Carbon neutrality is an approach for organizations and society to respond to climate change challenges. It involves measuring an organization's carbon footprint, reducing emissions as much as possible, and offsetting any remaining emissions. Standards like the GHG Protocol provide guidance on calculating footprints while PAS 2060 specifies requirements for demonstrating carbon neutrality. Some companies pursuing carbon neutrality include Ikea, which aims to be 100% neutral by 2020, Marks & Spencer which achieved neutrality in 2013, and Google which has been neutral since 2007. However, questions remain around how transparent claims are and whether current targets will help limit global warming to 2 degrees.
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Carbon Game is On! Tools and Methods for Achieving Carbon Neutrality
1. Carbon Game is On!
Concept – Tools - Implementation
Sitra workshop for carbon neutrality
Radisson Blu Seaside Helsinki 15.4.2015
Katriina Alhola
Jáchym Judl
2. Part I – About Carbon Neutrality concept
Part II – Methodologies for carbon
neutrality and examples of pro-active
companies
2
Content
3. ● The global concern about climate change and the challenge of
keeping global warming in the level of two degrees has raised
interest towards ’carbon neutral’ concepts in society and business
life
● Businesses benefit from carbon neutrality approach e.g. by reduced
energy and resource use leading to lower costs and optimised
supply chains, strengthened reputation, new products and
businesses and increased competitiveness
● Carbon neutrality – although often defined by common usage - is a
message to customers and staff implying that climate issues and
emission reductions are incorporated into the business
3
Why do we strive for carbon neutrality?
Carbon neutrality is seen as a means for organizations and society to
respond to the challenges of climate change mitigation.
4. “To be carbon neutral means
having a net zero carbon footprint”
Definition of carbon neutrality based on
literature
Carbon neutrality can be achieved through a transparent process of:
1) Measuring and calculating GHG emissions, i.e. carbon footprint
2) Reducing emissions as much as possible
3) Offsetting the remaining emissions
Source: (DECC/Defra 2009)
4
5. ”The Standard for Carbon Neutrality” PAS 2060 describes carbon
neutrality as a process including:
5
Calculating carbon footprint according to ISO 14064-1 or GHG corporate protocol.
The organization must develop a carbon management plan that includes a public commitment to
carbon neutrality, outlines a time scale, specific targets for reductions, the planned means of
achieving reductions and how residual emissions will be offset. The reductions should be either in
the total amount of carbon emitted (in absolute terms) or a reduction in carbon intensity (in relative
terms), for example carbon emissions per unit output or per € of turnover.
MEASUREMENT
REDUCTION
By high quality, certified carbon credits (Clean Development Mechanism, Joint Implementation or
Voluntary Carbon Standard), verified by third party.
OFFSETTING RESIDUAL EMISSIONS
Disclosure of all the documentation including evidence of emission reductions and retired offsets. The
standard accepts self validation, other party validation and third party independent validation.
DOCUMENTATION AND VERIFICATION
How to achieve carbon neutrality?
6. 6
Document Level and focus Scope and type
GHG Protocol
(WBCSD/WRI)
Organizations; to measure, manage, and report greenhouse
gas emissions.
International
standard
ISO 14064-1 Organizations; to specify principles and requirement for quantification
and reporting of greenhouse gas (GHG) emissions and removals. It
includes requirements for the design, development, management,
reporting and verification of an organization's GHG inventory.
International
standard
PAS 2050
(British
Standard
Institution)
Products and services; to specify requirements for the assessment of
the life cycle GHG emissions (builds on existing life cycle assessment
methods established through BS EN ISO 14040 and BS EN ISO
14044).
UK / international
guidelines
PAS 2060:2014
Carbon
neutrality
Organizations; Specification for the demonstration of carbon neutrality UK standard /
international
specification
Defra/DECC Organizations; how to measure and report corporate greenhouse gas
emissions
UK guidance
National carbon
offset standard
Business operations, products, events;
Guidance on genuine voluntary offsets and its minimum requirements
for calculating, auditing and offsetting a carbon footprint to achieve
carbon neutrality.
Australia /
voluntary program
/ standard
In addition, a wide range of private companies have launched their own certificates and
evaluation process for carbon neutrality, which is often based on the guidance given in
GHG Protocol and/or ISO 14001 standards for footprint calculation. For example:
Carbon Neutral Protocol / Carbon Neutral Company
Review of standards and guidance to carbon
neutrality, examples:
7. Roadmap to get there
Carbon neutrality concept
– from a process of gaining energy-
efficiency to an ultimate goal of business?
7
Process view:
How to reduce emissions?
Strategic view:
How the company works?
What the company does?
Measure
Reduce
Compensate
Carbon neutrality – the ultimate
strategic goal for business?
How to communicate about
carbon neutrality targets and
achievements?
9. How to define the boundaries for the calculations, i.e. which emissions and
from which sources should be included, and how these should be
calculated and measured?
Emission scopes:
9
How to calculate carbon footprint?
All direct GHG emissions, such as emissions from facilities operated by the company or its fleet.
Indirect GHG emissions from consumption of purchased electricity, heat or steam.
Direct emissions1
Indirect emissions2
Other indirect emissions, such as the extraction and production of purchased materials and fuels,
transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related
activities (e.g. T&D losses) not covered in Scope 2, outsourced activities, waste disposal, etc.
Other emissions3
Source: GHG Protocol
10. After all GHG emissions have been accounted, reduction targets must be
set. Different methodologies and approaches are used.
10
What methodologies are used to set
reduction targets?
