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Energy Use & GHG

Energy Use & Greenhouse Gas Introduction

Energy production and energy use are the largest man-made sources of air pollution and greenhouse-gas (GHG) emissions. The operational, environmental, and financial impacts of energy are key issues for facility operations. Driving energy efficiency and use of renewable energy throughout facility operations is an important area of focus for all factories.

 As climate change emerges as the most severe human, environmental, and economic risk in the world, more stringent requirements and regulations may be imposed by governments. If your facility reduces your energy consumption and greenhouse gas emissions, it will help to reduce your exposure to regulatory risks or new requirements from brands. This may also create an economic advantage for your company by mitigating risk of fossil fuel and energy cost increase.

 By putting in place the necessary organization and action of an energy program facilities can:

  • reduce greenhouse gas (GHG) footprint and air emissions
  • reduce costs
  • improve processes

Energy Use in Your Factory

You can reduce your greenhouse gas emissions by reducing the total amount of energy used at your facility and/or by switching to cleaner fuel sources. To understand how to improve you first need to start by measuring your energy use and, second, use Higg to understand how your energy sources affect GHG emissions.

 Your facility must track the following sources of energy that are owned or controlled by your facility. The scope covers energy sources used in the manufacturing process as well as any other type of energy sources that are not used in the process (for canteens, dormitories, vehicles, etc…) (source: https://ghgprotocol.org ):

  • Coal
  • Natural Gas
  • Petrol
  • Diesel
  • Fuel Oil
  • Biomass
  • Solar Photovoltaic
  • Geothermal
  • Hydro
  • Micro-Hydro
  • Wind

Your facility must also track the following sources of energy are a consequence of your operations, but occur at sources owned or controlled by another entity (source: https://ghgprotocol.org)

  • Purchased electricity
  • Purchased chilled water
  • Purchased steam

Below is a list of common machines and equipment which use energy (note: this is a very small list of common industrial equipment):

  • Boiler
  • Compressed Air System
  • Motors
  • Generator
  • HVAC
  • Incinerators
  • Chiller and burner
  • Dryers
  • Lighting
  • Production Equipment

Energy Use in Higg FEM

The Energy section in the Higg FEM serves as a method to evaluate a facility’s progress at implementing a successful energy program. While good energy management provides significant benefits, including cost savings and efficiency, it requires adequate organizational focus and resources to correctly implement and be successful while reducing impact on the environment.

 The Higg Index Energy section requires you to:

  • Track all energy and fuel sources and report quantity used in the last calendar year
  • Identify which factors contribute most to energy use on site (e.g., machines, processes, or operations that use the most energy)
  • Set a normalized baseline for energy use, such as “80 MJ per unit of production in 2016”
  • Set normalized targets for energy reduction, such as “Reduce energy used per unit of production by 70% in 2020.”
  • Set an action plan with specific actions and strategies to achieve energy reduction targets
  • Demonstrate energy reductions against the baseline, such as “Last year we used 60 MJ per unit of production which is a 25% annual reduction.”

Calculating Greenhouse Gas (GHG) Emissions using Higg FEM

Greenhouse gases (GHGs) are gases in the Earth’s atmosphere that absorb/trap some of the Earth’s outgoing radiation, causing the atmosphere to warm up (called the ‘greenhouse effect’). This process is the main cause of the change in the earth’s climate, called ‘climate change’.  Energy generation and use, transportation, use of refrigeration gases, and other activities product greenhouse gas emissions that harm the environment. Reference IPCC: www.ipcc.ch.

 In addition to environmental improvement, identifying and managing the source and amount of GHG emissions can benefit your factory in the following ways:

  • Reduce material cost associated with GHG reductions
  • Increase competitive advantage by striving for carbon neutral success
  • Get a start on future regulations on carbon and GHG emissions.
  • Through tracking and driving strategic reductions the facility is demonstrating environmental stewardship.

