k per annum for small companies. More generally, voluntary reporting has the following advantages (PwC/CDP, 2010): Lower costs to report voluntarily than to comply with regulation; Buy-in from business to requirements as they are often involved in the development of voluntary standards; and Self-regulation harnesses the collective interests of industry. It therefore allows companies to develop a reporting approach that meets the needs of its stakeholders and to harness innovation in reporting. It can also represent a first step towards a more ambitious GHG reporting policy: if successful, other scenarios (e.g. mandatory reporting) could be progressively implemented. On the other hand, the following limitations exist: Self-regulation may be insufficient or sub-optimal, partly because of a lack of reliability checks of the information; To date, it has resulted in inconsistent and incomparable information, even if response rates may be high.
Towards an overall measurement methodology of the carbon and energy footprints of the | 133 ICT sector
Chapter IV: Policy scenarios
Disclosure of information may be restricted to positive performance or those that help their own self-interest: “Voluntary codes can be manipulated for any desired outcome by the company concerned, while at the same time obscuring all means to see it as a legitimate accountability tool for stakeholders” (Doane, 2002). The benefits relate mainly to companies while the limitations concern mostly the regulator and society as a whole. It is clear that such a scheme, because it does not results in any constraint for the companies, has a favourable cost-benefit balance for them. In Scenario I, the definition of a partial methodological framework should mainly represent a benefit, if the methodology is well adapted to the company and facilitates the reporting implementation. If not it may be an additional cost (e.g. if reporting is already implemented with incompatible methodological elements). The resources required from different stakeholders to define this framework (regulators, SDOs, industry representatives) are additional costs, compared to the BaU scenario.
4.2.2.2.
ENVIRONMENTAL RISK-BENEFIT ANALYSIS
As explained above, the DEFRA (2012) scenario considers a range of 0-4% emissions reductions for companies implementing the voluntary scheme. Table 27 shows the total emissions of non-reporting companies in the baseline and for option 1: the emissions of new reporting companies (in % of the non-reporting companies emissions, and in tCO2), and the maximum annual emissions reductions within these emissions (the low bound is 0). Table 27: Annual maximum estimated GHG emissions savings, for voluntary reporting policy option (adapted from DEFRA, 2012) On-site non Freight CO2 GHGs Transport
On-site Total emissions of non-reporting companies (MtCO2e)
44
4
51
% of total emissions attributed to option
0.3%
0.3%
4%
Emissions of new reporting companies (tCO2)
141 647
12 075
1 809 044
Maximum estimated annual emission reductions (tCO2)
5 666
483
72 362
Option 1
78 511 tCO2 could therefore be saved annually in on-site and transport emissions due to the implementation of option 1 in the UK. Most savings would be achieved in the transport emissions. Focusing on GHG/carbon footprint may create a risk of burden shifting to other environmental impacts. Even if energy consumption represents one of the main
134 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
environmental stakes of the ICT sector, which is mainly depending on energy-using products, other environmental impacts such as material use and waste generation should not be neglected. In the case of voluntary reporting, it is estimated that the first emission reduction measures that may be taken by companies are the most obvious and cost-efficient ones. In particular, it is not likely that more energy-efficient equipment will be massively bought by SMEs and installed in order to reduce the energy consumption during the use phase of the equipment. The return on investment of such measures is indeed on the mid or long term while companies will target short term measures as much as possible to begin with. For instance, in a datacenter, there are many immediate actions, based on behavioural changes or power management that can be implemented in order to reduce the direct energy use, without having to buy new equipment (and increasing the resource use or waste generation). Therefore, the risk of burden shifting from GHG emissions to other environmental impacts in this specific situation of voluntary reporting, i.e. in a data centre, where emissions reduction actions may be limited, is not considered high. Furthermore, through the voluntary scheme, it may also be possible to progressively include other environmental impacts to measure and report, like the CDP for water usage. Even if companies may choose not to follow the approach for all environmental impacts, it would nonetheless result in an increased awareness of other environmental aspects.
4.2.3.
Methodology analysis
The definition of the best methodological framework shall be made by providing the most beneficial risk-benefit balance for all involved parties (policy makers, reporting companies, SDOs), i.e. maximised benefits by building upon the existing methodological basis, and minimised risks by reducing direct and indirect implementation costs and enhancing compatibility with other methodologies. Table 29 below presents the methodological considerations for Scenario I. It is assessed whether the existing methodologies and initiatives fulfil some required and optional features that the methodological framework of Scenario I should present. These features are based on the criteria and sub-criteria defined in Chapter II and the tables from Annex B are used as inputs. The following items represent required features: Usability – Language: for implementation at the EU level, the methodology shall at least be available in English. (Table 65) Usability – User-friendliness: because the policy measure will be voluntary under this scenario, it is essential that the supporting documents for the methodological framework are as clear, concise and pleasant as possible. (Table 65) Comparability – Scope: the mandatory and optional scopes shall be defined. (Table 67)
Towards an overall measurement methodology of the carbon and energy footprints of the | 135 ICT sector
Chapter IV: Policy scenarios
Comparability – GHG covered: the GHG covered shall be clearly stated. (Table 67) Comparability – GWP values: the GWP values to be used shall be clearly indicated. (Table 67) Comparability – Carbon offsets: the considerations on how to account for carbon offsets shall be defined. (Table 67) Comparability – Comparability of results: even if voluntary, the scheme shall ensure a minimum level of comparability between the reported results of different companies. Guidance and warning could be provided in order to inform under what conditions results would be fully comparable. (Table 68) Reliability – Involvement of relevant stakeholders in development of methodology: it shall be ensured that the policy measure and associated methodological framework are/have been built by joint efforts of all concerned stakeholders, i.e. policy makers, SDOs, and industry representatives. (Table 71) Transparency – Reporting requirements: beyond the mandatory methodological elements, the reporting format shall be harmonised and ensure a full understanding of the assumptions and calculations that have been made. (Table 73) Furthermore, some optional features (not as essential as the required features) are also considered: Usability – ICT specific examples: the provision of examples contributes to the ease of use of a methodology. (Table 65) Usability – Tool(s) provided: the provision of tool(s) generally facilitates the achievement of calculation by helping the practitioner in a pre-defined method of calculation, with given inputs and parameters, and helps the comparability of results. Therefore, it may support a higher uptake of a voluntary scheme. However, it would require additional efforts for the tool construction without guarantee beforehand of a wide implementation. (Table 65) Usability – Language: Additional translations into the different national languages would increase the usability for non-English speakers and non-native speakers. (Table 65) Comparability – Possibility to assess other indicators than GHG/energy footprint: the scheme could include other indicators than GHG/energy footprint in order to raise awareness of the other environmental stakes related to the ICT sector (e.g. resources consumption, water consumption, waste generation). However, it would require significant efforts to develop a parallel
136 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
methodological framework for other indicators, and it would increase the burden of reporting for companies so that they might be deterred from joining the voluntary scheme if it looks too demanding and ambitious. (Table 68) Comparability – Reduction targets: reduction targets could be recommended and encouraged by the scheme, being one of the outcomes of the GHG measurement and reporting process. (Table 68) Reliability – Provision of secondary/default data: the provision of a public database is considered as a recommended methodological point in order to facilitate the measurement, and to improve the consistency and comparability of the results. (Table 71) Reliability – Review: a third party review/verification would be a beneficial feature in order to increase the reliability of the results, and consequently of the whole scheme. (Table 71) Reliability – Uncertainty analysis: similarly, an uncertainty analysis increases the robustness of the results and of their possible applications. (Table 71) Applicability beyond the required scope, i.e. to other non ICTsectors (criteria not explicitly included in Task A). In Table 29, regarding the required features analysis, the red cells indicate that the methodology considered would not be suitable for the item described and has a limited applicability (in its current form) in the context of this policy scenario. For optional features, the green cells indicate that the methodology considered would bring additional benefits for the item described in the context of this policy scenario.
Note: The methodological elements that were previously determined as necessarily mandatory for Scenario I are: the system boundaries, the reporting period, the data requirements, considerations for carbon offsets, and the reporting requirements. Table 28 describes the investigated features that are covering them in Table 29 analysis (even if this coverage is not exhaustive, e.g. for data requirements).
Towards an overall measurement methodology of the carbon and energy footprints of the | 137 ICT sector
Chapter IV: Policy scenarios
Table 28: Coverage of the mandatory methodological elements by the Chapter II criteria
138 |
Mandatory methodological element
Criteria - Sub-criteria (from Chapter II) covering the element
System boundaries
Comparability – Scope
Reporting period
None (but all methodologies and initiatives consider an annual reporting so that this element is covered)
Data requirements
Comparability – GHG covered Comparability – GWP values
Considerations for carbon offsets
Comparability – Carbon offsets
Reporting requirements
Transparency – Reporting requirements
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Table 29: Methodological considerations for Scenario I Features based on Criteria - Sub-criteria (from 96 Chapter II)
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
ISO 14064
Bilan Carbone®
CDP
97
ITU-T L.1420
ADEME - ICT sectoral guidance
Required features Usability – Language: available in English Usability – User-friendliness
Comparability – Scope
Yes
Yes
Yes
Yes
Yes
Yes
No
Good
Good
Average
Good
Good
Good
Very good
Scope 3 optional
Focus on scope 3 only
Scope 3 optional
All scopes recommended, but no mandatory basis
Scope 3 optional
Scope 3 optional
Not applicable (guidance provided for all scopes)
Mandatory
Not explicitly specified, but reference to the GHG Protocol standards
Mandatory
Not explicitly specified, but reference to the Bilan Carbone®
Mandatory
Not explicitly specified, but reference to the Bilan Carbone®
Not specified
Not specified
Comparability – GHG covered
Mandatory
Mandatory
Not specified
Comparability – GWP values
Mentioned but not mandatory
Mandatory (restricted choice)
Mentioned but not mandatory
Mandatory
Not specified by CDP. This depends on the specific methodology used for accounting
Project reductions that are to be used as offsets should be quantified using a project quantification methodology (e.g. GHG Protocol Project Quantification Standard).
GHG offsets can be taken into account to achieve reduction targets (but reported separately)
Not specified
Offsetting mechanisms are deliberately excluded
Offsets should not be deducted from the results but can be reported separately
Comparability – Carbon offsets
96
Please refer to body text for complete explanation of the features.
97
CDP is an initiative, while others are all methodologies.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector | 139
Chapter IV: Policy scenarios
Features based on Criteria - Sub-criteria (from 96 Chapter II)
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
ISO 14064
Bilan Carbone®
Warning and guidance are provided in order to do comparisons over time and between two companies
ITU-T L.1420
ADEME - ICT sectoral guidance
The results are not comparable (the methodology is not specified)
Over time only
Not applicable
CDP
97
Offsets may be converted into credits when used to meet an externally imposed target.
Over time only
Over time only
Specifications given for over time comparisons
Reliability – Involvement of relevant stakeholders in development of methodology: policy makers, SDOs, industry
Working group with industry experts, and experts from other SDOs
Working group with industry experts, and experts from other SDOs
Diverse organisations in liaison with ISO TC207/SC7 including EC, CDP, ECOS, WRI
Developed by ADEME, involvement of industry, experts, public organisations and local authorities
Developed by CDP, with support from consultants and experts
Developed by a specific working group of ITU, including various ICT industries
Developed by ADEME, involvement of industry, experts, research institutions
Transparency – Reporting requirements
Detailed reporting required
Detailed reporting required
Detailed reporting required
No specific requirements
Questionnaires provided, but some gaps, e.g. data sources and individual assumptions
Reporting and internal documentation required
Not applicable
Yes
Yes
Comparability – Comparability of results
Optional features Usability – ICT specific examples
Usability – Tool(s) provided
Usability – Language: available in national
No
No
No
No
Yes
Specific tool for semiconductors
Sample Scope 3 GHG Inventory Reporting Template is given as example
No
Yes (but only to people who attended the specific training session)
No proper tool provided, questionnaires and guidance provided
No
No proper tool provided, but secondary data for ICT sector
Available in the most spoken languages
No
Yes, in national adaptations of the
French, Spanish
Some documents are available in multiple
No
No
140 | Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Features based on Criteria - Sub-criteria (from 96 Chapter II) languages
Comparability - Possibility to assess other indicators that GHG/energy footprint
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
worldwide (English, Portuguese, Spanish for the EU)
No
ISO 14064
Bilan Carbone®
standard
No
CDP
97
ITU-T L.1420
ADEME - ICT sectoral guidance
languages
No
No
Yes, water usage
No
No
Reduction targets are requested within “CDP Carbon Action”
Examples of reduction actions are provided
Reduction targets are encouraged
Comparability – Reduction targets
Guidance provided
Guidance provided
Not mentioned
Reduction targets are part of the objectives of Bilan Carbone®, guidance provided
Reliability – Provision of secondary/default data
Via provided tools
No
No
Provision of emission factors database
No
No
Secondary data are provided and suggested
If public comments on the GHG emissions of the company are made, third party verification is required
Not mandatory
Third party verification strongly supports CDP’s strategic priority of increasing data quality and as such, is awarded highly in the scoring system. Different verification standards are mentioned.
Not described
Not described
Required in questionnaires
Mandatory, in accordance with ISO 14064
Uncertainty related to data is required
Yes
No
No
Reliability - Review
Reliability – Uncertainty analysis
Applicable beyond the required scope: other non ICT-sectors
Not mandatory, guidance provided
Not mandatory, guidance provided
Recommended, but not mandatory, tool provided
Recommended, but not mandatory
Recommended
Mandatory, the uncertainty related to the results must always be explicitly shown with the results
Yes
Yes
Yes
Yes
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector | 141
Chapter IV: Policy scenarios
The above table is a pre-screening to identify the most suitable methodological basis for Scenario I, aiming at increasing the level of support from EU and national authorities to companies by providing guidance and mandatory methodological elements within the reporting scheme. The purpose is to promote the uptake of such a scheme amongst all types of ICT companies, regardless of their size or ICT subsector. Regarding the required features, all methodologies/initiatives have at least two limitations (i.e. two red cells). ITU-T L.1420 provides the practitioner with the necessary mandatory requirements (e.g. scope, GHG covered, GWP values, reporting) for Scenario I, except the considerations for carbon offsets. Similarly, the GHG Protocol Corporate Standard does not specify the GWP values to be used, while the Bilan Carbone® does not state the mandatory and optional scopes. Specifying the scopes, GWP values, or the considerations for carbon offsets is not a methodological structural change and could be done directly in the policy scheme by the policy maker (e.g. like in the Grenelle II law in France). The GHG Protocol Scope 3 Standard specifies GWP values so that the two GHG Protocol standards combined would be relatively appropriate for a scope 1-2-3 assessment. ISO 14064 does not specify enough parameters for Scenario I application but it represents the common and historical basis for the other methodologies. There are no current methodologies or initiatives that consider all scopes (1, 2 and 3) as mandatory. Given the importance of scope 3 emissions for some companies of the ICT sector, requiring all emissions to be reported could constitute an important progress, even if only simplified or partial reporting of scope 3 emissions is achieved. If this reporting is not feasible with reasonable resources, the scheme should rather focus on mandatory scopes 1-2 only. For all of the methodologies except the Bilan Carbone®, the level of comparability of the GHG emissions outcomes is only sufficient to make comparisons over time (for a given company), and not across different companies. However, this item may not be critical in the context of Scenario I, depending on the policy maker expectations: even if the GHG emissions outcomes are not fully consistent in their scope and calculations, Scenario I would increase the uptake of reporting and internal management (and reduction over time) of GHG emissions could still be achieved. Using an ICT specific methodology for Scenario I (e.g. ITU-T L.1420) may constitute a limitation as the scheme could not be implemented across sectors based on such a methodology. One common scheme would have a better visibility and simplicity for all sectors. This is illustrated by the CDP, which is now a well-known global initiative across sectors. Looking specifically at reporting, the CDP seems an appropriate basis for consistency and transparency, provided it is applied with a methodology ensuring the mandatory methodological elements. It is interesting to note that the CDP already includes many of the optional features analysed, e.g. it considers water usage, which none of the other methodologies does. It does not include some others optional features, such as the provision of tools and secondary databases to facilitate the assessment, or the guidance on target reductions. Such optional tools could be specifically developed (at the ICT or general level, depending on the policy targets and resources available) in order to facilitate the reporting for practitioners, especially for SMEs.
142 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
4.2.4.
Stakeholders’ opinions
Stakeholders are split on the voluntary nature of the reporting in this Scenario I: several think that this Scenario would be “acceptable” or “suitable as some companies are already doing a good job”; it is also mentioned as the best scenario by one representative of the industry. On the other hand, several stakeholders also think that voluntary reporting is not sufficient, in particular to result in significant changes and emissions reductions. It presents a risk of green washing, or focusing on the positive performance only. One person summarises that “it depends on the targets you want to achieve”. Some of the benefits of Scenario I mentioned during the interviews include: The scenario allows some companies to have a reputation of leaders in environmental responsibility. It fosters creativity and the collective effort within the sector. An educational benefit: it is hard to say what would be the influence of this scenario on SMEs but they need to be encouraged to more reporting. Low time and cost burden on ICT companies. On the other hand, some risks expressed are: Without the obligation to report, small companies, companies without a strong brand, as well as poor environmental performers may choose not to report. Regarding the definition of the mandatory methodological elements validated by the regulator, the concept is interesting for most of them as they would be useful to provide a more level and harmonised reporting system, and improve comparability. The understanding and choices for the reporting by the companies would be easier. However, two stakeholders underline that the methodological framework would have to be carefully defined, especially concerning the specificities of the ICT sector (long supply chain, many components in ICT products). In particular, a need to specify data quality requirements was expressed by one person in order to simplify the uptake. Several stakeholders believe that the existing standards are suitable to provide the necessary basis already. The EC could support them and provide additional recognition to companies that perform well.
Towards an overall measurement methodology of the carbon and energy footprints of the | 143 ICT sector
Chapter IV: Policy scenarios
4.3.
Scenario II II. Mandatory public reporting
4.3.1.
Generic considerations 4.3.1.1.
BASIS AND COVERAGE OF THE POLICY MEASURE
Scenario II considers the implementation of a mandatory public reporting. There is a demand from investors for such GHG emissions reporting, particularly to improve the quality and coverage of disclosures to a level which voluntary reporting alone is unlikely to achieve (DEFRA, 2010). This objective is nonetheless not directly related to the voluntary or mandatory status of the reporting, but rather depends on the practical details of its implementation, and in particular the mandatory methodological framework to be used. These considerations will be discussed later through three sub-scenarios. Compared to the voluntary reporting, a mandatory measure would guarantee the uptake of GHG emissions reporting by all companies within the scope of the measure and to meet other policy objectives. Table 30 presents the objectives of Scenario II, by type of stakeholder. Some of them are common with the objectives of Scenario I given that it is a scenario going one step further, but the new ones, enabled by the mandatory reporting appear in bold in the table.
