I have a doubt regarding GHG protocol and SBTi GHG inventory.
CASE 1: the Company A produces semi-finished products (like PCBA, printed circuit board assembled with electronic components). Is it possible to avoid calculation of category 10 (Processing of Sold Products) and 11 (Use of Sold Products), according to GHG protocol and SBTi?
The fact is that it is basically impossible to evaluate emission related to the mounting and usage of PCBA (mounting can be done in several ways, components do not have any “own” energy consumption and both mounting and usage are totally out of control of the Company A). Also, no literature data can be found and it has to be considered that the company is producing many thousand of different products and final applications are all different.
CASE 2: the Company B produces in contract manufacturing (B2B manufacturing of a product with a given design; product will be marked with the customer company name).
Is it possible to avoid calculation of category 11 (Use of Sold Products), according to GHG protocol and SBTi?
The fact is that, even if the size of emission is relevant, since the Design is ownership of the customer, the Company A cannot have any Influence on the Use emissions (There isn’t any potential emissions reductions that could be undertaken or influenced by Company A), that is one of the criteria for relevance according GHG protocol.
3 answers yet
Anonymous User
Thanks for the answer. I still have some doubts, that i try to explain.
Regarding CASE 1, in reality each product does have a specific application. The problem is that there are approximately 2000 different product codes which don’t have emissions as standalone products (Printed Circuit Boards with Assembled components), each corresponding to a different application.
Mapping Scope 3, Category 11 emissions for every single product use would require an effort far beyond what is considered “reasonable effort” under the GHG Protocol.
In addition the regions of final use are unknown by the company and therefore it’s impossible to define the proper emission factors for the use phase. Similar situation for all the downstream emissions, but for other would be kind of easier to calculate with some reasonable assumption.
Regarding CASE 2, it is more related to the principle of “influence”, since Contract Manufacturing means that the company only assembly parts, with a given design.
In addition the regions of final use are unknown by the company and therefore it’s impossible to define the proper emission factors for the use phase.
In reality, in both cases, if we try to do a calculation of impact of downstream activity (with many assumption, often not accurate and not based on real data), it will result that emission are “relevant” (especially for cat. 11), but this will be an inaccurate and misleading information..
Hello Luca,
For CASE 1, I would use exactly the reasoning you gave in the comment here as the reason for exclusion. In the end, “relevance” is not the sole guiding principle but one among four others (completeness, consistency, transparency, accuracy) which need to be balanced. All of these underlie the proposition that the effort to assess the scopes has to be reasonable.
Regarding CASE 2, “influence” is not one of the official principles; however, it should still be considered a factor guiding the amount of effort deemed reasonable. If you have direct influence on the amount of emissions caused, a verifier will usually expect you to put in more effort to obtain proper data coverage and inclusion of emissions, and vice versa.
So, in the end, you could argue to exclude the emissions from your scope 3 downstream in both cases, providing the respective reasoning to your verifier. In your reasoning, I would still try to give an assessment of the magnitude of emissions expected there. Following the principle of “relevance” in this case can also mean disclosing that relevant emissions are expected in those scopes but explaining why you excluded them anyway because of the arguments stated.
Hi Luca,
to add a bit context to Case A: In the Corporate Value Chain Accounting and Reporting Standard (https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf), the GHG protocol defines the possibility to exclude downstream emissions if the eventual end use of sold
intermediate products may be unknown (Chapter 6.4).
Here’s the respective segment:
“In certain cases, the eventual end use of sold intermediate products may be unknown. For example, a company may produce an intermediate product with many potential downstream applications, each of which has a different GHG emissions profile, and be unable to reasonably estimate the downstream emissions associated with the various end uses of the intermediate product. In such a case, companies may disclose and
justify the exclusion of downstream emissions from categories 9, 10, 11, and 12 in the report (but should not selectively exclude a subset of those categories).”
The chapter also states an example for when emissions can be excluded.
However, the standard also underlines the principle of “Relevance”: Ensuring that the GHG inventory appropriately reflects the GHG emissions of the company and serves
the decision-making needs of users – both internal and external to the company.
If you want to exclude downstream emissions, you should still give a (at least qualitative) assessment of the potential magnitude of the disclosed emissions, as well as an explanation on why you think the exclusion won’t influence the capability of the assessment to serve internal and external stakeholders.