 Your factory’s energy use generates direct and indirect GHG emissions. The GHG Protocol categorizes these emissions into three broad “scopes”:

  • Scope 1: All direct GHG emissions.
  • Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam
  • Scope 3: 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. (Source: https://ghgprotocol.org)

 Once you’ve entered your factory’s energy use in Higg FEM, the tool will provide a GHG calculation for both Scope 1 (direct) and Scope 2 (indirect) emissions based on emissions factors taken from the best publicly-available, free sources.

 

Energy & GHG - Level 1

1. Select all sources of energy for your facility:

  • Energy Source
  • Does your facility track its energy use from this source?
  • What quantity of energy was used by this source in 2018?
  • Which method was used to track this energy source?
  • What was the frequency of measurement?
  • Provide any additional comments

Suggested Upload: a) Optional: an annual summary of the energy consumption for each type of energy sources. Uploading utility bills is NOT required, however they should be available for the verifiers to review at the time of verification; b) Picture of the energy meters used to monitor the consumption of the main energy sources if applicable

You will receive full points if you are completely tracking all sources of energy that your facility uses.

You will receive partial points if you are completely tracking at least one of your energy sources but are not yet tracking all of your energy sources.

Higg FEM converts energy use data into common units (MJ), % of total use, and co2 equivalent.

What is the intent of the question?

The intent is for you to enter information from your energy invoices or meters that show how much energy your facility is using. This question also helps you build your facility’s energy source list, which provides a clear understanding of what energy is being used, where it is being used in your factory, and how much is being used.

Measurement of energy use from all sources is the foundation of energy management and the overall sustainability program for a company. Measurement of all energy sources allows you to analyze your biggest energy drivers, detect any abnormal consumption, set energy reduction targets, and measure GHG emissions. 

The purpose of completing the energy section is to identify opportunities to reduce energy use. The first step to doing that is to understand which are your largest sources of energy use. Once you know that, you will be able to prioritize reductions. For example, this question helps you understand if you should focus on reducing electricity use, or another source of energy. 

Technical Guidance:

Please include all energy used within the site’s physical boundary and operations under your business control (owned, operated or directly leased). Please exclude any outsourced services or areas such as a contracted canteen or rental shop. 

Energy use reporting is considered the first step in managing energy use. It’s recommended to start by:

  • Mapping out business and operational processes to identify sources of energy use.
  • Using utility bills to analyze the use of purchased electricity, steam and heat.
  • Tracking other fuels used for onsite energy generation such as diesel generators and coal boilers owned or controlled by the facility.
  • Tracking fuels used for mobile combustion sources owned or controlled by the facility such as private cars and fork lifts.
  • Install sub-meters to track the amount of renewable energy generated, if renewable energy is generated in-house.

 Energy FAQ

  1. What is the difference between diesel and diesel oil?
    Diesel refers to diesel used for generator or vehicle while diesel oil refers to oil used for heating/ other engineering devices.
  2. What is the difference between petrol and gasoline?
    Petrol and gasoline are the same.
  3. What is a solar photovoltaic system (Solar PV)?
    Solar photovoltaic system is a system to convert sun’s radiation into electricity supply. Therefore, solar heating system should not be considered as solar photovoltaic.
  4. What is the correct energy source category for fabric scrap?
    Fabric scrap is made of cellulose which should be considered as biomass. Since there is no specific category for fabric scrap under biomass, it can be categorized as “Biomass - Specific type not known”.
  5. How to convert steam from metric ton to the units we have on the platform?
    Steam can be reported in megajoule (MJ) according to the following formula.
    Steam (MJ) = Steam (metric ton) x 1000 (kg/ metric ton) x Specific enthalpy of steam (MJ/kg)
    while specific enthalpy of steam depends on the boiler pressure. (Please refer to the steam table: https://www.engineeringtoolbox.com/saturated-steam-properties-d_457.html)
    Example:
    How many megajoule is 200 metric ton of steam in 7 bar boiler equal to?
    Specific enthalpy of steam under boiler pressure of 7 bar = 2762 MJ/kg
    Steam (MJ) = Steam (metric ton) x 1000 (kg/ metric ton) x Specific enthalpy of steam (MJ/kg)
    = 200 x 1000 x 2762 = 552400000 MJ