144 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Table 30: Objectives of Scenario II, by stakeholder Targeted stakeholders
Objectives -
Companies
-
Investors
-
-
Supply Chain -
To force businesses to assess and benchmark their GHG emissions performance To guarantee a minimum level of uptake of GHG emissions reporting To encourage businesses to understand and reduce their GHG emissions To provide a minimum level of comparability of the disclosed information, thanks to a harmonised base for communication (this level depends on the sub-scenario II.a, II.b, or II.c considered) To reach a standardisation of company footprints (depends upon the sub-scenario) To establish a harmonised base for procurement and incentives provided by the EU and MS (depends upon the sub-scenario) To improve investors knowledge about GHG emissions of companies and industry sectors To establish a harmonised base for communication on company GHG emissions To inform investors about best performing companies in terms of GHG emissions To drive investors towards low carbon companies and discourage investments in environmentally irresponsible companies To raise awareness and encourage partners in the supply chain to report and decrease their GHG emissions, even if not within the scope of the mandatory reporting To encourage suppliers to reduce their GHG emissions by including environmental criteria in the procurement processes To establish a harmonised base to communication on company GHG emissions and improve (environmental) communication in the supply chain
DEFRA (2012) states that a regulation is required because voluntary approaches have not led to a sufficiently high level of reporting or consistency of reporting. Other mandatory regulations at the national and EU levels already exist. Like for Scenario I, to avoid additional burden for policy makers and companies, the scheme could avoid covering companies and sectors that are already subjected to a mandatory GHG emissions reporting scheme. As the ICT sector is currently not within the scope of such measure (e.g. the ETS scheme), the whole ICT sector could be covered by this scenario. Alternatively, the
Towards an overall measurement methodology of the carbon and energy footprints of the | 145 ICT sector
Chapter IV: Policy scenarios
scope of this measure could also cover sectors already concerned by other reporting requirements, provided that synergies are established between the existing measures, in order to lighten the burden for companies within the scope. In particular, companies should be able to benefit from and re-use their existing measurement and reporting procedures for the sake of cost efficiency. Different alternatives are possible concerning the coverage of this measure. For example, three different scopes are defined in DEFRA (2011): all quoted public companies; all large companies (company size is defined based on employment, gross assets and turnover in the UK by the Companies Act); all companies whose electricity consumption exceeds a threshold. The latter would leave out companies with low electricity consumption but high emissions from other activities. Given that ICT sector companies can have different GHG emissions profiles, the electricity thresholds would need to be specifically defined across sub-sectors having similar profiles. The measure should plan different steps used to extend the scope if the steps are progressively successful.
4.3.1.2.
ABILITY TO MEET POLICY NEEDS
The mandatory GHG emissions reporting would ensure that all covered companies measure and publicly report their emissions. However, the drivers for company reporting here would clearly be regulation compliance, in order to avoid possible penalties. Therefore, no additional emissions reductions are guaranteed compared to a BaU scenario. Expectations are nonetheless at least similar to Scenario I in terms of target setting and emissions reduction: companies that would commit themselves to go beyond the voluntary reporting scheme are likely to take the opportunity of a mandatory scheme to implement the same approach. These companies would become more economically efficient through a full GHG management cycle, and contribute to raising awareness of the benefits of GHG emissions management, beyond reporting. Comparability and compatibility of the reporting will depend on the methodological framework defined: In Sub-scenario I.a, where no mandatory methodological elements are defined: no consistency would be ensured in the disclosures. Scopes, emission factors, GHG included, and reporting format may be different for every company. Verification may not be done by most of the companies. Compared to the BaU scenario, the quantity of information available to stakeholders would increase, but as no effort would be made on the harmonisation and comparability, this may result in even more confusion for them to take GHG emissions into account in their activities. In Sub-scenario II.b: some mandatory methodological elements would be defined: like in Scenario I, minimum consistency and comparability would be ensured while stakeholders should remain aware of the limitations of the possible comparison. Such approach could represent the best situation in terms of costs for
146 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
companies, if the methodological framework is adequately defined and is a good compromise between comparability of the disclosures, and re-use of the existing processes in companies. In Sub-scenario II.c, where a full mandatory methodology is defined: this sub-scenario would provide the best quality and comparability of information reported. On the other hand, it is the one with the highest costs, both for companies because of the methodology application, and for regulators because of the development of a full methodology and verification costs. For all sub-scenarios, a platform for public reporting would be required to make the information available to all interested stakeholders. As discussed above, the level of consistency of the information provided on this platform will rise with the methodological mandatory requirements. Comprehensive reporting rules increase public confidence on the disclosures. Re-use of an existing and recognised reporting platform should be considered in order to reduce costs.
4.3.1.3.
SPECIFIC CONSIDERATIONS RELATED TO THE ICT
SECTOR The European Commission has several options regarding the methodologies to use. Efforts could be made either to make existing methodologies converge, or to develop a harmonised EU methodology based on the existing ones, or to make use of one already existing in its current state. The development of a harmonised methodology, allowing complete comparability, represents a key stake to reduce the risks and barriers of GHG emissions reporting (ERM, 2010). The different sub-scenarios result in a different level of comparability of the GHG emissions disclosures: in sub-scenario II.a, the mandatory reporting does not need to follow a mandatory methodology for the calculation of the GHG emissions. Companies are entirely free to choose their reporting scopes, boundaries, data to use, etc. No minimum level of comparability is ensured and the objective of this sub-scenario is rather to increase the uptake of GHG reporting for internal management purposes. This sub-scenario has a high risk of leading to “green washing”, even with a high level of transparency as stakeholders might not be willing to spend much time to understand what the emissions include and would just have a look at the disclosed figure. Consequently, despite the absence of mandatory requirements for the calculation of GHG emissions, there could be a mandatory format for reporting, to ensure that the minimum information is available to understand the context of the results.
Towards an overall measurement methodology of the carbon and energy footprints of the | 147 ICT sector
Chapter IV: Policy scenarios
in sub-scenario II.b, similarly to Scenario I, a sufficient number of mandatory methodological elements have to be defined to ensure a certain level of comparability. Companies should be free to use any existing methodology in line with the mandatory elements, even if some additional recommendations could be provided. These mandatory elements should also be defined based on the common practices in existing methodologies as much as possible, to favour an easier implementation of the scheme by companies already voluntary reporting. in sub-scenario II.c, the full methodology is defined and mandatory so that comparability is guaranteed. In practice, the full compliance with the methodology may be difficult to achieve for companies for practical reasons, but this will depend on the level of requirement of the methodology. Table 31 lists the main methodological elements and assess what are the ones that should be defined within sub-scenario II.b. Compatibility of the mandatory methodological elements with other methodologies may be increased by basing the requirements on the most commonly used schemes.
Table 31: Considerations for mandatory methodological elements of sub-scenario II.b Methodological element
Considerations
System boundaries (scope and cut-off criteria)
The scope of the assessment shall be precisely defined within the methodological framework. At least scopes 1 and 2 should be mandatory. Regarding scope 3, its contribution can be very important for ICT companies therefore it should also be ideally reported within the scheme. It could be however that some scope 3 elements may be too complicated to attend for some companies, especially for SMEs (e.g. information about suppliers). Therefore, it should be determined whether partial (e.g. business travel only) or full scope 3 should be included, and the situation may be different depending on the size of the company or the specific subsector (see Figure 7 and Figure 8 in Chapter II). The methodology shall also clearly states whether equity share, operational or financial control is considered to know who is responsible for a facility’s emissions. Financial control would not be recommended for the ICT sector given that many buildings are not owned by companies so that the footprint would not be fully representative of their business.
Reporting period and reporting frequency
The reporting period for GHG emissions by a company shall be agreed upon. The reporting shall be valid over a limited period of
148 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Methodological element
Considerations time to be defined (e.g. between one and three years), in order to force companies to update their reporting and think about its evolution.
Data requirements (data quality and data sources)
Data collection represents one of the most important and difficult task of GHG emissions measurement and reporting. In case too stringent requirements are set on data collection, the scheme may suffer from a lack of feasibility. Therefore, requirements on type of data shall be set only for the most important elements within the scope (e.g. primary data for onsite electricity consumption is feasible and usually has an important impact on the final result). In particular, primary data for processes under the control of the company carrying out the study seems feasible. Furthermore, it will be important to specify the raw materials and components, for which a collection of primary data would be mandatory. A public database shall be provided for a common use of emission factors98, GHG considered, secondary data to use in case primary data is not available, etc. In particular, the secondary data may be defined according to a “high emissions” profile, so that a company able to get primary data instead of using the default data would reduce its GHG emissions.
Considerations for carbon offsets
Clear positions shall be adopted on how to account for carbon offsets. Carbon offsets could have to be reported separately, in order to indicate whether a company does invest in offsets, without distorting the overall figures reported, compared to other companies.
Reporting requirements
A reporting template shall be established in order to ensure consistency of the reporting, and to guarantee that the same types of information are available. This reporting shall ensure transparency and enable to see important aspects and choices of the GHG measurement that have not been compulsory in the methodological framework. In particular, the following items shall be disclosed: the overall GHG emissions, the reporting period, the certification that the mandatory methodological framework was followed, important assumptions made for the calculation, possible quality limitations. In order to ease the use of the disclosures, results could be presented by sectors, sub-sectors with leadership indices,
98
E.g. like the DEFRA database: www.defra.gov.uk/publications/2012/05/30/pb13773-2012-ghg-conversion/
Towards an overall measurement methodology of the carbon and energy footprints of the | 149 ICT sector
Chapter IV: Policy scenarios
Methodological element
Considerations highlighting the best performing companies according to efficiency indicators (GHG emissions by employee, by turnover, etc.).
4.3.1.4.
LINKS WITH EXISTING/PLANNED MEASURES
The mandatory scheme and associated methodological framework would need to be compatible, as much as possible, with existing EC and national legislation on GHG emissions reporting. Existing policies already have wider objectives by including further requirements, e.g. by setting targets for emissions reductions, and the new scheme could not be harmonised with these aspects. It may be possible to develop a tool or reporting platform, allowing the extraction or reporting according to different regulations (e.g. EU ETS, UK CRC, French Grenelle II) based on one single process. There are companies already voluntarily reporting their emissions who are trying to build consistency between their voluntary reporting and principles set by national regulations. The existing GHG emissions regulations at EU, Member State and third country levels, are briefly presented below: The UK recently committed to implementing the inclusion of emissions data for quoted companies in their annual report, from April 201399. It is estimated that this reporting will save four million tonnes of CO2 emissions by 2021. Evidence from the first two years of reporting by quoted companies will be collected to take a further decision in 2016 on whether the reporting requirement should be extended to all large companies100. A draft regulation was made available for comments. Still in the UK, the CRC (Carbon Reduction Commitment) Energy Efficiency Scheme is a mandatory scheme aimed at improving energy efficiency and cutting emissions in large public and private sector organisations, responsible for around 10% of the UK’s emissions101. For each compliance year, participants must order, pay for and surrender allowances to cover their annual CRC emissions in tonnes of CO2. Organisations qualify as participants if they had at least one half-hourly electricity meter, settled on the half hourly market and if they consumed at least 6 000 MWh through all half-hourly meters during a calendar year. The
99
www.defra.gov.uk/news/2012/06/20/greenhouse-gas-reporting/
100
Written ministerial statement from 20 June 2012, available here : www.parliament.uk/documents/commons-vote-office/June_2012/20-06-12/3.DEFRA-Company-reportinggreenhouse-gas-emissions-by-quoted-companies.pdf 101
150 |
More information at : www.decc.gov.uk/en/content/cms/emissions/crc_efficiency/crc_efficiency.aspx
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
scheme features a range of reputational and financial drivers, which aim to encourage organisations to develop energy management strategies. For instance, the better an organisation performs in terms of cutting its emissions, the higher it will appear in the annual Performance League Table102 and achievement tables. The scheme is designed to tackle CO2 emissions not already covered by Climate Change Agreements (CCAs) and the EU ETS. Because of a high level of complexity and heavy burden expressed by companies, a simplification procedure, including a public consultation, is currently ongoing103. The legislation on a simplified CRC will come into force in April 2013 for the start of the second phase. In France, the Grenelle II law implements a mandatory GHG emissions reporting for companies that employ more than 500 employees. The first assessment needs to be carried out before December 31st, 2012. Companies affected by this obligation are those that have their head office or stable establishments on French territory, and exceed previously mentioned headcount threshold. The GHG emissions assessment is public and has to be updated every 3 years. Scope 1 & 2 emissions are mandatory, scope 3 is optional (scope definition can be found in « Méthode pour la réalisation des bilans d’émissions de Gaz à effet de serre »104). Reporting format is already defined and available (Annex 3 of the methodology). At the EU level, the EU ETS, in Phase 2 until 31st December 2012, is considered as the first and biggest international scheme for the trading of greenhouse gas emission allowances. It works on the “cap and trade” principle and covers some 11 000 power stations and industrial plants in 30 countries. The number of allowances is reduced over time so that total emissions fall. In 2020, emissions will be 21% lower than in 2005. The ICT sector is currently not within the scope of the ETS. If the policy scenario is implemented beyond the ICT sector, interactions between the two schemes should be taken into account. In the United States, the Environmental Protection Agency (EPA) issued the Mandatory Reporting of Greenhouse Gases Rule (74 FR 56260). It requires reporting of GHG data and other relevant
102
crc.environment-agency.gov.uk/pplt/web/plt/public/2010-11/CRCPerformanceLeagueTable20102011
103
www.decc.gov.uk/en/content/cms/emissions/crc_efficiency/simplification/simplification.aspx
104
Méthode pour la réalisation des bilans d’émissions de Gaz à effet de serre conformément à l’article 75 de la loi n°2010-788 du 12 juillet 2010 portant engagement national pour l’environnement (ENE). Available at: www.developpement-durable.gouv.fr/Bilans-des-emissions-de-gaz-a.html
Towards an overall measurement methodology of the carbon and energy footprints of the | 151 ICT sector
Chapter IV: Policy scenarios
information from large sources and suppliers in the US. Facilities that emit 25 000 metric tons or more per year of GHGs are required to submit annual reports to EPA. Before this rule, several states had developed mandatory reporting rules, such as the California Mandatory Greenhouse Gas Reporting Rule, which has now incorporated by reference certain requirements promulgated by the EPA rule. Australia implements the National Greenhouse and Energy Reporting Act (NGER Act) since 2007. The first annual reporting period began on 1 July 2008, and organisations that meet a National Greenhouse and Energy Reporting (NGER) threshold must report their greenhouse gas emissions, energy production, energy consumption, and other information specified under NGER legislation.
4.3.1.5.
REQUIRED EC AND MS RESOURCES FOR
IMPLEMENTATION Given the mandatory property of the measure, a Directive or a Regulation would be required to enforce Scenario II. In the case of a Directive, more resources may be needed at the MS level for the practical choices. In particular, the opportunity for national adaptations may support the compatibility with existing national regulations. The resources required will highly depend on the three sub-scenarios: For Sub-scenario I.a, resources would be very limited as no methodological development is needed, and no verification other than verifying the existence of the reporting would be made (verification of the quality and method of the reporting is not feasible given that every company would be free in the measurement and reporting approach). In Sub-scenario II.b, more resources would be needed, in particular to create a working group in charge of developing the methodological framework. The scheme could include verification procedures which would require additional resources. Sub-scenario II.c would need the higher level of resources, for the development of the full mandatory methodology and the verification processes, which could be more exhaustive than for Sub-scenario II.b. It is also possible that given the higher level of requirements compared to the two other sub-scenarios, more companies will not be compliant with the scheme, at least during the first reporting year. More resources will be needed for the penalties application, but on the other hand, these penalties could be a source of additional financial resources.
152 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
4.3.1.6.
DESCRIPTION OF DIFFERENT POSSIBLE
ALTERNATIVES Some practical considerations could lead to various alternatives. These include: The definitions of thresholds in the scope: mandatory reporting would be more easily accepted by large companies, at least as a first step. The size thresholds of companies may be defined based on the number of employees, the turnover or the emissions level via an approximate indicator (e.g. electricity consumption) and should be carefully set, and in line with existing legislation. Depending on the company size, different sub-scenarios could be defined, e.g. implementation of sub-scenario II.a for SMEs and sub-scenario II.b or II.c for large companies. The timeline of the policy implementation: depending on the sectoral and company type coverage (previous bullet points), the implementation may be done in several steps, if the methodological elements are not developed at the same time for SMEs and large companies for instance. Obviously, the methodological framework may require to be progressively revised and updated, with possible guidance for specific ICT subsectors. The frequency of reporting: as GHG emissions reporting may be a demanding process for some companies not already familiar with this approach, the frequency for update should not be too high for the sake of acceptability. Reporting every 2-3 years would be more easily accepted than annual reporting for instance (e.g. like in French Grenelle II). The information provided in the mandatory reporting may be of different nature. In the case of Scenario II.c aiming at providing consistent and comparable information, absolute GHG emissions value and progress in terms of achieving binding targets are possible options before other alternatives in a second stage, such as GHG emissions scale (level compared to other companies), and best performing label to recognise the best performing companies. Compared to voluntary reporting, mandatory reporting would require the implementation of more a robust verification process, to promote the quality of disclosures. Different alternatives may be: no verification requirement of the GHG reporting and data used; internal verification of the reporting with proof of a transparent quality control process in place; or external verification made according to a recognised standard (limited or
Towards an overall measurement methodology of the carbon and energy footprints of the | 153 ICT sector
Chapter IV: Policy scenarios
reasonable assurance105), which provides a higher level of confidence and quality in the disclosure. Authorities or third parties can carry out external verification. The higher the verification level is, the larger the costs for companies will be. Possible penalties should be defined in case of non-compliance with the mandatory requirements. They have to be appropriately scaled to ensure that the non-compliance situation is detrimental to the company in terms of costs and reputation, compared to the uptake of the GHG emissions reporting.
4.3.2.
Specific Risk-Benefit analysis 4.3.2.1.
ECONOMIC RISK-BENEFIT ANALYSIS
The impact assessment from DEFRA (2012) considers different scenarios with mandatory reporting: for all quoted companies (option 2); for all large companies (option 3); and for all companies meeting an energy use criteria (option 4). The detailed results of this report are displayed in Table 32. Some key points of the modelling include: Although the impacts have been modelled and monetised as completely as possible for scope 1 and scope 2 emissions in the UK, in terms of geographical coverage the international impacts have not been modelled and monetised under the main benefits. These impacts may however be particularly important for the ICT sector given the international supply chains. It was not possible to quantify/monetise the impacts associated with improved stakeholder information, reputation, branding, and reduced exposure to climate change risk. Benefits are provided as a range. The range includes a high scenario with emission reductions of 4% over the appraisal period and a lower bound of zero. The impact assessment concludes that option 2 (the scope includes all quoted companies) is the preferred option: there is likely to be a significant overall benefit from mandatory reporting by quoted companies at the high end of the range, but with greater uncertainty about the overall benefits for options extending to larger number of companies.
105
In financial accounting, there are two levels of assurance: “limited assurance”, stating that nothing has come to the assurer’s attention that indicates material misstatements in the report; and “reasonable assurance”, indicating that the depth of investigation is sufficient to reduce the risk of misstatements and is phrased positively, stating that the reported data accurately reflects performance (DEFRA, 2011).