• The Sectoral Decarbonisation Approach (SDA)
• The 3% Solution
• Carbon Stabilization Intensity (CSI)
• C-FACT (Corporate Finance Approach to Climate-Stabilizing Targets)
• The Center for Sustainable Organization’s (CSO) context-based carbon metric
• GHG emissions per unit of value added (GEVA)
• MARS method
Source: http://sciencebasedtargets.org/existing-methodologies/
Science-based accounting methodologies
11. How to compensate emissions?
● Carbon offsets to CDM / JI projects or Voluntary Emission
Reductions (VER)
● Carbon credits
● Positive handprint?
11
How could companies compensate emissions in a way that would cause
genuine additional emission reductions without increasing emissions
elsewhere, and avoiding double counting at the same time?
12. Questions to ask the offsets provider:
12
→ What is/are the specific offset project type(s) (e.g., wind farm, methane capture, etc.) in your portfolio and where
are the carbon offset projects located?
→ Have your carbon offsets been certified to a recognized standard (Gold Standard, CDM, VCS, Climate Action
Reserve, Green-e Climate Protocol for Renewable Energy, etc.) to ensure quality? If so, please list the
standard(s).
→ What steps have you taken to ensure that the carbon offsets you are selling are additional?
→ How do you ensure that the greenhouse gas reductions that your carbon offsets represent are quantified
accurately?
→ Are 100 per cent of your offsets validated and verified by accredited third parties?
→ If you are selling offsets that will be created in the future (i.e., forward crediting), what mechanisms (insurance
or otherwise) have you put in place to ensure those offsets will actually be delivered?
→ What percentage of your portfolio (by tonnes of CO2e) is made up of offsets from tree-planting or agricultural
soils projects? If it is a significant percentage (more than 20 per cent of your portfolio), how do you address
permanence risks?
→ Do you use a publicly accessible registry to track your offsets? If yes, please list the website. If not, how do you
ensure that your offsets are only sold to one buyer? And do you "retire" offsets that you sell?
→ What is your company doing to educate consumers about climate change and the need for government policy
to deal with it?
→ Are you a member of the International Carbon Reduction and Offset Alliance (ICROA), which has a Code of
Best Practice that members must adhere to?
Source:
http://www.davidsuzuki.org/publications/downloads/2009/climate_offset_guide.pdf
13. Examples of pro-active companies
Ikea
13
One of the leading brands in carbon neutrality. Uses their
environmental credentials in communication with customers.
Committed to be 100 % carbon neutral by 2020.
Committed to produce as much renewable energy as they consume
in their operations.
The share of renewable energy:
→ 37 % in 2013
→ 70 % in 2016 (target)
→ 100% by 2020 (target)
14. To become carbon neutral by 2012 and the world’s most sustainable retailer.
Examples of pro-active companies
Marks & Spencer UK
14
Carbon neutrality was extended to include all M&S operated and joint venture stores, offices,
warehouses and delivery fleets worldwide.
2007: carbon neutral by 2012
2013: carbon neutrality in broader context
2014-2020: new business model
Engaging customers and moving towards new business models.
2020 onwards: carbon positive
New sustainable ways of doing business that are carbon positive, circular and fair.
M&S aims at being carbon positive company. Footprint calculation
according to GRI Global Reporting Initiative G4.
15. Examples of pro-active companies
15
Footprint calculated according to the GHG Protocol. Calculations are
verified by an external auditor. Google claims to have be carbon neutral
since 2007.
Google’s view on carbon neutrality:
How about being carbon positive?
18. Examples of pro-active companies
Interface
18
● Emissions accounting according to the GHG Protocol.
● Emissions reduced by 71% per unit of product from 1996
to 2013, aim is to eliminate any negative impact of the
company by 2020.
In 2014 Interface’s European manufacturing:
● Consumed 95% renewable energy
● Reduced absolute carbon by 90% compared to 1996
● Did not send any waste to landfill
Company which is proactive and sets an
example. Eco-design is core of their products.
LCA is applied widely.
Picture credits: http://wp39.gtnbuildingmaterials.com/library/products/flooring/carpet/interfaceflor-llc-carpet-tile-viva-
colores-redesign-matrix/
19. Carbon neutrality in the Finnish context
Posti
19
Aims to reduce carbon-dioxide emissions by 30% by 2020, in relation to net
sales (compared to 2007).
Carbon neutrality
on the product
level: Posti Green
Carbon neutrality
of the company
on the national
level in 2015
Carbon neutrality
of the company
on the global
level..?
Offsets not in Finland or Kyoto countries.
20. Carbon neutrality in the Finnish context
20
Why some Finnish companies communicate their carbon reduction efforts
and some don’t?
21. ● Do the current carbon neutrality targets really help to maintain the level of 2
degrees threshold in rise of temperature?
● Should we have stricter definition and more precise emission reduction
targets built in to the concept of carbon neutrality?
● How can we distinct between those companies that take real effort to cut
their emissions and those that choose to offset most or all of the emissions
with no actions for energy efficiency or emission reductions?
● What kind of compensation mechanisms are acceptable and lead to real
GHG emission reductions?
● Is the definition of zero net emissions through the steps “Measure –
Reduce – Offset” introduced in guidelines a sufficient definition/content for
carbon neutrality?
● How transparent the carbon neutral claims really are?
● Should we rather talk about low carbon instead of carbon neutral?
21
Carbon neutrality – reality or a buzzword?
The term is widely used despite the lack of clear rules for gaining carbon
neutrality and the claims rely on companies’ own interpretations. More
precise ‘rules’ are needed in order to develop the concept further.