How this will be verified:

Full Points

  • Documentation required
    • Frequency and method of measurement for all sources of energy
    • Electricity, fuel, steam and other energy consumption records (e.g. monthly bills and annual consumption records; metering records compiled in an excel as ok as long as the metering records are available for review as well) whose totals match the reported answers to all questions answered.
  • Interview questions to ask
    • Management is aware of laws and regulations, where applicable, concerning energy use, transport and GHG emissions?
    • Management provides the appropriate resources to ensure that applicable laws and regulations are maintained?
    • Is the facility meeting local requirements regarding energy consumption and documentation?
    • Key Employees are aware of energy use and greenhouse gas emissions permit/license requirements, where applicable?
    • Employees have access to, and understand, energy use, transport and greenhouse gas emissions procedures, where appropriate?
    • Discussion with Management:
    • Key Employees: 
  • Inspection - things to physically look for
    •  Describe the meters (how many? easy to access?...)
    • Describe the equipment related to energy (production or energy consuming)
    • Age (List number of years old)
    • Maintenance (Equipment Log is complete, and maintenance is completed on time)
    • Any leaks (of steam for example?)
    • Take pictures of energy related equipment

Partial Points

  • Documentation required
    • Frequency and method of measurement and accurate data for at least one source of energy
    • Electricity, fuel, steam and other energy consumption records (e.g. monthly bills and annual consumption record) to confirm data entered is accurate
  • Interview questions to ask
    • Discussion with Management:
      • Management is aware of laws and regulations concerning energy use, transport and GHG emissions?
      • Management provide the appropriate resources to ensure that applicable laws and regulations is maintained?
      • Is the facility compliant with local requirements regarding energy consumption and documentation?
    • Key Employees:
      • Key Employees are aware of energy use and greenhouse gas emissions permit/license requirements, where applicable?
      • Employees have access to, and understand, energy use, transport and greenhouse gas emissions procedures, where appropriate?
  • Inspection - things to physically look for
    • Describe the meters (how many? easy to access?...)
    • Describe the equipment related to energy (production or energy consuming)
      • Age (Old, recent)
      • Maintenance (appears to be well maintained?)
      • Any leaks (of steam for example?)
    • Take pictures of energy related equipment
    • Describe the gaps between what was reported in their self-assessment vs. what you observed on site

This question can be used to inform responses to The Sustainability Consortium's Home and Apparel Textiles Toolkit. The Greenhouse Gas Emissions Intensity - Manufacturing Key Performance Indicator asks respondents for the greenhouse gas emissions intensity of final manufacturing facilities. The facility data can be aggregated by brands to answer TSC's question. The Greenhouse Gas Emissions - Supply Chain Key Performance Indicator asks respondents if Scope 1 and 2 greenhouse gas emissions were reported by fabric manufacturing facilities. The facility data can be aggregated by brands to answer TSC's question.

 

Energy & GHG - Level 2

 

2. Has your facility set baselines for energy use?

If yes, select all sources of energy for which your facility has set a baseline.

Suggested Upload :A description of how the baseline was calculated (uploading annual consumption records is NOT required, however they should be available for the verifier to review at the time of verification. 

What is the intent of the question?

In order to demonstrate improvements or energy reductions, it is important to know what your starting point is. Setting a baseline (i.e. the annual performance of a set parameter at a defined base year) enables you to have clear reference point for ongoing energy performance tracking and target setting.

Technical guidance:

In order to demonstrate improvements or reductions, it’s important to know what your starting point is. A “baseline” is a starting point or benchmark that you can use to compare yourself against over time. For example, if your facility used 80 MJ of natural gas per 10,000 fabric meters in 2016, you will be able to compare your performance against this amount in future years. In this example, “8 MJ of natural gas per meters in 2016” is an example of a normalized baseline.  In the Higg FEM, a baseline should comprise a full calendar year’s data.  This is often referred to as a “baseline year data” or “base year data”.