154 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Table 32: Present value summary of costs and benefits of options (adapted from DEFRA, 2012)
Electricity related
and
Option 2 (all quoted companies)
Option 3 (all large companies)
Option 4 (energy use threshold)
Gas High
11.5
851
0
Low
0
0
0
High
0.28
20.4
0
Low
0
0
0
High
950
1 630
812
Low
0
0
0
High
221
826
180
Low
0
0
0
High
741
1 675
632
0
0
0
Central
2.2
376
0
Central
26
528
145
Central
28
903
145
712
771
486
- 28
- 903
- 145
Wider GHGs Benefits (in £ Freight Transport Million) Less Abatement Costs
Total Lower Electricity and Gas Costs (in £ Freight Transport Million) Total
Net High Benefits All Robust Monetised (in £ Costs and Benefits Low Million)
For option 2, a one-off step change of around 0.15% of the behaviour change range106 would be required for the benefits to at least justify the costs (versus 2.2% behaviour change for option 3, and 0.9% for option 4). Hence a key part of the preferred option is to carry out further analysis of the actual costs and benefits experienced by those quoted companies reporting for the first time in 2013 and 2014 to provide more certainty on the translation of potential benefits into actual benefits before considering extending the policy to all large companies. Prior to this impact assessment by DEFRA, another assessment was carried out by the Department of Energy and Climate Change (DECC) for the implementation of the CRC scheme. Its results are however not presented here as it was used as a basis for the updated impact assessment, which also benefited from direct feedback from the CRC implementation. Besides to the internal costs due to the GHG emissions reporting activities, there might be external costs imposed by the policy scheme. For instance, within
106
0-4% range is assumed to estimate the lower and upper end values.
Towards an overall measurement methodology of the carbon and energy footprints of the | 155 ICT sector
Chapter IV: Policy scenarios
the CRC in the UK, CRC participants have to pay: a one-off registration fee of £950 (it includes the validation of three account representatives); a purchase of a digital certificate for each account representative, direct from a supplier, at approximately £20; and an annual subsistence fee of £1 290 each year. In the US, the impact assessment from EPA (2009) was unable to quantify the estimated benefits of the planned rule, consisting of an annual reporting scheme based on selfcertification with EPA verification, for companies meeting the threshold of 25 000 metric tons CO2 eq./year emitted in specific sectors. In terms of costs, it was estimated that 10 152 entities would be covered by the rule, directly emitting 3 827 MtCO2e per year, with 3 663 MtCO2e per year reported from upstream sources. The total annualised costs incurred under the rule by these entities would be 132 Million USD for the first year and 82 Million USD for subsequent years. Based on the literature review in PwC/CDP (2010), mandatory reporting has the following advantages: It helps deliver more credible, comparable, consistent and transparent information, when all reporting companies use the same methodology (Scenario II.c and II.b to some extent) and a fixed disclosure format that avoids selective reporting of good performance. Compliance is monitored, even though the verification scheme can vary (not necessarily external regarding the methodological points). Mandatory methodological and reporting framework avoids nondisclosure of negative performance. Legal certainty and more transparency from companies lead to cost savings as companies deal with fewer questions from stakeholders. Besides, stakeholders (and especially investors) are treated equally, having all access to the same level of information. Improved disclosures would facilitate increased incorporation of climate change risks into investment decisions and unleash the “huge potential influence over corporate emissions policies” of investors (DEFRA, 2010). It provides the first step in enabling companies to manage and reduce emissions, and provides information to the business that could save them money through reduced energy costs. If a simplification and harmonisation work is done at the EU level, it may resolve potential conflicts between multiple (national or international) reporting methodologies and schemes, and lead international discussions over a global common approach to emissions measurement and reporting. It would probably reduce
156 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
costs for GHG measurement and reporting for companies, if the EU measure supersedes all the other existing schemes. The harmonised methodology and reporting framework may also reduce the number of individual requests from stakeholders, thus reducing the burden for companies. Furthermore, it could tackle the issue of variety of different schemes that international companies have to face in different regions and countries. A key question to compare voluntary and mandatory GHG emissions reporting is: will making more firms report their emissions result in more overall benefits in the end (including GHG emissions reduction) than supporting the ones that are willing to do it on a voluntary basis? In particular, CDP is mentioned by some stakeholders as “almost mandatory” for large companies without any official regulation, because of the investor and social pressure. Some of the risks of mandatory reporting include (PwC/CDP, 2010): Mandatory reporting rules have to be appropriate for all companies, which may revert to the lowest common denominator regarding scope and innovation and result in a “tick box” mentality. It may be risky to implement a mandatory methodological framework without any testing period and practical feedback. Inappropriate reporting requirements may undermine the ability to tailor responses to stakeholder demands, by not taking into account all the differences between companies. The introduction of mandatory legislation may be premature in a field of sustainability reporting, depending on the sector targeted. The additional costs may be very important and difficult to bear for some companies, e.g. SMEs. There is additional bureaucracy associated with compliance, and additional costs for the regulators (e.g. for the development of the methodology/streamlining of the existing methodologies). There is a risk of inflexibility as a mandatory regime may be slow in keeping up with changing circumstances and technologies. This is particularly important for the ICT sector, which is growing and changing very fast. Regulation can be heavy handed when stakeholders are not demanding this information. Lack of knowledge from the regulators regarding industry situations could lead to failure in addressing company specific issues. It can represent additional constraints on efficiency and competitiveness if the scheme is not harmonised, especially for
Towards an overall measurement methodology of the carbon and energy footprints of the | 157 ICT sector
Chapter IV: Policy scenarios
companies subjected to several national or international requirements. In addition, non-reporting companies could suffer from additional costs, in order to understand the basis of the policy and assess that they are not considered within its scope (e.g. determination of the electricity consumption to compare to the thresholds).
4.3.2.2.
ENVIRONMENTAL RISK-BENEFIT ANALYSIS
In the impact assessment from DEFRA (2012), GHG emissions reductions are modelled and are the basis for the monetary assessment of the different options. Table 33 shows the total emissions of non-reporting companies in the baseline and for each option: the emissions of new reporting companies (in % of the non-reporting companies emissions, and in tCO2), and the maximum annual emissions reductions within these emissions (the low bound are always 0).
Table 33: Annual maximum estimated GHG emissions savings, for mandatory reporting policy options (adapted from DEFRA, 2012) On-site non Freight CO2 GHGs Transport
On-site Total emissions of non-reporting companies (MtCO2e)
44
4
51
% of total emissions attributed to option
0.5%
0.5%
29%
210 983
17 985
14 706 740
8 439
719
588 270
35%
35%
52%
15 572 696
1 327 509
26 330 610
622 908
53 100107
1 053 224
0%
0%
26%
Option 2 (all Emissions of new reporting quoted companies (tCO2) companies) Maximum estimated annual emission reductions (tCO2) % of total emissions attributed to option Option 3 (all Emissions of new reporting large companies (tCO2) companies) Maximum estimated annual emission reductions (tCO2) Option (energy
4 % of total emissions use attributed to option
107
This value has been changed as in the original source, it is higher than the emissions of new reporting companies. It is thought to be a reporting mistake and has been corrected to 4% (upper bound assumption, applied to all the other results) of the emissions considered.
158 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
On-site non Freight CO2 GHGs Transport
On-site threshold)
Emissions of new reporting companies (tCO2)
0
0
13 114 423
Maximum estimated annual emission reductions (tCO2)
0
0
524 577
Like for the financial benefits, option 3 leads to higher GHG emissions reductions due to the much higher number of new reporting companies (all large companies are included). It is interesting to note that the difference between the on-site GHGs values of options 2 and 3 is much more important than the difference between freight transport values.
4.3.3.
Methodology analysis
The definition of the best methodological framework shall be made by providing the most beneficial risk-benefit balance for all involved parties (policy makers, reporting companies, SDOs), i.e. maximised benefits by building upon the existing methodological basis, and minimised risks by reducing direct and indirect implementation costs and enhancing compatibility with other methodologies. The methodological analysis is not made in detail for Sub-scenario II.a as no mandatory elements are defined in this context. However, as public reporting is mandatory, requirements could be nonetheless implemented in order to make the GHG emissions reporting sufficiently transparent and avoid unclear or misleading disclosures. Some key elements to report, to increase transparency, include: the scope and system boundaries (region, nature and numbers of site considered, emissions scopes reported), time period covered (with the date), GHG covered and GWP factors used, and an assessment of the data quality (e.g. metrics such as the percentage of the emissions are covered by primary data, percentage of emissions that were extrapolated). Table 35 below presents the methodological considerations for Scenario II.b. It is assessed whether the existing methodologies and initiatives fulfil some required and optional features that the methodological framework should present under this policy scenario. These features are based on the criteria and sub-criteria defined in Chapter II and the tables from Annex B are used as inputs. The following items represent required features: Usability – Language: for implementation at the EU level, the methodology shall at least be available in English. (Table 65) Comparability – Scope: the mandatory and optional scopes shall be defined. (Table 67) Comparability – GHG covered: the GHG covered shall be clearly stated. (Table 67)
Towards an overall measurement methodology of the carbon and energy footprints of the | 159 ICT sector
Chapter IV: Policy scenarios
Comparability – GWP values: the GWP values to be used shall be clearly indicated. (Table 67) Comparability – Carbon offsets: the considerations on how to account for carbon offsets shall be defined. (Table 67) Comparability – Comparability of results: the scheme shall ensure a minimum level of comparability between the reported results of different companies. Guidance and warning could be provided in order to inform under what conditions results would be fully comparable. (Table 68) Reliability – Involvement of relevant stakeholders in development of methodology: it shall be ensured that the policy measure and associated methodological framework are built by joint efforts of all concerned stakeholders, i.e. policy makers, SDOs, and industry representatives. (Table 71) Reliability – Provision of secondary/default data: the provision of a public database is considered as highly recommended in order to facilitate the measurement, and to improve the consistency and comparability of the results. (Table 71) Reliability – Review: a third party review/verification is a beneficial feature in order to increase the reliability of the results, and consequently of the whole scheme. (Table 71) Transparency – Reporting requirements: beyond the mandatory methodological elements, the reporting format shall be harmonised and ensure a full understanding of the assumptions and calculations that have been made. (Table 73) Furthermore, the following optional features (not as essential as the required features above) were considered: Usability – User-friendliness: it is important that the supporting documents for the methodological framework are as clear, concise and pleasant as possible. (Table 65) Usability – ICT specific examples: the provision of examples contributes to the ease of use of a methodology. (Table 65) Usability – Tool(s) provided: the provision of tool(s) generally facilitates the achievement of calculation by helping the practitioner in a pre-defined method of calculation, with given inputs and parameters, and helps the comparability of results. (Table 65) Usability – Language: Additional translations into the different national languages would of course increase the usability for non-
160 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
English speakers and non-native speakers and is looked at as an optional feature. (Table 65) Comparability – Possibility to assess other indicators than GHG/energy footprint: the scheme could include other indicators than GHG/energy footprint in order to raise awareness of the other environmental stakes related to the ICT sector (e.g. resources consumption, waste generation). (Table 68) Comparability – Reduction targets: reduction targets could be recommended and encouraged by the scheme. (Table 68) Reliability – Uncertainty analysis: similarly, an uncertainty analysis increases the robustness of the results and of their possible applications. (Table 71) Applicability beyond the required scope, i.e. to other non ICTsectors (criteria not explicitly included in Task A). In Table 35, the red cells (for required features) indicate that the methodology considered would not be suitable for the item described in the context of this policy scenario. The green cells (for optional features) indicate that the methodology considered would bring additional benefits for the item described in the context of this policy scenario.
Note: The methodological elements that were previously determined as necessarily mandatory for Scenario II.b are: the system boundaries, the reporting period, the data requirements, considerations for carbon offsets, and the reporting requirements (see section 4.3.1). Table 34 describes the investigated features that are covering them in Table 35 analysis (even if this coverage is not exhaustive, e.g. for data requirements).
Table 34: Coverage of the mandatory methodological elements by the Chapter II criteria Mandatory methodological element
Criteria - Sub-criteria (from Chapter II) covering the element
System boundaries
Comparability – Scope
Reporting period
None (but all methodologies and initiatives consider an annual reporting so that this element is covered)
Data requirements
Comparability – GHG covered Comparability – GWP values
Considerations for carbon offsets
Comparability – Carbon offsets
Reporting requirements
Transparency – Reporting requirements
Towards an overall measurement methodology of the carbon and energy footprints of the | 161 ICT sector
Chapter IV: Policy scenarios
Table 35: Methodological considerations for Sub-scenario II.b108 Features based on Criteria - Sub-criteria (from 109 Chapter II)
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
ISO 14064
Bilan Carbone®
CDP
ITU-T L.1420
ADEME - ICT sectoral guidance
Required features Usability – Language: available in English
Yes
Yes
Yes
Yes
Yes
Yes
No
Comparability – Scope
Scope 3 optional
Focus on scope 3 only
Scope 3 optional
All scopes recommended, but no mandatory basis
Scope 3 optional
Scope 3 optional
Not applicable (guidance provided for all scopes)
Mandatory
Not explicitly specified, but reference to the GHG Protocol standards
Mandatory
Not explicitly specified, but reference to the Bilan Carbone®
Mandatory
Not explicitly specified, but reference to the Bilan Carbone®
Not specified
Not specified
Comparability – GHG covered
Mandatory
Mandatory
Not specified
Comparability – GWP values
Mentioned but not mandatory
Mandatory (restricted choice)
Mentioned but not mandatory
Mandatory
Not specified by CDP. This depends on the specific methodology used for accounting
Project reductions that are to be used as offsets should be quantified using a project quantification methodology (e.g. GHG Protocol Project Quantification Standard). Offsets may be
GHG offsets can be taken into account to achieve reduction targets (but reported separately)
Not specified
Offsetting mechanisms are deliberately excluded
Offsets should not be deducted from the results but can be reported separately
Comparability – Carbon offsets
108
The content of the cells is the same as in Scenario I analysis; only the “required” and “optional” characteristics of the features are changing.
109
Please refer to body text for complete explanation of the features.
162 | Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Features based on Criteria - Sub-criteria (from 109 Chapter II)
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
ISO 14064
Bilan Carbone®
CDP
ITU-T L.1420
ADEME - ICT sectoral guidance
Warning and guidance are provided in order to do comparisons over time and between two companies
The results are not comparable (the methodology is not specified)
Over time only
Not applicable
converted into credits when used to meet an externally imposed target.
Comparability – Comparability of results
Reliability – Involvement of relevant stakeholders in development of methodology: policy makers, SDOs, industry Reliability – Provision of secondary/default data
Reliability - Review
Over time only
Over time only
Specifications given for over time comparisons
Working group with industry experts, and experts from other SDOs
Working group with industry experts, and experts from other SDOs
Diverse organisations in liaison with ISO TC207/SC7 including EC, CDP, ECOS, WRI
Developed by ADEME, involvement of industry, experts, public organisations and local authorities
Developed by CDP, with support from consultants and experts
Developed by a specific working group of ITU, including various ICT industries
Developed by ADEME, involvement of industry, experts, research institutions
Via provided tools
No
No
Provision of emission factors database
No
No
Secondary data are provided and suggested
Not described
Not described
Reporting and internal documentation required
Not applicable
Not mandatory, guidance provided
Not mandatory, guidance provided
If public comments on the GHG emissions of the company are made, third party verification is required
Not mandatory
Third party verification strongly supports CDP’s strategic priority of increasing data quality and as such, is awarded highly in the scoring system. Different verification standards are mentioned.
Transparency – Reporting requirements
Detailed reporting required
Detailed reporting required
Detailed reporting required
No specific requirements
Questionnaires provided, but some gaps, e.g. data sources and individual assumptions
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector | 163
Chapter IV: Policy scenarios
Features based on Criteria - Sub-criteria (from 109 Chapter II)
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
ISO 14064
Bilan Carbone®
CDP
ITU-T L.1420
ADEME - ICT sectoral guidance
Optional features Usability – User-friendliness Usability – ICT specific examples
Usability – Tool(s) provided
Usability – Language: available in national languages
Comparability - Possibility to assess other indicators that GHG/energy footprint
Good
Good
Average
Good
Good
Good
Very good
No
No
No
No
Yes
Yes
Yes
Specific tool for semiconductors
Sample Scope 3 GHG Inventory Reporting Template is given as example
No
Yes (but only to people who attended the specific training session)
No proper tool provided, questionnaires and guidance provided
No
No proper tool provided, but secondary data for ICT sector
Available in the most spoken languages worldwide (English, Portuguese, Spanish for the EU)
No
Yes, in national adaptations of the standard
French, Spanish
Some documents are available in multiple languages
No
No
No
No
No
No
Yes, water usage
No
No
Not mentioned
Reduction targets are part of the objectives of Bilan Carbone®, guidance provided
Reduction targets are requested within “CDP Carbon Action”
Examples of reduction actions are provided
Reduction targets are encouraged
Required in questionnaires
Mandatory, in accordance with ISO 14064
Uncertainty related to data is required
Yes
No
No
Comparability – Reduction targets
Guidance provided
Reliability – Uncertainty analysis
Recommended, but not mandatory, tool provided
Recommended, but not mandatory
Recommended
Mandatory, the uncertainty related to the results must always be explicitly shown with the results
Yes
Yes
Yes
Yes
Applicable beyond the required scope: other non ICT-sectors
Guidance provided
164 | Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Two new features are now required, compared to Scenario I: the provision of secondary/default data and the need for a third party review. For the other features, the analysis developed under Scenario I is still valid. The GHG Protocol Corporate standard, the Bilan Carbone® and the ADEME ICT sectoral Guidance are the only documents to propose secondary or default data (e.g. an emission factors database to use for the Bilan Carbone®). These data would enable to improve the consistency of the GHG emissions results (across companies), as well as facilitate the data collection process for sources where primary data are not available. If the calculations are carried out thanks to the same secondary data over time, companies would be in a position to develop their own performance indicators to better manage the GHG emissions. The Bilan Carbone® also fulfils other optional features that would facilitate the assessment, such as the provision of tools, or the guidance on target reductions. It does not provide examples from the ICT sector, on the contrary to ITU-T L.1420. Concerning the implementation of a third party review, it is awarded in the CDP scoring system. Otherwise, for all methodologies studied, it is never mandatory, or sometimes even not described (except in ISO 14064 where it is required if public comments on the GHG emissions of the company are made). In the context of Scenario II.b, it could be necessary to implement a third party review, whatever the company and the reporting. As a result, additional work compared to the existing methodologies should be made regarding this feature, possible based on the CDP considerations. For Sub-scenario II.c, the analysis can be based on the analysis for Sub-scenario II.b (the analysis table is not reproduced). The only changes in the items to analyse are that: Usability – Tool(s) provided becomes a required feature as it would simplify the calculation and reporting harmonisation, and would be the most cost efficient way to define a full calculation methodology; Reliability – Uncertainty analysis also becomes a required feature to increase transparency, and comparability across companies (if the uncertainty results enable it). As stated above, Bilan Carbone® provides a full tool (for persons who follow a specific training, who are the only ones certified to use it, which ensures the quality of the results) and is the only methodology to do so. The GHG Protocol Corporate Standard provides some specific tools, including one for semiconductors, but they do not frame the whole GHG emissions accounting process (it would probably need to be complemented). Regarding the uncertainty analysis, it is not mandatory in the GHG Protocol standards and ISO 14 064. Bilan Carbone®, ITU-T L.1420 and the CDP all ensure the display of uncertainties of the results to some extent.
4.3.4.
Stakeholders’ opinions
As explained in the Scenario I feedback, several stakeholders support the implementation of a mandatory reporting. One person explained that in practice, many large companies already report their emissions but mandatory reporting would enable to progressively push (while supporting) the reporting for smaller companies (changing company size threshold). According to another interview, it may however be difficult to implement for SMEs because of the additional overheads and the current economic context.