The data needs to be stable and reliable before setting the baseline. A viable baseline is developed:

  1. Using stable data: If your factory has undergone major structural changes such as acquisition or changes in product type, in general, you should select a baseline after those changes have been completed. 
  2. Normalization: If you select a normalized baseline, it will be normalized against the production units entered into the Site Information section for annual production. For example, if you selected annual production in “meters”, your baseline will be normalized against meters. You will also have to provide the annual production in your baseline year.
  3. Verified data: Baseline data should be accurate and verifiable. Energy and production volume data from Higg FEM 3.0 verification, internal or external audit conducted by qualified personnel are acceptable sources of baseline. According to ISO 50002:2014 standard, typical energy audit should involve the following processes:
                1) Audit planning
                2) Opening meeting
                3) Data collection
                4) Measurement plan
                5) Site visit
                6) Analysis
                7) Reporting
                8) Closing meeting

The baseline year and the baseline performance level such as annual energy consumption, once decided for a target, should remain unchanged.

How this will be verified:

Yes:

  • Documentation required
    • Description for how the baseline was calculated
    • Documentation that shows the baseline matches consumption records for the year the baseline was set
    • Evidence that the baseline was communicated to the relevant employees and linked to the major impact source as identified in Level 1.
    • Communication methods may include: Meeting, bulletin board posting, newsletter release, any other form of written communication.
  • Interview questions to ask
    • Discussion with the team responsible for managing the metrics. The team must clearly explain and demonstrate how baseline data was validated (e.g., used Higg 3.0 verified data, used internal validation process, external audit, etc.)

3. Does your facility know what facility processes or operations use the most energy?

Upload the methodology for identifying the highest energy use factors

What are the highest energy use factors at your facility?

These can be any factors in production such as machines, processes, or sections

 Suggested Upload: a) Ranking of processes or services that consume the most energy (with energy consumption values); b) Copy of an energy audit conducted by an internal or external energy management specialist (if available)

It is important to understand what influences energy use the most in your facility. This allows you to strategically target those factors in order to improve energy efficiency and/or greenhouse gas emissions.

Answer Yes only if you have documented records and methodology to identify the highest factors of energy use on-site (e.g., processes, machines, etc.).

What is the intent of the question?

The intent is to have the facility complete an entire-facility analysis to evaluate the amount and sources of energy in all places where the energy is used (i.e.  processes, lighting, HVAC etc.). This question shows you where in your facility you use the most energy sources (e.g., where you use the most electricity).

For sustainability efforts to mature, a facility must identify and rank energy use influences within the facility boundary. Once a facility has an understanding of specific influences on energy use, it can strategically reduce the energy usage by prioritizing and targeting those factors. A facility must be able to measure uses before they can be effectively managed.

Technical Guidance:

A facility can evaluate the most energy consuming processes and operations based on mapping out its production processes, together with machinery list, associated energy use parameters, and energy usage data. Below are common factors which influence energy use:

  • Boilers and generators
  • Compressed air system
  • Motors
  • Old or inefficient equipment
  • Equipment location 

Here are some ways to get started:

  • Identifying individual machines that consume energy by creating a machinery list
  • Analyzing the power ratings of equipment multiplied by the hours of operation to estimate energy use
  • Installing electronic devices to track energy usage over time (e.g., data loggers, data recorders, or sub-meters)
  • Hiring a certified professional energy engineer to conduct an energy assessment
  • Consolidate the energy consumption per manufacturing process/ machine type and sort them from highest consumption to lowest consumption 

How this will be verified:

Yes

  • Documentation required
    • Provide at least one complete and up-to-date document such as:
    • Records of onsite energy influences (e.g. list of machines and energy ratings/consumption)
    • Recent energy audits conducted by a qualified energy auditor (internal or external)
    • Consumption records accurately categorized from highest consumption to lowest with clearly defined methodology
    • Capitalization plans to replace old equipment for new energy-efficient equipment
  • Interview questions to ask
    • Understanding of energy ratings of equipment
    • Relevant employees have a general understanding of how they, and their site’s activities and operations, can impact energy use and greenhouse gas emissions
  • Inspection - things to physically look for
    • Equipment used in the factory
    • Presence of data loggers to track energy use over time
    • Other energy sources not listed in energy record list

4. Has your facility set targets for improving energy use or GHG emissions? If yes, select all sources of energy for which your facility has set an energy or GHG reduction target.