Towards an overall measurement methodology of the carbon and energy footprints of the | 165 ICT sector
Chapter IV: Policy scenarios
All stakeholders interviewed agreed that Sub-scenario II.a does not provide any comparability across companies. However, preferences for sub-scenarios vary as some believe that no comparability is adequate (because it is difficult to compare companies when they are not performing the exact same activities) while others think some comparability should be provided (this split is relatively balanced). The latter support rather Sub-scenarios II.b and II.c. Still, all the persons supporting Sub-scenario II.a explain that full transparency of the accounting and assumptions made is key under such a mandatory scheme. Concerning the reporting requirements of Sub-scenario II.a, reporting guidelines should reflect international best practices, with convenient disclosure requirements. One stakeholder estimates the GHG Protocol to represent a good basis for such a scenario. Benefits mentioned for Sub-scenario II.a include: A higher freedom in the methodology would facilitate the implementation, along with requirements for transparency. Risks include: Companies may choose methodologies that best suit their desired results. Consumers will need to be made aware that results are not comparable, or incorrect conclusions may be drawn regarding their environmental performance. Regarding the other environmental impacts, one stakeholder explained that it is not expected that other environmental impacts will be negatively affected by GHG emissions reporting and reduction because appropriate regulation already exist on another range of topics. GHG mandatory reporting could result in a first template/process that could be later adapted to other things (e.g. water). It would be a useful way of testing the process. The stakeholders who support comparability of the results agree that Sub-scenarios II.b and/or II.c are the most logical and suitable scenarios (or would be acceptable) if the methodological framework is properly defined. One interviewee claims that the additional efforts for some companies already reporting according to other methodologies would be acceptable in some cases, to improve the reliability of the results. Another one estimates that it is not so controversial for companies to agree on a methodology. Finally, one person gives the example of financial accounting where it has been possible to define mandatory reporting elements across companies. Regarding the methodological requirements, two stakeholders mentioned that scope 1-2 reporting is not difficult (even for small companies) because operations are relatively simple, but that scope 3 reporting may be difficult to implement. Partial scope 3 may be considered, with more specific definitions, e.g. only for larger companies with the proper priority. Another person explains that an evolution from basics to more stringent schemes is possible, but it should be progressive, providing additional guidance on reporting aspects in a progressive manner with more time and feedback to allow the policy and reporting schemes to adapt to the ICT sector’s needs. Other specific benefits mentioned by stakeholders include:
166 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
More companies reporting because of the mandatory status results in a raised awareness amongst the employees of reporting companies. For Sub-scenarios II.b and II.c, some “greenwashing” could be avoided thanks to the mandatory methodological framework. It creates a level playing field for all market players. They also provide legal certainty regarding reporting requirements. Some of the risks mentioned include: For Sub-scenarios II.b and II.c, different countries have already implemented different schemes with mandatory methodologies (e.g. France, UK) and companies have invested already. Imposing another mandatory methodology would be an additional burden for them. This is also mentioned for companies implementing a voluntary scheme that could be different from the mandatory methodology. Methodological elements must be well-defined to ensure that companies calculate and report results in a comparable manner. One person argued that a mandatory methodology does not give flexibility in how a company can perform their measurement and assessment, which is a critical issue with the ICT sector due to the high complexity of ICT products and the rapidly changing technologies. Flexibility in techniques and data collection is essential in the ICT sector One stakeholder supports the use of the GHG Protocol standards and the CDP as a basis, as much as possible, for the mandatory methodology. It would be an important mistake to develop a brand new one.
4.4.
Scenario III
Mandatory public reporting, mandatory methodology, with binding targets
4.4.1.
Generic considerations 4.4.1.1.
BASIS AND COVERAGE OF THE POLICY MEASURE
Scenario III considers the implementation of a mandatory public reporting leading to target setting for emissions reduction. Compared to Scenario II, the target setting represents an important change, as it will force companies to adopt the full GHG management cycle (see Figure 16). Besides the uptake of GHG emissions reporting by all companies within the scope of the measure, this scenario guarantees a certain level of overall GHG emissions reduction related to the scope defined compared to a BaU scenario. In other words, not only would additional companies be forced to set targets and manage their GHG emissions compared to Scenario II, but the target setting step would ensure an
Towards an overall measurement methodology of the carbon and energy footprints of the | 167 ICT sector
Chapter IV: Policy scenarios
appropriate level of ambition. Table 36 presents the objectives of Scenario III, by type of stakeholder. Many are similar to Scenario II, but additional ones appear in bold in the table, due to the binding targets.
Table 36: Objectives of Scenario III, by stakeholder Targeted stakeholders
Objectives -
Companies -
Investors
-
Supply Chain
-
Society/Environment
168 |
-
To guarantee a minimum level of uptake of GHG emissions reporting To force businesses to understand and reduce their GHG emissions To provide relevant comparative information about GHG emissions of companies, thanks to a harmonised base for communication To reach a standardisation of company footprints To establish a harmonised base for procurement and incentives provided by the EU and MS To set ambitious reduction targets for company GHG emissions To improve investors knowledge about GHG emissions of companies and industry sectors To establish a harmonised base for communication on company GHG emissions To inform investors about best performing companies in terms of GHG emissions management To drive investors towards low carbon companies and discourage investments in environmentally irresponsible companies To raise awareness and encourage partners in the supply chain to report and decrease their GHG emissions, even if not within the scope of the mandatory reporting To encourage suppliers to reduce their GHG emissions by including environmental criteria in the procurement processes To establish a harmonised base to communication on company GHG emissions and improve (environmental) communication in the supply chain To reduce GHG emissions of economic activities for a more sustainable production thanks to the binding targets In the long term, to reduce other environmental impacts of economic activities
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Emissions targets can be defined in many different ways: at the overall level, e.g. with a system of allowances being progressively reduced; at the sector or sub-sector level; at the company level, with either absolute or relative targets and financial penalties when these are not respected. Whatever the economic tool associated to the targets, the applied principle always remains the same: GHG emissions are monetised so that their reduction becomes a beneficial situation compared to a situation where targets are not achieved. However, in practice, the definition of the reduction targets are expected to be very complicated in order to be as fair as possible for all involved companies. For example, large companies are expected to be able to achieve more important reductions than SMEs; there are also important variations of the emissions profiles by sector and sub-sector or by country so that this procedure is expected to represent one of the main issues of Scenario III. Because the target setting will increase substantially the pressure over businesses, the level of acceptability of this scenario is lower than for the other ones. In particular, implementing this scenario at a sector level (ICT sector in this case, but the argument is valid for any other sector) does not ensure that emissions will be reduced in the most costeffective manner across all economic activities, if no solid rationale is previously established for dealing only with the targeted sector. Such measure would be very exposed to the criticism of the considered sector. That is why it seems necessary to implement such measure across all economic sectors, or on specific priority sectors, provided a thorough preliminary study identify them. Like for the other scenarios, to avoid additional burden for policy makers and companies, the scheme should be aligned and consistent with the other existing schemes at the EU or national levels. However, for the other scenarios, it was recommended to avoid covering companies and sectors already subjected to a mandatory reporting. In Scenario III which covers the whole process from measurement to emissions reduction, harmonisation should be achieved, rather than simply complementing and aligning with other schemes: if the scheme is implemented at the EU level, targets will need to be the same to have a level playing field. Given that MS already have their own targets, the national schemes cannot be ignored, to define the EU scheme, and national initiatives will have to be merged into the EU one for the sake of clarity and simplicity. This harmonisation work would be more difficult than for other scenarios given that some schemes are also setting reduction targets on GHG emissions.
4.4.1.2.
ABILITY TO MEET POLICY NEEDS
Scenario III is the scenario that enables to directly target one of the final objectives of GHG emissions reporting: GHG emissions reduction. It consequently constitutes the best scenario to meet long term policy needs and should lead to the largest emissions reductions, provided its implementation does no results in unexpected effects. For instance, the way in which targets would be set has a very important role to play in the actual emissions reduction that would be done. Some phenomenon, like the rebound
Towards an overall measurement methodology of the carbon and energy footprints of the | 169 ICT sector
Chapter IV: Policy scenarios
effect110, should be taken into consideration during the design phase of the measure to minimise risks. Like in Scenario II, the drivers for company reporting and emissions reduction would be regulation compliance for the GHG emissions reporting but cost and innovation drivers would also play important roles in the emissions reduction stage, as companies would be responsible for choosing and implementing their internal reduction measures. To guarantee the relevancy of target setting, the measurement and reporting of GHG emissions require the definition of a full mandatory methodology, with very limited freedom for the methodology practitioner. Otherwise, companies would naturally adopt the methodological choices leading to the most beneficial GHG emissions figures for them. Such situation would not be compatible with clear emissions targets wanted by the policy maker. The full methodology will also ensure comparability and similar quality of the GHG emissions reported by companies, so that they may be properly used by stakeholders. Finally, GHG emissions targets and actual emissions reduction should be publicly disclosed on the same platform as the one supporting the GHG emissions reporting. Building on an existing and recognised reporting platform should be considered in order to reduce costs.
4.4.1.3.
SPECIFIC CONSIDERATIONS RELATED TO THE ICT
SECTOR Like in Sub-scenario II.c, the full methodology is defined and mandatory so that comparability is guaranteed under Scenario III. In practice, the full compliance with the methodology may be difficult to achieve for companies for practical reasons, but this will depend on the level of requirement of the methodology. Additionally, many practical considerations would need to be discussed for the definition of the targets. These binding targets and their consequences may be of different forms: an emissions allowance system may be considered as a target, especially if the number of allowances if progressively reduced (overall or at the company level); reduction targets could also be set directly at the company level (e.g. absolute or relative targets); also, these targets may result in either financial incentives, or penalties, or even both depending on the performance of each company. However, ensuring consistency in the definitions of targets across companies of the ICT sector seems challenging. Absolute targets would need to be defined at the company level and such process would be very resource intensive. Furthermore, no company has exactly the same activities in the ICT sector so that relative targets (i.e. carbon intensity indicators) may not be entirely comparable, even at a low level. Thus, even targets set at the sub-sector level may result in a certain market distortion.
110
The rebound effect can be defined as an increase in consumption due to environmental efficiency interventions that can occur through a price reduction (i.e. an efficient product being cheaper and hence more is consumed) or other behavioural responses.
170 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Finally, settings targets also raises the question of cost efficiency of emissions reduction. It may be premature to implement Scenario III only for the ICT sector, without having analysed the possible reductions across all sectors.
4.4.1.4.
LINKS WITH EXISTING/PLANNED MEASURES
The main existing schemes today which sets binding targets on GHG emissions are the EU Emissions Trading System (EU ETS) and the UK CRC, which have been previously presented under Scenario II. Several regions and states of the US have also developed mandatory programs for GHG reporting, e.g. the Regional Greenhouse Gas Initiative (in member states in the Mid-Atlantic and Northeast) and the Western Climate Initiative (in a group of Western States and Canadian provinces), which are two cap-and-trade programs. Under the EU ETS, the binding targets are set thanks to a “cap-and-trade” approach. They are therefore defined at the overall level depending on the number of allowances awarded for the facilities considered within the scheme. The scheme was launched in 2005 and the number of allowances is progressively reduced over time in order to ensure an emissions reduction. The ICT sector is currently not included within the EU ETS: it covers direct (i.e. scope 1) CO2 emissions from installations such as power stations, combustion plants, oil refineries and iron and steel works, as well as factories making cement, glass, lime, bricks, ceramics, pulp, paper and board. These emissions account for about 40% of the GHG emissions in the EU and new industry sectors and gases will progressively be included in the scheme (aviation in 2012, petrochemicals, ammonia and aluminium industries in 2013). Under the UK CRC, allowances also have to be purchased by companies. The scheme applies a financial benefit or cost saving for reducing carbon emissions and imposes potential costs or regulatory fines on companies that do not make the required energy savings or emissions reductions. The money raised through the purchase of emissions credits and required allowances is awarded back to participants, according to their position in the annual performance league table. The alignment of Scenario III measure with existing schemes would be necessary. It is not realistic to set in parallel two different targets for two figures calculated according to two different methodologies. In fact, the scheme could represent an extension of the ETS, both in terms of sectoral coverage (inclusion of the ICT sector) and emissions scopes reported (scopes 1, 2 and potentially 3). Harmonisation with the existing national schemes may be more difficult: if targets are less ambitious than at the MS level, resources would be wasted by implementing the EU regulation on top of the national regulation in these MS; if targets are more ambitious, the EU regulation would bypass the national one, which this time would waste resources at the national levels. It may be possible to develop a tool or reporting platform, allowing the extraction or reporting according to different regulations with binding targets (e.g. EU ETS, UK CRC) based on one single process. However, the most efficient option would consist of merging all existing schemes at the national or EU levels into one single and harmonised scheme, but this would represent an important amount of complex work.
Towards an overall measurement methodology of the carbon and energy footprints of the | 171 ICT sector
Chapter IV: Policy scenarios
4.4.1.5.
REQUIRED EC AND MS RESOURCES FOR
IMPLEMENTATION Given the mandatory property of the measure, a Directive or a Regulation would be required to enforce Scenario III. In the case of a Directive, more resources may be needed at the MS level for the implementation but the opportunity for national adaptations may support the compatibility with existing national regulations. Scenario III would be the most complex scenario to set up and enforce, and thus the most demanding in terms of absolute resources. Nonetheless, the resource efficiency should be assessed by also investigating the effective emissions reduction achieved, which are expected as the most important under this scenario too, but such estimation is not feasible at this stage. Compared to Scenario II, additional resources would be needed for the development of the full mandatory methodology, the enforcement of a quality verification process, the definition of the targets, and the application of the penalties/awards.
4.4.1.6.
DESCRIPTION OF DIFFERENT POSSIBLE
ALTERNATIVES Some practical considerations could lead to various alternatives. These include: The definitions of thresholds in the scope: mandatory reporting and targets would be more easily accepted by large companies, at least as a first step. The timeline of the policy implementation: depending on the sectoral and company type coverage, the implementation may be done in several steps, if the full methodologies are not developed at the same time for SMEs and large companies for instance. The frequency of reporting: for feasibility reasons, the period between two reporting should be within one year and a couple years, meeting a compromise between resources needed and efficiency to reduce emissions. The information provided in the mandatory reporting may be of different nature but should include at least the items to check the compliance with the targets set and in particular, the emissions reductions achieved. Compared to Scenario II, the binding targets would require the implementation of more a robust verification process. External verification would be highly recommended to ensure confidence and quality of the reporting, as there are financial stakes due to the binding targets. Possible penalties should be defined in case of non-compliance with the mandatory requirements of the reporting. They have to be appropriately scaled to ensure that the non-compliance situation is detrimental to the company in terms of costs and
172 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
reputation, compared to the uptake of the GHG emissions reporting. Different penalties threshold could be defined depending on the level of non-compliance (reporting non done, reporting not properly done, emissions reductions not achieved, etc.). There are different options to set targets: absolute reduction targets (in kg eq. CO2 or % reduction in the target year compared to a baseline year), intensity targets based on a decrease in emissions intensity using a normalising factor (e.g. GHG emissions per tonne of product, per floor space or per Full Time Equivalent in the target year compared to a baseline year), or even both at the same time. Table 37 presents a short overview of the pros and cons of absolute and intensity targets while Table 38 presents their popularity amongst companies reporting within the CDP. Table 37: Advantages and disadvantages of different targets types (source: DEFRA, 2009a)
Advantages
Absolute targets
Intensity targets
- Designed to achieve a reduction in a specified quantity of GHGs emitted to the atmosphere.
- Reflects GHG performance improvements independent of organic growth or decline.
- Environmentally robust as it entails a commitment to reduce GHG emissions by a specified amount.
- Target base year recalculations for structural changes are usually not required.
- Transparently addresses potential stakeholder concerns about the need to manage absolute emissions. - Target base year recalculations for significant structural changes to the organisation will be necessary. These add complexity to tracking progress over time. Disadvantages
- Does not allow comparisons of GHG intensity/efficiency. - May be difficult to achieve if the company grows unexpectedly or growth is linked to GHG emissions.
- May increase the comparability of GHG performance amongst companies.
- No guarantee that GHG emissions will be reduced – absolute emissions may rise even if intensity goes down and output increases. - Companies with diverse operations may find it difficult to define a single common business metric. - If a monetary variable is used for the business metric, such a € million of sales, it must be recalculated for changes in product prices and product mix, as well as inflation, adding complexity to the process.
Towards an overall measurement methodology of the carbon and energy footprints of the | 173 ICT sector
Chapter IV: Policy scenarios
Table 38: Shares of CDP reporting companies with targets in the ICT sector (source: adapted from CDP, 2011a111) Absolute and intensity targets
Absolute targets
Intensity targets
No targets
Information technology
20%
29%
26%
26%
Telecommunications
19%
29%
33%
19%
Sector
4.4.2.
Specific Risk-Benefit analysis 4.4.2.1.
ECONOMIC RISK-BENEFIT ANALYSIS
The risks-benefits of mandatory reporting, reported under section 4.3 for Scenario II, are also valid for Scenario III. Besides these risk-benefit, some are proper to the implementation of binding targets, but no quantitative information or modelling of these have been found in the existing impact assessments and literature. Costs of this scenario would be important both for companies and regulators. In particular, the harmonisation of existing schemes into the mandatory reporting with binding targets scheme is expected to be complicated and costly in the first place. However, in the long run, the simplification of the legislation about GHG emissions into one single scheme may lead to a better cost-efficacy to reduce GHG emissions. The additional costs to companies will be very dependent upon the required implementation or modifications to the measurement and reporting approaches, the potential implementation actions to meet binding targets, as well as the financial penalties/incentives defined. In a second step, the achievement of the reduction targets will bring direct monetary savings to the companies. The development of the regulation would require significant resources within the EU and national authorities, especially for the methodology development and targets definition. To minimise these costs, working groups involving all types of stakeholders (SDOs, industry, regulator) should be set up to build on the existing, as much as possible. The level of acceptability of Scenario III, without any progressive step (Scenario I and/or Scenario II previously implemented), is likely to be relatively low for companies within its scope and represents an important risk. Many companies may be afraid of such a breakthrough in GHG emissions policy, especially if those not already implementing and not familiar with GHG emissions reporting. The wide difference in levels of knowledge could result in an unfair market situation in the short term. On the other hand, the accuracy of the regulation would lead to quality and reliable data being disclosed, and ensure a minimum level of GHG emissions reduction. Despite
111
Percentages from a limited number of respondents: 35 for the Information technology sector and 21 for the Telecommunications sector.
174 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
important costs, the harmonisation and simplification of all existing schemes into one single policy measure would increase clarity and understanding from stakeholders, and reduce the costs due to multiple standards development. This may constitute a very important factor to raise awareness of companies, and the public opinion in general. Additionally, the definition of appropriate targets and penalties would enable a fair distribution of the benefits of GHG emission reduction, across the different sectors, subsectors and companies (large versus SMEs) considered. The existence of a full methodology would make the process simpler for companies than if they were to report voluntary on their own (appropriate guidance and tools).
4.4.2.2.
ENVIRONMENTAL RISK-BENEFIT ANALYSIS
Scenario III represents the scenario with the most important assurance of GHG emissions reduction overall. Including full scope 3 in the mandatory reporting and binding targets does however not seem feasible at this time of writing of the report given the remaining challenges related to scope 3. If successful, the scheme would represent a solid basis for extension to other environmental impacts. However, in its implementation, burden shifting from GHG emissions to other environmental impacts may occur, because the binding targets will be mandatory (or incentivised/penalised) and only based on GHG emissions. It will depend on the level of ambition of the targets (the higher the targets, the higher the risk of burden shifting), but companies may be “forced” to take measures, knowing they will be detrimental to some other aspects, just to respect the regulation.
4.4.3.
Methodology analysis
Table 39 below presents the methodological considerations for Scenario III. It is assessed whether the existing methodologies and initiatives fulfil some required and optional features that the methodology should present under this policy scenario. These features are based on the criteria and sub-criteria defined in Chapter II and the tables from Annex B are used as inputs. The following items represent required features: Usability – Language: for implementation at the EU level, the methodology shall at least be available in English. (Table 65) Usability – Tool(s) provided: the provision of tool(s) generally facilitates the achievement of calculation by helping the practitioner in a pre-defined method of calculation, with given inputs and parameters, and helps the comparability of results. In the context of a full mandatory methodology, the provision of a tool is essential to make the calculations feasible and entirely consistent across companies, by the provision of default values in particular. (Table 65)
Towards an overall measurement methodology of the carbon and energy footprints of the | 175 ICT sector
Chapter IV: Policy scenarios
Comparability – Scope: the mandatory and optional scopes shall be defined. (Table 67) Comparability – GHG covered: the GHG covered shall be clearly stated. (Table 67) Comparability – GWP values: the GWP values to be used shall be clearly indicated. (Table 67) Comparability – Carbon offsets: the considerations on how to account for carbon offsets shall be defined. (Table 67) Comparability – Comparability of results: the scheme shall ensure a high level of comparability between the reported results of different companies. (Table 68) Comparability – Reduction targets: as binding targets are part of Scenario III, guidance on reduction targets shall be included in the methodology. (Table 68) Reliability – Review: a third party review/verification is needed in order to guarantee the reliability of the results, and consequently of the whole scheme. (Table 71) Reliability – Uncertainty analysis: similarly, an uncertainty analysis provides transparency about the level of confidence in the results. (Table 71) Reliability – Involvement of relevant stakeholders in development of methodology: it shall be ensured that the policy measure and associated methodological framework are built by joint efforts of all concerned stakeholders, i.e. policy makers, SDOs, and industry representatives. (Table 71) Reliability – Provision of secondary/default data: the provision of a public database is considered as highly recommended in order to facilitate the measurement, and to improve the consistency and comparability of the results. (Table 71) Transparency – Reporting requirements: the reporting format shall be harmonised. (Table 73) Furthermore, the following optional features (not as essential as the required features above) were considered: Usability – User-friendliness: it is important that the supporting documents for the methodological framework are as clear, concise and pleasant as possible. (Table 65) Usability – ICT specific examples: the provision of examples contributes to the ease of use of a methodology. (Table 65)
176 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Usability – Language: Additional translations into the different national languages would of course increase the usability for nonEnglish speakers and non-native speakers. (Table 65) Comparability – Possibility to assess other indicators than GHG/energy footprint: the scheme could include other indicators than GHG/energy footprint in order to raise awareness of the other environmental stakes related to the ICT sector (e.g. resources consumption, waste generation). (Table 68) Applicability beyond the required scope, i.e. to other non ICTsectors (criteria not explicitly included in Task A). In Table 39, the red cells (for required features) indicate that the methodology considered would not be suitable for the item described in the context of this policy scenario. The green cells (for optional features) indicate that the methodology considered would bring additional benefits for the item described in the context of this policy scenario. Compared to the Sub-scenario II.c analysis, one new item becomes required, while it was only optional: Comparability – Reduction targets. Therefore, the rest of the analysis developed for Scenario II.c is also valid for Scenario III. Except in ISO 14064 where reduction targets are not even mentioned, all methodologies stand at a similar level: they provide guidance or recommend setting emissions targets but this is never more detailed. Consequently, the definition of the rules to define the binding targets, which has been previously defined as a challenging task, should be defined within the policy schemes in any case. Even if the only difference between Scenario II.c and Scenario III, setting these binding targets represents an important methodological challenge, as it would require the definition and agreement on relevant performance indicators for different types of ICT companies.
Towards an overall measurement methodology of the carbon and energy footprints of the | 177 ICT sector
Chapter IV: Policy scenarios
Table 39: Methodological considerations for Sub-scenario III112 Features based on Criteria - Sub-criteria (from 113 Chapter II)
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
ISO 14064
Bilan Carbone®
CDP
ITU-T L.1420
ADEME - ICT sectoral guidance
Yes
No
Required features Usability – Language: available in English
Yes
Yes
Yes
Yes
Yes
Usability – Tool(s) provided
Specific tool for semiconductors
Sample Scope 3 GHG Inventory Reporting Template is given as example
No
Yes (but only to people who attended the specific training session)
No proper tool provided, questionnaires and guidance provided
No
No proper tool provided, but secondary data for ICT sector
Comparability – Scope
Scope 3 optional
Focus on scope 3 only
Scope 3 optional
All scopes recommended, but no mandatory basis
Scope 3 optional
Scope 3 optional
Not applicable (guidance provided for all scopes)
Mandatory
Not explicitly specified, but reference to the GHG Protocol standards
Mandatory
Not explicitly specified, but reference to the Bilan Carbone®
Mandatory
Not explicitly specified, but reference to the Bilan Carbone®
Not specified
Not specified
Comparability – GHG covered
Mandatory
Mandatory
Not specified
Comparability – GWP values
Mentioned but not mandatory
Mandatory (restricted choice)
Mentioned but not mandatory
Mandatory
Not specified by CDP. This depends on the specific methodology used for accounting
Project reductions that are to be used as offsets should be quantified using a project quantification methodology (e.g. GHG Protocol Project Quantification Standard).
GHG offsets can be taken into account to achieve reduction targets (but reported separately)
Not specified
Offsetting mechanisms are deliberately excluded
Offsets should not be deducted from the results but can be reported separately
Comparability – Carbon offsets
112
The content of the cells is the same as in Scenarios I and II analysis; only the “required” and “optional” characteristics of the features are changing.
113
Please refer to body text for complete explanation of the features.
178 | Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Features based on Criteria - Sub-criteria (from 113 Chapter II)
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
ISO 14064
Bilan Carbone®
CDP
ITU-T L.1420
ADEME - ICT sectoral guidance
Specifications given for over time comparisons
Warning and guidance are provided in order to do comparisons over time and between two companies
The results are not comparable (the methodology is not specified)
Over time only
Not applicable
Not mentioned
Reduction targets are part of the objectives of Bilan Carbone®, guidance provided
Reduction targets are requested within “CDP Carbon Action”
Examples of reduction actions are provided
Reduction targets are encouraged
Not described
Not described
Offsets may be converted into credits when used to meet an externally imposed target.
Comparability – Comparability of results
Comparability – Reduction targets
Reliability - Review
Reliability – Uncertainty analysis
Reliability – Involvement of
Over time only
Guidance provided
Not mandatory, guidance provided
Over time only
Guidance provided
Not mandatory, guidance provided
Third party verification strongly supports CDP’s strategic priority of increasing data quality and as such, is awarded highly in the scoring system.
If public comments on the GHG emissions of the company are made, third party verification is required.
Not mandatory
Required in questionnaires
Mandatory, in accordance with ISO 14064
Uncertainty related to data is required
Developed by CDP, with
Developed by a
Developed by ADEME,
Different verification standards are mentioned.
Recommended, but not mandatory, tool provided
Recommended, but not mandatory
Recommended
Mandatory, the uncertainty related to the results must always be explicitly shown with the results
Working group with industry
Working group with
Diverse
Developed by
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector | 179
Chapter IV: Policy scenarios
Features based on Criteria - Sub-criteria (from 113 Chapter II) relevant stakeholders in development of methodology: policy makers, SDOs, industry
Reliability – Provision of secondary/default data
Transparency – Reporting requirements
GHG Protocol Corporate Standard
GHG Protocol Scope 3 Standard
experts, and experts from other SDOs
Via provided tools
Detailed reporting required
ADEME - ICT sectoral guidance
ISO 14064
Bilan Carbone®
CDP
ITU-T L.1420
industry experts, and experts from other SDOs
organisations in liaison with ISO TC207/SC7 including EC, CDP, ECOS, WRI
ADEME, involvement of industry, experts, public organisations and local authorities
support from consultants and experts
specific working group of ITU, including various ICT industries
No
No
Provision of emission factors database
No
No
Secondary data are provided and suggested
No specific requirements
Questionnaires provided, but some gaps, e.g. data sources and individual assumptions
Reporting and internal documentation required
Not applicable
Detailed reporting required
Detailed reporting required
involvement of industry, experts, research institutions
Optional features Usability – User-friendliness
Good
Good
Average
Good
Good
Good
Very good
Usability – ICT specific examples
No
No
No
No
Yes
Yes
Yes
Usability – Language: available in national languages
Available in the most spoken languages worldwide (English, Portuguese, Spanish for the EU)
No
Yes, in national adaptations of the standard
French, Spanish
Some documents are available in multiple languages
No
No
Comparability - Possibility to assess other indicators that GHG/energy footprint
No
No
No
No
Yes, water usage
No
No
Applicable beyond the required scope: other non ICT-sectors
Yes
Yes
Yes
Yes
Yes
No
No
180 | Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
4.4.4.
Stakeholders’ opinions
Only one stakeholder believes that Scenario III would be fine, but only provided that the economy enables companies to deal with the targets. All the others mention several important risks and barriers, which are described below: The interaction and fear of inconsistency between different existing schemes: how would an EU scheme fit/overlap with the existing schemes in Member States? The difficulty to set relevant targets, from a practical point of view: What indicator to set targets would be relevant (carbon productivity)? Could the targets be defined by sub-sectors? Would it make sense given the broad and dynamic range of ICT companies’ activities? How would the differences between the national electricity generation mixes be taken into account? Categorisation of firms and/or products will likely be required, as binding targets will likely be set at a firm or a product level. This raises many issues, including issues of product utility, product durability, product category, product geography (e.g. sales), and others. If the scheme is ICT specific, it would not be cost effective to set targets just for this sector (versus all the other ones), without having made a preliminary assessment which requires all sectors to report as much as possible. If limited to scopes 1 & 2 reporting, there is a risk of carbon leakage outside of the region of implementation. Methodological elements must be well-defined to ensure that companies calculate and report results in a comparable manner. The general feeling is therefore that it might be possible to have such a scheme in the future, but it is not feasible in one single step, and could not be implemented currently as such because there are too many remaining barriers and uncertainties.
4.5.
Questions for an impact assessment
Based on the generic costs/benefits analysis (see Chapter III) and the discussions on the scenario analysis, several key issues would need to be addressed in more details if an impact assessment on a mandatory EU scheme for measurement and reporting of the GHG emissions of the ICT sector was conducted. They are listed below: More quantitative estimations of the risks and benefits for ICT companies should be obtained, e.g. through a wide survey. The resources needed for GHG emissions measurement and reporting depend upon several parameters, including the type and size of the company, the scope and boundaries of the reporting, and the verification scheme implemented. The estimations of the
Towards an overall measurement methodology of the carbon and energy footprints of the | 181 ICT sector
Chapter IV: Policy scenarios
costs should ideally be made specifically for different policy options, defining each of these parameters (e.g. company with over 500 employees, scope 1 & 2 reporting, no verification). This would enable to find the most suitable practical considerations. Amongst these parameters, the reporting scope is critical, especially the question: should scope 3 emissions be reported (fully, partially or not at all)? The impact assessment should also assess the potential environmental benefits of GHG emissions reporting, by making a wide survey amongst the ICT sector companies. Average emissions reduction could be assumed from feedback from already reporting companies, by sub-sectors, so that a more reliable estimate of GHG emissions savings for the whole ICT sector could be calculated. Impact of burden shifting towards other environmental impacts should also be assessed, in case a mandatory GHG reporting regulation is put in place. The objectives of the mandatory reporting policy can be different depending on the willingness of the policy maker, and this has an influence on the need of a methodological framework. Several policy options could be discussed to take into account the differences between one policy without any associated methodology (i.e. not targeting comparability across companies) and one policy defining a mandatory methodological framework. Concerning the latter, the nature of the methodology would also have an influence on the measurement and reporting process, and therefore on the risks and benefits. If the methodology proposed is already existing or partly defined, the impact assessment should also be made by taking into consideration the details of the methodology. The stakeholders’ feedback obtained within this study seems to indicate that as far as company reporting is concerned, the ICT sector is not so different from other services activities (e.g. bank, insurance). The impact assessment should answer the question: does the policy option need to be specifically implemented for the ICT sector and should specificities be introduced by ICT sub-sector? Will making more companies report their emissions through a mandatory scheme result in more overall benefits in the end (including GHG emissions reduction) than supporting the ones that are willing to do it on a voluntary basis? Other important effects, like the rebound effect, should be studied: if intensity targets are set, they will not ensure an actual reduction of the overall emissions. The impacts should be investigated for all involved stakeholders, in particular the regulator (EC, national authorities), companies, and other relevant stakeholders. Indeed, the difference between two alternative policy options may consist of a benefit/burden shift between two types of stakeholders that is why it is important to consider all points of view.
182 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter IV: Policy scenarios
Practical considerations for implementation such as company thresholds, timeline, frequency of reporting, verification schemes, means of communication and penalties/incentives are important. To adequately define these, several policy options covering a range of alternatives for these elements should be studied. In particular, the impact of a mandatory GHG reporting on SMEs is expected to be very different from the one on large companies. Impacts outside the geographical coverage of the policy should be investigated as much as possible, e.g. possible relocation of activities due to the regulatory constraint, or carbon leakage if scope 3 reporting is not required. Interactions with existing EU and national GHG emissions policies should be thoroughly studied to aim at a simplified and harmonised GHG emissions policy.
Towards an overall measurement methodology of the carbon and energy footprints of the | 183 ICT sector
Chapter V: Conclusions
Chapter V: Conclusions The following subsections present the main conclusions from the three different parts of the study: the analysis of existing methodologies and initiatives for accounting and reporting of GHG emissions; the risk-benefit analysis; and the policy scenarios discussions. In a potential perspective of EU policy implementation on GHG and energy footprint for the ICT sector, these conclusions are combined in order to draw an overall conclusion on the relevance and opportunities of the existing measurement and reporting methodologies and initiatives.
Existing methodologies and initiatives for accounting and reporting of GHG emissions Methodologies and initiatives for the measurement of GHG emissions and energy footprint were analysed on the basis of different criteria. It can be concluded that the basic methodological approach is very similar for the analysed methodologies. Minor differences lie within the level of detail for certain aspects, such as reporting requirements or reviews. The methodologies can be used for (and by) the whole ICT sector, except the ones with the highest level of detail (e.g. GHG Protocol Product standard - ICT sector guidance) that are intended for a more specific target within the ICT sector. The following main conclusions are drawn from the analysis for GHG emissions accounting and reporting at the company level: More specific methodologies are not required for scope 1 and 2 emissions114. For these emissions, the assessment of an ICT company is not very different from other industry sectors. The existing generic methodologies and initiatives are commonly used by ICT companies to measure and report their scope 1 and 2 emissions. Therefore, further ICT specific methodologies do not seem necessary for these emissions. Accounting of scope 3 emissions115 is more difficult and requires a much more significant effort by companies. Indeed, the assessment of the use phase of sold products, and the assessment of the complete supply chain are very complex for the ICT sector, and generally require many assumptions and extrapolation for reporting all scope 3 emissions. These emissions can represent a significant share of the overall emissions of a company. In this context, most of the methodologies are not detailed enough for scope 3 emissions assessment (e.g. ISO 14064-1 only roughly states possible scope 3 categories in
114
Scope 1: Direct GHG emissions; Scope 2: Indirect GHG emissions from the consumption of purchased electricity, heat, and steam. 115
184 |
Scope 3: Other indirect GHG emissions.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter V: Conclusions
annex). The GHG Protocol Scope 3 Standard is a good basis but it does not cover ICT-specific features. ITU-T L.1420 lists relevant scope 3 emission categories, but gives no further guidance on their assessment. ADEME116 ICT sector guidance is much more detailed on this topic and is a first attempt to list available secondary data for the ICT sector, but no actual feedback on its implementation was found as it is relatively recent. Results of scope 1 and 2 emissions enable a better comparability of the GHG emissions than when scope 3 emissions are also included. Variability of assumptions about the complete supply chain and emissions caused by products after they are sold make the results not suitable for a comparative analysis between different companies, no matter which methodology has been followed. The methodologies are therefore suitable to assess the absolute GHG emissions of a company, but there is no suitable baseline and relevant performance indicators to compare the performance across the whole ICT sector (e.g. considering the number of products/business volume is not suitable to compare ICT companies having different activities). Nevertheless, comparisons over time can be based on these methodologies and, when scope 3 emissions are included in the assessment, effects of in- and outsourcing can be seen. Most company-oriented methodologies do not require a critical review to verify the reliability of the results. Nevertheless, it is usually recommended and the CDP initiative supports it by awarding extra points in the case of verification. The following main conclusions are drawn from the analysis for GHG emissions accounting and reporting at the product level: The existing methodologies and initiatives have a life-cycle approach (except Energy Star which focuses on the use phase). The impact of the different life-cycle phases can be assessed and the methodologies can thereby be used to identify the most important aspects in the product life-cycle (hotspot analysis), in order to reduce the environmental impacts efficiently. Most of the analysed methodologies and initiatives cover specifically the indicator of climate change (i.e. global warming potential). LCA methodologies consider other environmental impacts as well (e.g. ISO 14040/44, ETSI TS 103 199, ITU-T L. 1410, MEErP117). Most methodologies are based on the principles of ISO 14040/44. ISO 14040/14044 is the most widely used methodology for LCA and carbon and energy footprints of products. Some more recent carbon footprint
116
French Environment and Energy Management Agency
117
Methodology for the Ecodesign of Energy-related Products
Towards an overall measurement methodology of the carbon and energy footprints of the | 185 ICT sector
Chapter V: Conclusions
methodologies such as PAS 2050 and the GHG Protocol Product Standard are more detailed but remain based on the principles defined by ISO 14040/14044. All product-oriented methodologies require an internal or external review. ISO 14040/14044 even requires a review panel with members of different organisations for comparative public studies. The level of detail provided by the methodologies differs greatly in terms of how specific they are to the ICT sector or even to ICT product categories. The ICT-specific methodologies and additional guidance increase the usability by pointing out ICT-relevant aspects (life-cycle phases, important components or manufacturing phases). They provide more specific requirements or at least additional guidance. For instance, ETSI TS 103 199 clearly defines the life-cycle phases to be covered, the type of data to be used, the reporting format of results, etc. Generic methodologies and initiatives such as ISO 14040/14044 give a lot more freedom of choice in conducting the assessment which leads to less comparability between different studies (even if selection of system boundaries and cut-off criteria is not arbitrary but should be justified). ICTspecific methodologies are in most cases helpful and should be preferred to generic ones when assessing ICT products, or used as complements. When carried out within the context of a given study, comparative analyses are possible under certain conditions (including the use of the same functional unit and equivalent methodological considerations for the two objects compared), but comparisons across different studies or the rating of a product performance in accordance to their carbon footprint are not yet possible due to large uncertainties. The requirements from ICT-specific methodologies are still not detailed enough to impose all possible methodological choices and aspects of an analysis (e.g. use patterns for different product groups, ICT-specific allocation rules, system boundaries, data quality) to enable comparisons across different studies. Existing labels, such as Energy Star and EPEAT, are more suitable for direct comparisons between models118 and communication of product performances because their criteria are more specific and enable a simple and reliable evaluation of the product according to a harmonised methodology. However, the scope of these labels is different as they are not designed for the assessment of life-cycle emissions. Methodologies which include secondary data, such as PAIA and the Ecoimpact Evaluator, could be helpful to conduct an assessment when no primary data are available. However, as there is no detailed description of these tools, their actual usability could not be evaluated. Including more detailed and restrictive guidance (at a product group level) in methodologies themselves does not seem useful and feasible, as this would lead either to a
118
186 |
Even if limited, depending on the definition of the award categories by the label.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter V: Conclusions
large number of different methodologies (i.e. one for each product group) or very long documents. At this point, it thus makes more sense that the methodologies refer to Product Category Rules (PCRs), complementary to a basis methodology, and which could be made mandatory to use. Although this would result in a very large number of PCRs, the basis methodology would remain the same, and not need an update each time a PCR is added or revised. PCRs establish a series of specific rules for individual product groups, without specifying the general methodology for the GHG emissions and energy footprint assessment. The rules in each PCR are specifically developed for individual product categories and therefore take the specific technical parameters/aspects into account. The following main conclusions are drawn from the analysis of ICT-specific PCRs: They improve the comparability of results and support practitioners when conducting an analysis; For an effective use of these PCRs, they should be centrally published and harmonised to avoid duplication; If PCRs are developed which are valid worldwide, they could include regional specifications where needed; and At the moment, many parts of the ICT sector are not addressed by valid PCRs. For the implementation of a carbon/energy footprint policy, further PCRs would have to be developed and regularly updated. The use of PCRs is recommended by several methodologies (e.g. PAS 2050 and IEC TR 62725) but never required. In particular, IEC TR 62725 states that this technical reference can be used to develop PCRs for electrical and electronic products and systems. However, as PCRs are expected to be more detailed than the methodologies, the methodologies themselves can only represent a baseline. Instead, findings of the standardisation process and expertise of the involved stakeholders should be used to develop proper PCRs.