  • Source
  • What is your target for change in Megajoules (MJ) use from this source? (Enter a negative percentage for a reduction target, and a positive percentage for an increase target.)
  • Enter the target year
  • Is this a normalized or absolute target?
  • Describe the measures planned to achieve this target (how you will achieve the target)

 Suggested upload: consolidated targets for different energy sources

 You will receive full points if you set targets for energy sources that make up 80% or more of your total energy use.  

You will receive partial points if you set targets for energy sources that make up 50-79% or more of your total energy use. This is to reward you for aiming to improve your most significant sources of energy use which will maximize environmental impact.

Please Note: Full or partial points are automatically calculated based on which sources you report having an improvement target for.

Make sure to enter a negative percentage for a reduction target (e.g. -5 for a 5% reduction), and a positive percentage for an increased usage target (e.g. 5 for a 5% increase in usage).

What is the intent of the question?

For you to have completed at least one energy reduction target for your facility.

 Sustainable companies continually work towards minimizing their environmental impacts.  Now that you know how much energy your facility uses (your “baseline”), and your greatest drivers of energy use, you are ready to set targets to reduce your energy use.  

Facilities are encouraged to set a long term target (3-5 years). Once set, progress should be reviewed at least quarterly to ensure adjustments are made as needed to stay on track to realize success. 

Technical Guidance:

A target can use absolute or normalized metrics to drive quantifiable improvements by a set date compared to the baseline. For Higg FEM, reduction targets may be normalized to the production volume unit (selected in Site Info section: Production volume unit). A normalized target shows you when progress is real, rather than being a result of business changes such as reductions in production. An example of a normalized target is KWh of energy used for the production of one kilogram of sellable product (kWh/kg).

 A formal target here refers to a quantified performance requirement of the site’s annual energy use of a particular energy source. A formal target must:

  • include a definite start date (i.e., "baseline") of target,
  • include an end date of the target, meaning the intended completion of the required reductions;
  • the measurement unit,
  • the baseline consumption (i.e. m3/kg of production at 2010 baseline)
  • include an exact reduction quantity, expressed as a number (e.g. reduce by 1 million kWh) or a percentage (e.g. reduce by 5%).
  • be relevant to reducing the site’s energy use (e.g. focuses on the most significant energy uses at the site)

How this will be verified:

Full points

  • Documentation required
    • Documentation of the target(s)
    • How the target(s) was calculated into a percent
    • Target communicated to the relevant employees and linked to the major energy usage of the facility identified in EN2.1.
    • Communication methods may include: Meeting, bulletin board posting, newsletter release, any other form of written communication to employees which are involved with the tasks as they relate to energy usage in the facility.
  • Interview questions to ask
    • Management actively promotes or endorses proactive energy conservation
    • Management is driving continuous improvement and reviewing on-site energy reduction and/or emission targets on an annual basis
    • Energy consumption and greenhouse gas emissions data is made available to relevant internal and/or external stakeholders in order to drive accountability for achieving targets
  • Partial Points
    • Same requirements as for "Yes" answer but for sources (or one source) totaling 79% or less of energy use (this data is found in the % contribution calculation in question 1) 

5. Does your facility have an implementation plan to improve energy use and/or GHG Emissions?

Upload a copy of the plan

Improvements may be made by reducing energy use or improving GHG emissions by replacing existing energy sources with renewable sources.

Answer Yes if you have an implementation plan in place that demonstrates you are taking action to achieve your targeted reductions.

Answer Partial Yes if you have a plan but have not started on all action items.

You may download a sample implementation plan here

What is the intent of the question?