Risk-Benefit analysis The lack of resources is the main barrier for GHG emissions measurement and reporting. Costs due to these activities, both in terms of time and money invested, are clearly visible. This factor explains why large companies are implementing GHG emissions measurement and reporting more often than smaller companies. In particular, the interviewed stakeholders who report their emissions were all large companies with important resources. There is however a very wide variation in financial risks identified in existing studies: a direct and simple comparison between the financial figures across sources is not always possible because of the different scopes of the analyses, but several factors of variation are clearly identified, such as the size and type of company or the scope and boundaries of the reporting. The fact that large companies are reporting their emissions more often may thus result in an overestimated impression of the actual costs of GHG emissions measurement and reporting. The overview of the available information in the literature indicates that the costs for GHG emissions measurement and reporting are
Towards an overall measurement methodology of the carbon and energy footprints of the | 187 ICT sector
Chapter V: Conclusions
not expected to be above 50 000 € for most companies, and may represent less than 5 000 € for very small companies. Other important risks and barriers identified include: The lack of comparability between different sectors and business operations in terms of applicable boundaries, which may lead to unfair comparisons between reported quantitative outcomes; The wide range of existing GHG measurement and reporting methodologies, which increases the confusion for people who are unfamiliar with them; and The complexity of reporting scope 3 emissions, which may discourage measurement and reporting initiatives. These barriers are clearly related to the methodological framework to use when measuring and reporting the GHG emissions, which stresses the importance of improving or simplifying it to foster the implementation of a measurement and reporting strategy by as many companies as possible. Estimates of the benefits of GHG reporting are much sparser than costs estimates in the literature, and this phenomenon was confirmed by the stakeholders’ interviews. Therefore, no consolidated estimate of potential financial gains due to the implementation of a measurement and reporting strategy could be determined. This may be explained by the fact that most of the companies already measuring and reporting their GHG emissions feel concerned by the climate change challenge and are convinced that they should implement a suitable approach to tackle it. Therefore, they do not necessarily seek to ensure a financial benefit in the end (nor in the short term), but know the initiative is valuable for the brand and the society, and results in many non-tangible benefits. These major qualitative benefits include: Brand building and improving public reputation (by far the most important benefit in the literature and for stakeholders); Increased transparency and better communication with stakeholders, in particular with the supply chain and investors, which are more and more interested in such reporting to quantify climate risk; Increased employee engagement and awareness of GHG emissions impacts; and An opportunity to set targets for reduction, to monitor progress, and to reduce the environmental impact of the company. Given the lack of quantitative estimations of the benefits, no objective conclusion can be drawn on whether GHG emissions reporting represents a net cost or a net benefit for a company. Costs being very dependent upon the size and structure of the company (amongst other factors), and non tangible benefits being highly linked to the brand image and activities of the company, there is no doubt that the overall risk-benefit balance is unique to each reporting company, having its own ethics and priorities.
188 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Chapter V: Conclusions
Policy scenarios As a reminder, Table 40 summarises the three different scenarios that are discussed in this report. Table 40: Definition of policy scenarios Scenario
Methodological requirements
Reporting requirements
BAU
None
Voluntary
I
Some
Voluntary
II.a
None
Mandatory
II.b
Some
Mandatory
II.c
Full
Mandatory
III
Full
Mandatory with binding targets
The preferences of the stakeholders interviewed are equally split between Scenario I (voluntary reporting with some mandatory methodological elements) and Scenario II (mandatory public reporting), while Scenario III (mandatory public reporting with binding targets) is estimated to currently represents too many risks for companies, besides the practical obstacles for its implementation (e.g. how to define relevant GHG emissions targets). Some stakeholders support the fact that GHG emissions reporting should enable comparisons across companies: these logically support Scenarios defining a mandatory methodological framework, i.e. Scenarios I, II.b (partial mandatory methodology) or Scenario II.c (full mandatory methodology). To ensure a minimum level of comparability required, the methodological elements that should be mandatory in Scenarios I and II.b are: the system boundaries (and cut-off criteria), the reporting period and frequency, the data requirements, the considerations regarding carbon offsets, and the reporting requirements (content and verification procedure). When a full methodology is to be defined (Scenarios II.c and III), the most realistic approach would consist of developing a complete tool, with associated databases, to ensure the consistency and comparability of results. Comparability is not only dependent upon the methodology followed, but also on the inputs data available and used (e.g. emission factors). Other stakeholders believe that GHG emissions reporting should only enable each company to manage and improve its carbon footprint on its own: these mainly support Scenarios I and II.a. The level of both risks and benefits is progressively increasing from Scenario I to Scenario III. Concerning risks, requirements become more stringent and costs are more significant for companies as well as authorities. Concerning benefits, more stringent policies ensure a higher level of GHG emissions reduction: a mandatory reporting scheme is expected to increase the number of companies voluntary implementing emissions reduction actions (based on the mandatory reporting); a mandatory reporting scheme with binding targets directly ensures a certain level of emissions reduction.
Towards an overall measurement methodology of the carbon and energy footprints of the | 189 ICT sector
Chapter V: Conclusions
The existing methodologies and initiatives provide a good basis to build upon and define more specific requirements when needed, whatever the scenario. The interviewed stakeholders also support the conclusion that it would not be beneficial to develop a fully new methodology while there are already some of them widely accepted and used. For instance, other important methodological considerations that were not discussed in detail in the scenario analysis include how to account for renewable energy, and the assessment of other environmental impacts. The analysis of the existing methodologies showed that these issues are not always addressed or properly addressed, while they can make important differences in the outcomes of GHG emissions calculations, and above all may lead to inadequate strategies if not properly understood. The scenarios analysis is to be considered as preliminary considerations. The outcomes of future possible policy schemes are very dependent upon practical details and these need to be defined based on a thorough impact assessment (e.g. definition of size or emissions thresholds, need for an ICT specific policy or not, interactions with other existing policies), for which key questions have been identified.
Overall conclusion Based on the methodological analysis made in this study, it is concluded that the methodologies developed by ISO, the GHG Protocol, PAS, ADEME/AFNOR, ETSI and ITU-T are suitable to enforce GHG emissions accounting. If regulations were to be developed, one or several of the methodologies could be chosen to be used within the associated policy framework. The common basis and similarities between many of the analysed methodologies indeed result in the opportunity to choose or accept several existing methodologies within the policy framework. In this case, some methodological aspects would require harmonisation for a consistent application of the policy measure, e.g. consistent documentation, mandatory reviews or the compulsory use of PCRs (for product assessment). In the case of the implementation of a mandatory reporting scheme, the number of companies voluntarily implementing emissions reduction actions (based on the mandatory reporting) is expected to increase, leading to higher environmental benefits.
190 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
References
References Austrian Institute for SME research (2007), CSR and Competitiveness - European SMEs’ Good Practice, Consolidated European Report, for DG ENTR. Carbon Trust (2004), Brand value at risk from climate change. Available at: www.carbontrust.com/media/84960/ct-2004-10-brand-value-at-risk-from-climatechange.pdf CDP (2010), Information Technology sector report – Covering Global 500, S&P 500 and FTSE 350 respondents. CDP (2011a), CDP Global 500 Report 2011 - Accelerating Low Carbon Growth. CDP (2011b), Information Technology sector report – Covering Global 500, S&P 500 and FTSE 350 respondents. CDP (2011c) Telecommunications sector report Covering Global 500, S&P 500 and FTSE 350 respondents. CDP (2012), CDP supply chain report, A New Era: Supplier Management in the Low-Carbon Economy. CDSB (2011), Financial institutions taking greenhouse gases into account. By Matthew Haigh and Matthew A. Shapiro, for DEFRA. DECC (2010), Final Impact Assessment on the Order to implement the CRC Energy Efficiency Scheme. Available at: www.decc.gov.uk/assets/decc/1_20100120102757_e_@@_crcconsia.pdf DEFRA (2009a), Guidance on how to measure and report your greenhouse gas emissions. DEFRA (2009b), Impact Assessment of guidance on measurement and reporting on greenhouse gas emissions. Available at: www.legislation.gov.uk/ukia/2009/239/pdfs/ukia_20090239.pdf DEFRA (2010), The contribution that reporting of greenhouse gas emissions makes to the UK meeting its climate change objectives - A review of the current evidence. DEFRA (2011), Measuring and reporting of greenhouse gas emissions by UK companies: a consultation on options. DEFRA (2012), Final Impact Assessment of Options for Company GHG Reporting. Available at: www.defra.gov.uk/consult/files/20120620-ghg-consult-final-ia.pdf Doane D. (2002),“Market failure the case for mandatory social and environmental reporting”, New Economics Foundation. EEA (2009), Application of the Emissions Trading Directive by EU Member States reporting year 2008, European Environmental Agency Technical report No 13/2008. Available at: www.eea.europa.eu/publications/technical_report_2008_13
Towards an overall measurement methodology of the carbon and energy footprints of the | 191 ICT sector
References
EPA (2009), Regulatory Impact Analysis for the Mandatory Reporting of Greenhouse Gas Emissions Final Rule (GHG Reporting) – Final Report ERM (2010), Company GHG Emissions Reporting – a Study on Methods and Initiatives (ENV.G.2/ETU/2009/0073), Revised Final Report, prepared for DG ENV. Ethical Corporation Institute (2008), Corporate GHG Emissions Reporting 2008 – Summary. EY (2010), Product Carbon Footprinting – a study on methodologies and initiatives, Final Report for DG ENV. ICAEW (2009), Managing greenhouse gas emissions – Research report. IEMA (2010), Special Report – GHG Management and Reporting, www.iema.net/ghgreport KERP Research Electronics & Environment (2006), Marek Stachura, Andreas Schiffleitner: Eco-PC – Eco Design Report, Vienna. KMU Forschung Austria (2007), CSR and Competitiveness European SMEs’ Good Practice Consolidated European Report, for DG ENTR. MEDDTL (2012), Méthode pour la réalisation des bilans d’émissions de Gaz à effet de serre, Version 2. Available at: www.developpement-durable.gouv.fr/IMG/pdf/120420_Art75_Methodologie_generale_version_2.pdf OECD (2009), Guide to measuring the information society, Annex 1B: OECD definitions of the information economy sectors. OECD (2010), Transition to a low-carbon economy: public goals and corporate practices. Available at: www.oecd.org/dataoecd/40/52/45513642.pdf Griesshammer & Hochfeld (2009), Öko-Institut e.V., German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), and German Federal Environment Agency (UBA). Product Carbon Footprint – Memorandum, Position statement on measurement and communication of the product carbon footprint for international standardisation and harmonisation purposes. PwC/CDP (2010), Review of the contribution of reporting to GHG emission reductions and associated costs and benefits. For DEFRA. UK Environment Agency (2011), Environmental Disclosures. The third major review of environmental reporting in the statutory annual reports and annual accounts of the FTSE all-share companies. ZVEI (2011), Bericht zur Selbstverpflichtung der Halbleiterhersteller mit Produktionsstätten in der Bundesrepublik Deutschland zur Reduzierung der Emissionen bestimmter fluorierter Gase. Available at: www.zvei.org/Publikationen/Abschlussbericht%20zur%20Selbstverpflichtung%20der%20 Halbleiterhersteller.pdf (in German)
192 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
References
Methodologies and Initiatives GHG Protocol Corporate Accounting and Reporting Standard, GHG Protocol Initiative, Revised Edition (March 2004), Available at: www.ghgprotocol.org/files/ghgp/public/ghgprotocol-revised.pdf GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, GHG Protocol Initiative, September 2011, Available at: www.ghgprotocol.org/files/ghgp/public/Corporate%20Value%20Chain%20%28Scope3%2 9_EReader.pdf ISO 14064 Greenhouse gases – Part 1: Specification with guidance at the organisation level for quantification and reporting of greenhouse gas emissions and removals, International Organisation for Standardisation, ISO 14064-1:2006. Available at: www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=38381 Bilan Carbone®, Association Bilan Carbone (ABC), v7 (April 2012), Available at: www.associationbilancarbone.fr/le-bilan-carbone%C2%AE/V7 Carbon Disclosure Project, Available at: https://www.cdproject.net/enUS/Pages/guidance.aspx Recommendation ITU-T L.1420: Methodology for energy consumption and greenhouse gas emissions impact assessment of information and communication technologies in organisations, International Telecommunication Union, Telecommunication Standardisation Sector (ITU-T), Available at: www.itu.int/rec/T-REC-L.1420-201202-I/en ADEME: Assessing GHG emissions - Guidance for the ICT sector, ADEME and CIGREF, January 2012, Available at: www.ademe.fr/internet/Flash/BILAN_GES_TNIC/index.html GHG Protocol Product Life Cycle Accounting and Reporting Standard, GHG Protocol Initiative, September 2011, Available at: www.ghgprotocol.org/standards/productstandard PAS 2050:2011 Specification for the assessment of the life cycle greenhouse gas emissions of goods and services, DEFRA, DECC, and BIS, Revised version: September 2011, Available at: www.bsigroup.com/Standards-and-Publications/How-we-can-help-you/ProfessionalStandards-Service/PAS-2050 ISO 14040/44: Environmental management – Life cycle assessment, International Organisation for Standardisation, ISO 14040: Second edition: 2006-07-01, ISO 14044: First edition: 2006-07-01. Available at: www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=37456 ISO/DIS 14067: Carbon footprint of products – Requirements and guidelines for quantification and communication, International Organisation for Standardisation, Draft (Status: 2012-01-18). Available at: www.iso.org/iso/catalogue_detail?csnumber=59521 BP X30-323: General principles for an environmental communication on mass market products, AFNOR and ADEME, June 2011. Available at: www.boutique.afnor.org/norme/bp-x30-323-0/principes-generaux-pour-l-affichage-
Towards an overall measurement methodology of the carbon and energy footprints of the | 193 ICT sector
References
environnemental-des-produits-de-grande-consommation-partie-0-principes-generaux-etcadre/article/740401/fa170405 MEErP 2011 – Methodology for Ecodesign of Energy-related Products, COWI Belgium sprl, Van Holsteijn en Kemna B.V. (VHK) prepared for the EC, DG ENTR, 2011. Available at: www.meerp.eu/ GHG Protocol Product Life Cycle Accounting and Reporting Standard ICT Sector Guidance: Chapter 3: Guide for assessing GHG emissions of Desktop Managed Services (DMS), GHG Protocol Initiative, Draft v0.8 - 10/03/2012. Available at: www.ghgprotocol.org/files/ghgp/Chapter_3_GHGP-ICT%20DMS%20guide%20v08%2010Mar2012.pdf GHG Protocol Product Life Cycle Accounting and Reporting Standard ICT Sector Guidance: Chapter 2: Guide for assessing GHG emissions Telecommunications Network Services (TNS), GHG Protocol Initiative, Draft v1.5 - 10/03/2012. Available at: www.ghgprotocol.org/files/ghgp/Chapter_2_GHGP-ICT%20TNSguide%20v15%2010MAR2012.pdf TC 111/WG 4 – project IEC TR 62725 Ed.1 Quantification methodology of greenhouse gas emissions (CO2e) for electrical and electronic products and systems, International Electrotechnical Commissions, Draft (Ed.1, distributed 07 March 2012). Available at: www.iec.ch/dyn/www/f?p=103:52:0::::FSP_ORG_ID,FSP_DOC_ID,FSP_DOC_PIECE_ID:131 4,143949,272991 ETSI TS 103 199 V1.1.1 (2011-11), Environmental Engineering (EE); Life Cycle Assessment (LCA) of ICT equipment, networks and services; General methodology and common requirements, ETSI, ETSI TS 103 199 V 1.1.1 (2011-11). Available at: www.etsi.org/deliver/etsi_ts/103100_103199/103199/01.01.01_60/ts_103199v010101p.pdf ITU-T Rec L.1410 “Methodology for environmental impact assessment of information and communication technologies (ICT) goods, networks and services”, International Telecommunication Union, Telecommunication Standardisation Sector (ITU-T), Draft version (confidential). Product Attribute to Impact Algorithm (PAIA), Massachusetts Institute of Technology, Carnegie Mellon University, University of California at Berkeley, Arizona State University. Available at: www.eu-energystar.org/fr/index.html iNEMI: Eco-Impact Evaluator for ICT Equipment, iNEMI International Electronics Manufacturing Initiative. Available at: www.inemi.org/project-page/eco-impact-evaluatorict-equipment-phase-2-lca-estimator-tool-development EPEAT® (Electronic Product Environmental Assessment Tool), US EPA. Available at: www.epeat.net/ EU Energy Star, European Commission and US EPA. Available at: www.euenergystar.org/fr/index.html
194 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
Annex A. General description fiches of initiatives and methodologies Table 41 to Table 62 are the individual fiches for each initiative and methodology which is analysed within this study. These fiches provide the general description of these initiatives and methodologies.
A.1. Generic organisation-oriented methodologies and initiatives Table 41: GHG Protocol Corporate Standard GHG Protocol Corporate Standard Name of Initiative/ Methodology
GHG Protocol Corporate Accounting and Reporting Standard
Version/Link
Revised Edition (March 2004) www.ghgprotocol.org
History and Status
First version published in September 2001, revised version in March 2004 Publicly available and used
Initiative or Methodology
Methodology
Developed by
Greenhouse Gas Protocol Initiative, which was launched by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) The Greenhouse Gas Protocol Initiative is a multi-stakeholder partnership of businesses, NGOs, governments, and others convened by the WRI, a U.S.-based environmental NGO, and the WBCSD, a Geneva-based coalition of 170 international companies. Launched in 1998, the Initiative’s mission is to develop internationally accepted GHG emissions accounting and reporting standards for business and to promote their broad adoption.
Involved companies/ parties
Feedback from following companies was used for development of a revised edition (ICT-related companies): Eastman Kodak Co. Sony Corporation STMicroelectronics
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 (optional)
Product environmental assessment Life cycle approach Use phase
Towards an overall measurement methodology of the carbon and energy footprints of the | 195 ICT sector
Annexes
GHG Protocol Corporate Standard GWP GHG covered: CO2, CH4, N2O, HFCs, PFCs, SF6 (Kyoto Protocol) GHG emissions not covered by the Kyoto Protocol, e.g. CFCs, NOx, etc. shall not be included in scope 1 but may be reported separately
Energy Other environmental impacts
Direct CO2 emissions from the combustion of biomass shall not be included in scope 1 but reported separately. Field of application
ICT-specific
not ICT-specific
Primarily for companies, but it applies equally to other types of organisations, e.g. NGOs, government agencies, and universities This standard focuses only on the accounting and reporting of emissions. It does not require emissions information to be reported to WRI or WBCSD Designed for comparison of a given company over time, not for comparison between different companies Utilisation and Dissemination
Generic features
196 |
Road Tester (ICT related): IBM Corporation The following ICT related companies have already used this methodology : Dell Corporation, USA Eastman Kodak, USA IBM, USA Sony Electronics, Japan Sun Microsystems Offsets can be taken into account, but have to be reported separately Review (internal or external) is not mandatory Standard documentation includes guidance and examples (no example for an ICT company) A list of GWP characterisation factors (100 year time horizon) according to IPCC (2009 and 1995 values) is given A list of third party databases is given To complement the methodology and guidance provided, a number of cross-sector and sector-specific calculation tools are available (use of the tools is optional): Cross-sector tools that can be applied to different sectors: these include stationary combustion, mobile combustion, HFC use in refrigeration and air-conditioning, and measurement and uncertainty estimation. Sector-specific tools that are designed to calculate emissions in specific sectors such as aluminium, iron and steel, cement, oil and gas, pulp and paper, office-based organisations. Regarding ICT related companies a tool for semiconductors exists.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
GHG Protocol Corporate Standard ICT-specific features
Interaction with other methodologies
Sector-specific tools for semiconductors (spreadsheet file) exist. For different sectors possible scope 1, 2 and 3 emission sources are listed. For the ICT sector, emissions sources of semiconductor production are mentioned as listed below: For scope 1: Process emissions (C2F6, CH4, CHF3, SF6, NF3, C3F8, C4F8, N2O used in wafer fabrication, CF4 created from C2F6 and C3F8 processing) Stationary combustion (oxidation of volatile organic waste, production of electricity, heat or steam) Fugitive emissions (process gas storage leaks, container remainders/heel leakage) Mobile combustion (transportation of raw materials/products/waste) For scope 2: Stationary combustion (consumption of purchased electricity, heat or steam) For scope 3: Stationary combustion (production of imported materials, waste combustion, upstream T&D losses of purchased electricity) Process emissions (production of purchased materials, outsourced disposal of returned process gases and container remainder/heel) Mobile combustion (transportation of raw materials/products/ waste, employee business travel, employee commuting) Fugitive emissions (landfill CH4 and CO2 emissions, downstream process gas container remainder/heel leakage) The cross-sector and sector-specific tools offered by the GHG Protocol Initiative are consistent with those proposed by the Intergovernmental Panel on Climate Change (IPCC) for compilation of emissions at the national level The standard is linked to other standards by the GHG Protocol Initiative, such as GHG Protocol Scope 3 Standard (see Table 42) or "The GHG Protocol for Project Accounting"119. In general, all GHG Protocol standards and guidelines can be used together. There are several common guidance documents and tools available.
119
The Greenhouse Gas Protocol: “The GHG Protocol for Project Accounting”, November 2005, online: www.ghgprotocol.org/files/ghgp/ghg_project_protocol.pdf
Towards an overall measurement methodology of the carbon and energy footprints of the | 197 ICT sector
Annexes
Table 42: GHG Protocol Scope 3 Standard GHG Protocol Scope 3 Standard Name of Initiative/ Methodology
GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard
Version/Link
September 2011 www.ghgprotocol.org
History and Status
First draft: November 2009, final version: September 2011 Stakeholder process over a three year period: 2 300 participants from 55 countries were involved 96 members participated in technical working groups to draft the standard 34 companies from various industries road tested the standard in 2010 The GHG Protocol Scope 3 Standard and GHG Protocol Product Standard were developed simultaneously. Publicly available and used
Initiative or Methodology
Methodology – Supplement to the GHG Protocol Corporate Accounting and Reporting Standard
Developed by
GHG Protocol Initiative (see GHG Protocol Corporate Standard Table 41)
Involved companies/ parties
ICT-related members of the Technical Working Group: Cisco Systems Google HP IBM Intel Nokia SAP
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 GWP GHG covered:CO2, CH4, N2O, HFCs, PFCs, SF6 (Kyoto Protocol) Reporting can be given as aggregated CO2-equivalents The reporting of segregated values and emissions of additional GHG is optional
Product environmental assessment Life cycle approach Use phase Energy Other environmental impacts
Reporting period: one year Biogenic CO2 emissions shall not be included in the scopes, but shall be included and separately reported in the public report. Field of application
ICT-specific
not ICT-specific
Not sector-specific: targets all economic sectors, public and private organisations and institutions. Standard should enable comparison over time, but not comparison between companies. Can be used for stakeholder information, identification of hotspots and target setting.
198 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
GHG Protocol Scope 3 Standard Utilisation and Dissemination
Road Tester (ICT related): Acer Inc. SAP AG IBM Corporation
Generic features
GWP characterisation factors: Companies should use GWP values provided by the IPCC based on a 100-year time horizon. Companies may either use the IPCC GWP values agreed to by United Nations Framework Convention on Climate Change (UNFCCC) or the most recent GWP values published by the IPCC. The most recent values are preferred, but for consistency with older assessments, the 1995 values can also be used. Companies should use consistent GWP values across their scope 1, scope 2, and scope 3 inventory GHG offsets are not taken into account Detailed description of which emissions belong to scope 1, 2 or 3 as well as examples (not from ICT-related companies) are given in the standard documentation Review (internal or external) is not required, but recommended Specific Scope 3 guidelines: Supplier Engagement Guidance Guidance for Calculating Scope 3 Emissions - Draft version August 2011 Sample Scope 3 GHG Inventory Reporting Template is given (only as example, other formats can be used)
ICT-specific features Interaction with other methodologies
None This standard is a supplement to the GHG Protocol Corporate Standard and should be used together with it. In general, the GHG Protocol standards and guidelines can be used together. For available tools and additional information not specific to the Scope 3 Standard, see Table 41 Members of the ISO TC207 U.S. Technical Advisory Group and the ISO/ DIS 14067 Working Group Convener were in the Steering Committee of the GHG Protocol Scope 3 Standard Members of the Carbon Disclosure Project were in the Technical Working Group
Towards an overall measurement methodology of the carbon and energy footprints of the | 199 ICT sector
Annexes
Table 43: ISO 14064-1 ISO 14064-1 Name of Initiative/ Methodology
ISO 14064-1 Greenhouse gases – Part 1: Specification with guidance at the organisation level for quantification and reporting of greenhouse gas emissions and removals
Version/Link
ISO 14064-1:2006 www.iso.org
History and Status
Publicly available and used (first edition)
Initiative or Methodology
Methodology
Developed by
International Organisation for Standardisation ISO, TC 207/SC 7 Greenhouse gas management and related activities
Involved companies/ parties
Organisations in liaison with ISO TC207/SC7: ANEC, CDP, EC, ECOS, EuropaBio, GEDNet, GEN, GHG, IAF, IAI, ICLEI, IDF, IISRP, INLAC, SETAC, UNFCCC, WRI
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 (optional)
Field of application
Product environmental assessment Life cycle approach Use phase
GWP It is not specified which GHG should be covered and which GWP should be used (but a selection of IPCC (2007) values, 100-year reference are given in annex)
Energy Other environmental impacts
ICT-specific
not ICT-specific
Possible applications: Monitoring and reporting of GHG inventories and projects Comparisons over time Utilisation and Dissemination Generic features
200 |
If public comments on the GHG emissions of the company are made, third party verification is required Public reporting is recommended, but not mandatory (if public reporting is carried out, a specific list regarding reporting requirements is provided) ISO 14064 is GHG programme neutral. If a GHG programme is applicable, requirements of the programme are additional; if requirements are conflicting, the GHG programme requirements take precedence No characterisation models, which should/could be used, are named in the standard For comparisons over time, a baseline year has to be defined Uncertainty analysis should be performed Separate documentation of: Direct emission of each GHG Removal of GHG Energy-related indirect GHG emissions Other indirect GHG emissions
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
ISO 14064-1 ICT-specific features Interaction with other methodologies
Direct CO2 emission from incineration of biogenic material
None Regarding uncertainties, "Guide to the Expression of Uncertainty in Measurement (GUM). BIPM, IEC, IFCC, ISO, IUPAC, IUPAP, OIML,1993" is recommended ISO 14064 incorporates many key concepts and requirements stated by the GHG Protocol Corporate Standard ISO 14064 and GHG Protocol Corporate Standards were used to develop the Carbon Trust Standard (UK)
Towards an overall measurement methodology of the carbon and energy footprints of the | 201 ICT sector
Annexes
Table 44: Bilan Carbone® Bilan Carbone® Name of Initiative/ Methodology
Bilan Carbone®
Version/Link
Last version: v7 (April 2012) Previous version: v6.1 (June 2010) www.associationbilancarbone.fr
History and Status
The Bilan Carbone® methodology was first published in 2004 by the ADEME (The French Agency for the Environment and Energy Management) and is currently in use. Since October 2011, governance and rights of the Bilan Carbone® have been transferred to a new entity called the "Association Bilan Carbone" (ABC). Future developments: Bilan Carbone® is evolving. The new version (v7) includes several modifications and improvements (ergonomics of the tool, new French regulatory framework). The new emission factors database of the ADEME called the "Base Carbone®" is embedded in version 7. Version 7 is also in line with the requirements of the French Grenelle legislation (Article 75) for mandatory GHG reporting.
Initiative or Methodology
Methodology including: Methodology guide Several emission factor guides Calculation spreadsheets
Developed by
ADEME, the French Agency for the Environment and Energy Management
Involved companies/ parties
The ADEME is no longer in charge of the Bilan Carbone® but remains a key stakeholder since it has developed a new tool, the "Base Carbone®" database, which will provide the emission factors to be used in the Bilan Carbone®. Members of ABC are organised in several "collèges". Collège "Conseil & Recherche" Association des Professionnels en Conseil Carbone - APCC Centre Interprofessionnel Technique d'Etude de la Pollution Atmosphérique - CITEPA Météo France Collège "Organismes Publics et Citoyens" La Caisse des Dépôts et Consignations – CDC Avenir Climatique Collège "Entreprises" Groupe GDF Suez Énergie France EDF Fédération des Services Energie Environnement - FEDENE Groupe Saint Gobain Groupe BPCE La Poste Ordre des Experts Comptables REUNIR association Groupe Vinci Veolia Environnement Collège "Collectivités Locales" Agence Parisienne du Climat Réseau des Agences Régionales de l'Energie et de l'Environnement – RARE
202 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
Bilan Carbone® Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 GWP
Product environmental assessment Life cycle approach Use phase
Energy Other environmental impacts
GHG accounting at the organisation level with three scopes : "Internal" scope "Intermediate" scope "Global" approach (recommended) Some aspects are accounted for separately: "Carbon sink" for construction timber coming from sustainablymanaged forests Avoided emissions related to the recovery of materials or energy from processing waste Deliberately excluded sources: Offsetting mechanisms Direct CO2 emissions from the combustion of biomass CO2 released by burying organic Field of application
ICT-specific
not ICT-specific
The methodological principles were initially drawn up for the Bilan Carbone®’s use in industrialised countries. Most of the emissions factors previously included in Bilan Carbone® spreadsheets (now they are available in the Base Carbone®) are mostly applicable to France (metropole and overseas territories) that is why so far, the methodology has been essentially used in France. However, some Bilans Carbone have been performed abroad. ABC claims to have international ambitions for this methodology. Bilan Carbone® can be used for GHG accounting of activities in all types of organisations depending on the module of the Bilan Carbone® (i.e. Entreprises – Collectivités -Territoires, in English respectively: Companies Local authorities - Regional organisations) ABC underlines that the version 7 of the Bilan Carbone® can be used in the context of the French Grenelle legislation (Article 75), which requires a GHG emissions reporting for organisation fulfilling given conditions. Utilisation and Dissemination
The company which is performing the Bilan Carbone® (i.e. the company itself or a contractor) needs to have certified people who have taken part in training sessions formerly organised by the ADEME and now organised by the "Institut de Formation Carbone". ABC indicates that more than 6 000 Bilans Carbone have been performed to date. It is the most known and recognised methodology in France for GHG reporting. ICT sector: Alcatel, Bull, Prosodie, Netgem, etc. Non-exhaustive list of organisations that have performed a Bilan Carbone® available at: www.associationbilancarbone.fr/sites/default/files/bilans_carbone_realises _17_11_2011.pdf
Generic features
The Bilan Carbone® enables users to evaluate, by scale, the GHG emissions resulting from all the necessary physical processes required for the existence of a human activity or organisation.
Towards an overall measurement methodology of the carbon and energy footprints of the | 203 ICT sector
Annexes
Bilan Carbone® One of the methodology’s fundamental goal concerns providing the same platform for: GHG emissions which occur directly within the entity; and Emissions which occur outside the entity, but which are related to processes necessary for the existence of the activity or the organisation. Therefore, the emissions that are included in a GHG emissions assessment are not only those that the entity either is or feels responsible for, but are above all those that it is dependent on. ICT-specific features Interaction with other methodologies
204 |
None The Bilan Carbone® proposes an approach that is compatible with both ISO 14064 and the GHG Protocol standards, and will integrate changes that may be dictated by the standards updates. The sectoral guide for ICT of the ADEME explicitly refers to the Bilan Carbone® methodology. Version 7 embarks the new emission factors database of the ADEME called the "Base Carbone®". The Base Carbone® comes from the work initiated with the Bilan Carbone®.
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
Table 45: Carbon Disclosure Project Carbon Disclosure Project Name of Initiative/ Methodology
Carbon Disclosure Project (CDP)
Version/Link
www.cdproject.net
History and Status
Non-profit organisation started in 2000 CDP Carbon Action is now in its second year and is backed by a growing group of pension funds, asset managers, insurers and banks. CDP supply chain since 2007 The 2012 disclosure cycle is the first year that the ICT sector module has been introduced Publicly available and used
Initiative or Methodology
Reporting initiative
Involved companies/ parties
Microsoft and SAP are "Global Technology Partners"
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 (optional) GWP
Product environmental assessment Life cycle approach Use phase Cradle-to-gate Energy Other environmental impacts Water
Climate change programme Water programme Supply chain programme Field of application
ICT-specific
not ICT-specific
"CDP holds the world’s largest database of corporate climate change information. One of our guiding principles is transparency and a public response can be viewed by current and potential investors, customers and any other interested party. This provides a platform for a responding company to demonstrate their actions and achievements. It is also a means to advertise any future plans." Utilisation and Dissemination
Many ICT-related companies have published under CDP, some of them include: Dell Fujitsu Intel IBM Toshiba Logitech Acer HP Lenovo
Generic features
Companies‘ scores are based on their questionnaires
ICT-specific features
"Investor CDP 2012 Information Request – Information & Communications Technology": The questions have been developed based on extensive consultation with ICT companies, investor organisations, consultancies, policy makers and
Towards an overall measurement methodology of the carbon and energy footprints of the | 205 ICT sector
Annexes
Carbon Disclosure Project other experts in GHG accounting. The Carbon Disclosure Project (CDP) has developed this ICT sector module for ICT companies responding to the Investor CDP information request. The module should be completed by companies falling under the “Information Technology” and “Telecommunications” There are a number of initiatives being developed to establish methodologies for calculating and reporting of ICT sector corporate emissions and those of their products (e.g. GHG Protocol Product Standard sector guidance, as well as initiatives being developed by the EU). Companies are encouraged to use these methodologies where applicable in responding to the module and to reference their use when asked about methodologies or in the comment fields as directed. CDP does not favour a particular PUE calculation methodology and is interested in finding out the most robust and commonly used methodology; however the Green Grid’s recommendation for measuring and reporting overall data center efficiency (PUE) is mentioned. Interaction with other methodologies
206 |
Companies are encouraged to assess the relevance of questions in accordance with the principles of the GHG Protocol Corporate Standard Other GHG Protocol standards, PAS 2050 and ISO 1404/14044 are mentioned for reference, but not mandatory
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
A.2. ICT-specific, organisation-oriented methodologies Table 46: ITU-T L.1420 ITU-T L.1420 Name of Initiative/ Methodology
Recommendation ITU-T L.1420: Methodology for energy consumption and greenhouse gas emissions impact assessment of information and communication technologies in organisations
Version/Link
L.1420(02/2012): Version 1.0 www.itu.int/rec/T-REC-L.1420/en
History and Status
Approved in February 2012 Publicly available and used
Initiative or Methodology
Methodology
Developed by
ITU (see Table 58)
Involved companies/ parties Scope
Field of application
Secretary of Study Group 5: Jean-Manuel Canet (Orange Business Services, France) Associate secretary: Takafumi Hashitani (Fujitsu, Japan) Company environmental accounting Scope 1 Scope 2 Scope 3 (optional)
Product environmental assessment Life cycle approach Use phase
GWP GWP based on IPCC (2007) Energy consumption focusing on secondary energy used in the organisation
Energy Other environmental impacts
ICT-specific
not ICT-specific
Identifying energy consumption and GHG impacts of the organisation Providing information to decisions-makers in organisations Selecting relevant indicators for monitoring of environmental performance Understanding improvements in GHG emissions over time Assessing first and second order effects defined in ITU-T L.1410 emerging from the use of ICT in non-ICT organisations. Utilisation and Dissemination
Currently published in February 2012. It is not widely adopted. No utilisation is known.
Generic features
GHG offset is not taken into account. For ICT organisations, it can be used as a supplement to ISO 14064-1 and GHG Protocol standards. Scope 1 and Scope 2 GHG emissions shall be included. GHG emissions in scope 3 should also be included. For scope 3 GHG emissions, a reference table indicating the reporting structure and scope 3 sources is given in Appendix I. The general steps include: Definition of organisational boundaries defining which parts of the organisation to include in the assessment and operational boundaries defining activity associated with Scope 1, 2 and 3. Identification of energy consumption and GHG sources.
Towards an overall measurement methodology of the carbon and energy footprints of the | 207 ICT sector
Annexes
ITU-T L.1420 Selection of quantification methodology Calculation of energy consumption and GHG emissions An uncertainty assessment for GHG emissions shall be performed in accordance with clause 5.4 of ISO 14064-1 (ICT organisations) The result needs to be aggregated to an organisational level and on an annual basis. ICT-specific features
Assessing GHG impact and energy consumption of ICT in organisations, the following aspects shall be addressed in accordance with the considered scopes: ICT goods used by the organisation (e.g. PCs, flat screens listed in Annex A) Support equipment for ICT goods used by the organisation (e.g. cooling and power supply equipment) ICT associated consumables used by the organisation (e.g. ink cartridges, papers and DVDs) Software and ICT services used by the organisation (e.g. software, telecommunication services) Staff responsible for purchase, operation and maintenance of ICT goods, networks and services. For scope 3 GHG emissions, impact from all life cycle stages except the use stage should be divided by the operational life time to get the yearly impacts. Cut-off principles described in ITU-T L.1410 are applicable to scope 3 categories.
Interaction with other methodologies
[ITU-T L.1400] Recommendation ITU-T L.1400 (2011), Overview and general principles of methodologies for assessing the environmental impact of information and communication technologies. [ITU-T L.1410] Recommendation ITU-T L.1410, Methodology for environmental impact assessment of information and communication technology goods, networks and services. [ISO 14064-1] ISO 14064-1:2006, Greenhouse gases – Part 1: Specification with guidance at the organisation level for quantification and reporting of greenhouse gas emissions and removals.
208 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
Table 47: ADEME – ICT Sectoral Guidance ADEME – ICT Sectoral Guidance Name of Initiative/ Methodology
Assessing GHG emissions - Sectoral Guidance for the ICT sector ("Réalisation d'un bilan des émissions de gaz à effet de serre - Guide sectoriel: Technologies Numériques, Information et Communication")
Version/Link
January 2012 www.ademe.fr
History and Status
Recently published Some sections of the document are expected to be updatable: GHG emissions reductions best practices, emission factors and data sources (will be updated by future inputs from the industry, experts, etc. in a database called Base Carbone®, implemented by ADEME, www.basecarbone.fr)
Initiative or Methodology
Methodology (guidance)
Developed by
ADEME (French Environment and Energy Management Agency) CIGREF (association of large French companies dealing with ICT thematics)
Involved companies/ parties
Members of the steering group: ADEME APCC Atrium Data CIGREF CLER CNRS Demtech Greenflex GreenIT.fr INRIA La Poste Meta IT Orange Sagemcom Syntec Numérique SFIB / HP Zen'to
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 (recommended) GWP
Product environmental assessment Life cycle approach Use phase
Energy Other environmental impacts
State-of-the-art of how to include ICT activities in GHG reporting of organisations Provides guidance on the definition of the organisation and operations boundaries Field of application
ICT-specific
not ICT-specific
ICT activities in all types of organisations The guide builds on ISO 14064-1, ISO 14069 (draft state at publication of the final document), complete GHG Protocol series, Bilan Carbone®. Therefore, results should be usable in an international context
Towards an overall measurement methodology of the carbon and energy footprints of the | 209 ICT sector
Annexes
ADEME – ICT Sectoral Guidance Can be used in the context of the French Grenelle legislation (Article 75), which requires a GHG emissions reporting for organisation fulfilling given conditions, or for internal reporting and strategy (but not for comparative purposes). Utilisation and Dissemination
None yet
Generic features
Recommends an horizontal analysis of the footprint outcomes by aggregated domain (e.g. working environment, production infrastructure, waste and consumables, human activities) besides the analysis made for the usual contributors (e.g. indirect emissions due to electricity use) Provides examples of emission reduction actions (30 factsheets), for the establishment of an internal action plan Emission factors and secondary data are provided for datacenters, user's working environment, human activities, logistics, network and telecommunication services, and outsourced services. Data requirements are also expressed. Uncertainties are provided for all emissions factors and secondary data presented No content on allocation rules
ICT-specific features
Specific guidelines and examples of main footprint contributors are given for: ICT using organisations Organisations hosting IT activities Telecommunications service providers ICT products manufacturers
Interaction with other methodologies
Compatible with ISO 14064-1, ISO 14069, GHG Protocol (including scope 3 standard)
210 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
A.3. Generic product-oriented methodologies Table 48: GHG Protocol Product Standard GHG Protocol Product Standard Name of Initiative/ Methodology
GHG Protocol Product Life Cycle Accounting and Reporting Standard
Version/Link
September 2011 www.ghgprotocol.org
History and Status
Development started in 2008 25 member Steering Committee of experts provided strategic direction throughout the process. First draft: 2009 38 companies from a variety of industry sectors “road tested” the first draft and provided feedback on its practicality and usability in 2010 Publicly available and used
Initiative or Methodology
Methodology
Developed by
Greenhouse Gas Protocol Initiative (see Table 41)
Involved companies/ parties
Advisors include: Dell Inc. Technical Working Group members: Computacenter Canadian Standard Association Carbon Trust Intel SAP
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 GWP GHG covered:CO2, CH4, N2O, SF6, PFCs, and HFCs (Kyoto Protocol) Additional GHGs included in the inventory shall be listed in the inventory report
Product environmental assessment Life cycle approach Use phase
Energy Other environmental impacts GTP (global temperature potential) and other environmental impacts can be presented as additional information
Life cycle approach, but where suitable (e.g. intermediate products): cradleto-gate approach (For intermediate product cradle-to-gate inventory results to be useful to a downstream customer doing a final product cradleto-grave inventory) Field of application
ICT-specific
not ICT-specific
All regions All economic sectors Intended use: External communication Comparison over time (Setting a reduction target and tracking inventory changes over time is not required to claim conformance
Towards an overall measurement methodology of the carbon and energy footprints of the | 211 ICT sector
Annexes
GHG Protocol Product Standard with the Product Standard) Product comparisons, beyond tracking product performance over time, need additional specifications to ensure consistent application of this standard for a product or product category Utilisation and Dissemination
Road tester: Acer Deutsche Telekom AG Lenovo Rogers Communications Tech-Front (Shanghai) Computer Co., Ltd.
Generic features
100 year GWP characterisation factors Companies shall report the source and date of the GWP characterisation factors used IPCC values are mentioned and listed on the website, but not mandatory Offsets are not taken into account, but removals are Functional unit/reference flow: For all final products, companies shall define the unit of analysis as a functional unit For intermediate products where the eventual function is unknown, companies shall define the unit of analysis as the reference flow Critical review by first or third party is required Results should be reported (requirement list) Cradle-to-gate and gate-to-gate inventory results should be reported separately (if not limited by confidentiality) Companies shall collect primary data for all processes under their ownership or control Companies shall assess the data quality of activity data, emission factors, and/or direct emissions data Inventory results shall not be calculated with weighting factors Aircraft transport: Multipliers or other corrections to account for radiative forcing may be applied, type of multiplier and source should be reported Using offsets to achieve reduction targets: Companies should strive to achieve their reduction targets entirely from emission sources within the inventory boundary. If the company is unable to meet the target through those reductions, it can use offsets that are generated from sources external to its inventory boundary.
ICT-specific features
ICT-specific guides are under development (draft status): Guide for assessing GHG emissions of Desktop Managed Services (Table 54) Guide for assessing GHG emissions of Telecommunications Network Services (Table 55) Hardware and equipment Data centers Software Cloud computing Transport substitution
Interaction with other methodologies
References to other GHG Protocol standards (Corporate Standard, Scope 3 Standard, Project Standard) In general, the GHG Protocol standards and guidelines can be used together. For available tools and additional information not specific to the Product standard, see the GHG Protocol Corporate standard (Table 41) Klaus Radunsky, ISO/ DIS 14067 Working Group Convener was in the
212 |
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
GHG Protocol Product Standard Steering company of this standard The Product Standard builds on the framework and requirements established in the ISO LCA standards (14040:2006 and 14044:2006) and PAS 2050 Other references: ILCD Handbook ISO 14025 for PCRs ISO 14040/14044 and SETAC Guideline for LCA regarding critical review
Towards an overall measurement methodology of the carbon and energy footprints of the | 213 ICT sector
Annexes
Table 49: PAS 2050 PAS 2050 Name of Initiative/ Methodology
PAS 2050:2011 Specification for the assessment of the life cycle greenhouse gas emissions of goods and services
Version/Link
Revised version: September 2011 www.bsigroup.com/pas2050
History and Status
Initiative or Methodology Developed by
Development of PAS 2050 began in 2007 First version was published in 2008 Publicly available and used Methodology DEFRA (Department for Environment, Food and Rural Affairs, UK) DECC (Department of Energy and Climate Change, UK) BIS (Department for Business, Innovation and Skills, UK)
Involved companies/ parties
Members of the steering group (2011 Revision): GHG Protocol ISO TC207/SC7/WG2
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 GWP 100-year global warming potentials of 63 GHG defined by IPCC (2007)
Product environmental assessment Life cycle approach Use phase goods and services Energy Other environmental impacts
Life cycle and cradle-to-gate assessments (Cradle-to-gate GHG emissions assessment information shall be clearly identified as such so as not to be mistaken for a full assessment of the life cycle GHG emissions of a product) GHG offsets should not be taken into account Field of application
ICT-specific
not ICT-specific
PAS 2050 does not specify requirements for the disclosure or communication of the results of an assessment Not UK-specific, but most users are based in UK (BSI Survey: 38%) Supports product comparisons No requirements for communication Utilisation and Dissemination
Generic features
214 |
Trial use by (PAS 2050:2008 – Report of these trials are public): IBM Johnson & Johnson AkzoNobel 100-year global warming potentials defined by IPCC (values are given in the annex of PAS2050) No multiplier or other correction shall be applied to the GWP of emissions and removals arising from aircraft transport: Entities wishing to account for radiative forcing should do this separately from their PAS 2050 conformity assessment. Information on an appropriate multiplier is provided in 2010 Guidelines to DEFRA/DECC’s GHG Conversion Factors for Company Reporting: Methodology Paper for Emission Factors. If radiative forcing is
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
PAS 2050 accounted for in a parallel assessment, then the outcome including radiative forcing should be recorded separately and clearly differentiated. Functional unit: Where a product is commonly available on a variable unit size basis, the calculation of GHG emissions shall be proportional to the unit size (e.g. per kilogram of goods sold, or per month or year of a service provided). For services, the appropriate reporting unit may be established either on the basis of time or event. Whenever PCRs exist, they should be used (or it should be explained why they are not useful) Principles to develop and use sector- or product-specific approaches known as “supplementary requirements”. These are akin to, and may include, “product category rules” or “product rules”. While this PAS does not require external disclosure or public communication of the assessment, where claims of conformity to PAS 2050 are made, the provisions in 10.2 and 10.3 shall apply. These provisions include identification of the type of certification/verification undertaken (10.2) and requirements for how the claim shall be expressed (10.3). Additional guide: The Guide to PAS 2050:2011: How to carbon footprint your products, identify hotspots and reduce emissions in your supply chain: Uncertainty and sensitivity analyses are recommended by the guide ICT-specific features Interaction with other methodologies
None PAS2050 builds on the LCA methodologies of ISO 14040 and ISO 14044, and uses adapted definition of 14064-1. A preliminary assessment of the sources of GHG emissions in the life cycle of a product may be undertaken using secondary data or through an Environmentally Extended Input–Output (EEIO) approach. The appropriate method for self-verification and for presentation of the results shall be through the application of ISO 14021. Many changes of the 2011 revision follow the harmonisation of PAS2050 with ISO/ DIS 14067 and GHG Protocol Product Standard (both as drafts) UK government promotes the use of PAS2050
Towards an overall measurement methodology of the carbon and energy footprints of the | 215 ICT sector
Annexes
Table 50: ISO 14040/14044 ISO 14040/14044 Name of Initiative/ Methodology
ISO 14040 Environmental management – Life cycle assessment – Principles and framework ISO 14044 Environmental management – Life cycle assessment – Requirements and guidelines
Version/Link
ISO 14040: Second edition: 2006-07-01 ISO 14044: First edition: 2006-07-01 www.iso.org
History and Status
First version: 1997 Revised version 2006 The second edition of ISO 14040, together with ISO 14044:2006, cancels and replaces ISO 14040:1997, ISO 14041:1998, ISO 14042:2000 and ISO 14043:2000, which have been technically revised. Publicly available and used
Initiative or Methodology
Methodology
Developed by
International Organisation for Standardisation ISO, Technical Committee TC 207: Environmental management, Subcommittee SC 5: Life cycle assessment
Involved companies/ parties
Organisations in liaison with ISO TC207/SC5: CI, EC, ECOS, FAO, IAI, ICMM, IDF, INLAC, SETAC, WBCSD, WFN, World Steel Association
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 GWP (optional)
Product environmental assessment Life cycle approach Use phase Products and services Energy (optional) Other environmental impacts
Life cycle assessment studies and life cycle inventory studies (LCI studies exclude the LCIA phase) LCI studies alone should not be used for comparative studies (public) The methodology is not focussed on GWP, but GWP can be chosen as one of the possible impact categories ("It should be recognized that there is no scientific basis for reducing LCA results to a single overall score or number.") An LCIA that is intended to be used in comparative assertions and disclosed to the public shall employ a sufficiently comprehensive set of category indicators. The comparison shall be conducted by category indicator. Field of application
ICT-specific
not ICT-specific
Possible applications: Product development and improvement Strategic planning Public policy making Marketing Utilisation and Dissemination
216 |
Examples: Apple claims on his website that its product carbon footprints are calculated in accordance with ISO 14040/14044 Dell: "Carbon Footprint of a Typical Business Desktop From Dell" Fujitsu: "Fujitsu Technology Solutions GmbH assigned the bifa
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
ISO 14040/14044 environmental institute to carry out a Life Cycle Assessment (LCA) for the Desktop ESPRIMO E9900 based on the international standards ISO 14040 and ISO 14044" HP: "The study examined environmental impact during the entire product life cycle across a variety of LCA categories, including total waste and global warming potential, and adheres to the International Organisation for Standardisation (ISO) 14040 series of standards." Generic features
Data quality requirements shall be specified (goal and scope definition) A check on data validity shall be conducted during the process of data collection to confirm and provide evidence that the data quality requirements for the intended application have been fulfilled. Reflecting the iterative nature of LCA, decisions regarding the data to be included shall be based on a sensitivity analysis to determine their significance Neither impacts categories nor characterisation models, which should/could be used, are named in the standards Optional element: "weighting": converting and possibly aggregating indicator results across impact categories using numerical factors based on value-choices; data prior to weighting should remain available (but not for public, comparative studies) An analysis of results for sensitivity and uncertainty shall be conducted for studies intended to be used in comparative assertions and disclosed to the public.
ICT-specific features Interaction with other methodologies
None For a complete methodology ISO 14040 and 14044 have to be used together, as one clarifies general principles and framework (14040) and the other one the requirements and guidelines (14044), therefore both standards are described in the same fiche Examples of impact categories are described in ISO/TR 14047
Towards an overall measurement methodology of the carbon and energy footprints of the | 217 ICT sector
Annexes
Table 51: ISO/ DIS 14067 ISO/ DIS 14067 Name of Initiative/ Methodology
ISO/DIS 14067: Carbon footprint of products – Requirements and guidelines for quantification and communication
Version/Link
Draft (Status: 2012-01-18)
History and Status
Voting began on 2012-01-06 and terminated on 2012-06-06. The plan is that the standard shall be approved and implemented in the first half of 2013 The first meeting of ISO/TC 207 WG2 was held in Apr. 2008 in Vienna. The latest meeting was the tenth meeting which took place 21-24 November 2011 in Canada. Under development
Initiative or Methodology
Methodology (International Standard)
Developed by
ISO (International Organisation for Standardisation), Technical Committee TC207, Environmental management, Subcommittee SC 7, Greenhouse gas management and related activities
Involved parties
companies/
Scope
ISO/TC207, SC 7, with convenors (Klaus Radunsky - Austria, Federal Environment Agency - and Daegun Oh - University of Hanyang, Korea) and Secretary (Katherina Wührl - DIN, DE) 107 Experts from about 30 countries including developing countries like China, Argentina, Indonesia, etc. Organisations in liaison: ANEC, CDP, EC, ECOS, EuropaBio, GEDNet, GEN, GHG, IAF, IAI, ICLEI, IDF, IISRP, INLAC, SETAC, UNFCCC, WRI Company environmental accounting Scope 1 Scope 2 Scope 3
Field of application
Product environmental assessment Life cycle approach Use phase
GWP GWP based on the IPCC (2007)
Energy Other environmental impacts
ICT-specific
not ICT-specific
Addresses the quantification and the communication of PCF Provides requirements and guidance for an organisation which decides to communicate the PCF results including internal and external communication It is stated that the PCF study shall not be used for a communication on overall environmental superiority because a PCF study covers only a single impact category. It is stated that comparisons based on the PCF of different products shall not be made public because of the inherent limitations of this standard. Comparison of PCFs is only possible if the calculation of PCFs follows identical PCF quantification and communication requirements. Utilisation and Dissemination Generic features
218 |
None (still under development) GHG offsetting is not allowed in the PCF quantification and thus is not reflected in any PCF communication Review/verification (internal or external) is depending on the communication options (mandatory or optional). Where a critical review is
Towards an overall measurement methodology of the carbon and energy footprints of the ICT sector
Annexes
ISO/ DIS 14067 applicable, guidance is provided in ISO 14044:2006, Clause 6. Requirements on the reporting are given A list of GWP (100 year time horizon) according to IPCC (2007) is given. Methodological features: Treatment of specific GHG sources and sinks is required. It includes treatment of fossil and biogenic carbon, treatment of electricity, land use change, soil carbon change and carbon storage in products, Non-CO2 emissions and removals from livestock and soils as well as aircraft GHG emissions. The requirement on electricity can be regarded as the ICT specification, since electricity is indispensable for the ICT-sectors. The requirement on aircraft transport is also regarded as the direct relevant issue to the ICT-sector, as many components (microchips) and products are transported by the aircraft. Allocation procedure for reuse and recycling is required. Cut-off criteria shall be consistent. The effect of the selected cut-off criteria on the outcome of the PCF shall be assessed and described in the report. Five PCF communication options are provided: External communication report (clause 9.1.2), Performance tracking report (clause 9.1.3), Claim (clause 9.1.4), Label (clause 9.1.5) Declaration (clause 9.1.6). ICT-specific features Interaction with other methodologies
Definitions of software and hardware are provided in the Standard Draft (line 184-187) Normative: In accordance with ISO 14025 and ISO 14044 Informative: This International Standard is based on the ISO 14020 series (with the regards to environmental claims, labels and declarations), ISO 14040 series (Standards on life cycle assessment) and ISO 14064-1.
Towards an overall measurement methodology of the carbon and energy footprints of the | 219 ICT sector
Annexes
Table 52: BP X30-323 BP X30-323 Name of Initiative/ Methodology
BP X30-323-0 - General principles for an environmental communication on mass market products ("Principes généraux pour l'affichage environnemental des produits de grande consommation")
Version/Link
June 2011 www.afnor.org/
History and Status
The first part of the standard (BP X30-323-0) is currently used to develop Product Category Rules (PCR) that need to be followed for the environmental communication of specific product groups. Such PCR have already been validated for the following product groups: television, shampoo, shoes, backpack, bedding, toilet paper, racket, wooden furniture, padded seat. Others are in development.
Initiative or Methodology
Both:
Initiative: environmental communication Methodology: general principles in BP X30-323-0 and calculation methodologies in related PCR
Developed by
AFNOR (French Standardisation Organisation) and ADEME (French Environment and Energy Management Agency)
Involved companies/ parties
Public policy makers, many actors from the distribution sector and the industry, life cycle assessment experts, environmental NGOs
Scope
Company environmental accounting Scope 1 Scope 2 Scope 3 GWP GHG are covered in accordance to IPCC (2007)
Product environmental assessment Life cycle approach Use phase
Energy Other environmental impacts
Simplified LCA approach with selected environmental indicators (depending on product group). GHG emissions (in kg CO2 eq.) is the only mandatory indicator for all product groups. GHG offsets shall not be taken into account. Other exclusions include: R&D activities, workers transportation from/to their homes, marketing and advertisement activities. Cut-off criteria are based on mass, energy and environmental relevancy (can be neglected if