The intent is for your facility to create an action plan for reducing energy use and/or GHG emissions prioritizing by the highest energy consuming processes identified in question 3. 

Target-setting is an important step in systematically managing energy use, but your site must take action to make reductions. Having an implementation plan demonstrates the action you are taking to achieve your targeted reductions. Some facilities may have an implementation plan without having set targets.

Technical Guidance:

This question is identifying how the facility supports its target with clear actions. This is an opportunity to document all business processes for energy reduction projects planned or happening at the facility. 

Steps for action should include:

  1. Identify energy saving opportunities through internal assessment by qualified personnel or third-party energy assessment
  2. Evaluate energy saving alternatives and calculate return on investment
  3. Approve funds/budget for chosen solution
  4. Implement the solution and realize reductions
  5. Conduct regular review on the action plan to check progress

How to create an implementation plan?

Management commitment and employee awareness and participation are needed to ensure improvement opportunities can be identified, solutions can be proposed, and changes can be made using capital or expense dollars if necessary, to successfully implement proposed solutions.  Often this can involve third party consultation, literature and technology research, design firms, and pilot testing among many other potential paths toward installation of solutions.  All activity related to meeting targets should be part of an implementation plan to ensure organized and coordinated progress steps take place from the start.

How to report Energy Recovery?

Energy recovery (or reusing waste heat) is a practice or action that reduces the need for energy that you’ve already consumed. If you practice energy recovery, please list it in your implementation plan to ensure your efficiency efforts are called out.

How to reduce GHG Emissions?

In addition to reporting energy efficiency actions, you can also report actions which contribute to GHG reduction. For example, if your facility has switched to lower carbon energy sources or has taken other measures to reduce GHG emissions besides reducing energy use, you can also report in your action plan.

Where to go for more info:

How this will be verified:
Yes

  • Documentation required
    • Energy reduction plan listing specific projects, target reductions, dates, and progress that covers 80% or more of total energy use and/or
    • Energy audit or assessment done by a qualified energy auditor (internal or external) identifying energy reduction opportunities and implementation dates. A qualified energy auditor should be trained / experienced with the ISO 50002:2014 standard related to Energy auditing.
  • Interview observations
    • Management can articulate the plan including projects being implemented, their completion status, and their associated benefits
  • Inspection - things to physically look for
    • Projects identified in the plan that are completed or in progress

Partial Yes

  • Same requirements as for "Yes" answer but for sources (or one source) totaling 50-79% of total energy use

6. Has your facility improved energy consumption compared with its baseline? If yes, select all sources of energy that have been improved.

  • Source
  • Select baseline year
  • Indicate your facility’s change in energy use from this source (quantity and unit of measure)
  • Describe the strategies used to achieve this improvement

Suggested Upload: Energy tracking reports showing reductions for energy sources from last calendar year. Uploading utility bills is NOT required, however they should be available for the verifier to review at the time of verification.  

You will receive full points if you made reductions in the last calendar year for energy sources that make up 80% or more of your total energy use.

You will receive partial points if you made reductions in the last calendar year for energy sources that make up 50-79% or more of your total energy use. This is to reward you for reducing your greatest sources of energy use which will maximize environmental impact. 

Please select No as your answer option for that source if you have no reductions in the last calendar year or are unable to state what your reductions are for a source.

What is the intent of the question?

Taking action to reduce impacts on site is the primary important goal for this assessment.

Sustainability is a journey of continuous improvement.  Success is the result of extensive work involved in tracking, setting targets, and performing to implementation plans to meet targets.  This question provides an opportunity to display energy conservation success for the most recent year.  By tracking success over the reporting year, a facility proves through results the commitment made towards sustainability.   

Technical Guidance:

It is recommended that you show normalized reductions such as “electricity used per fabric meter was reduced by 2% in 2018.” This is because normalized metrics show real improvement rather than reductions from business changes such as reduced production. If you selected a normalized reduction, this will be auto calculated using the production unit from the Site Information section (Production Volume).

NOTE: This is NOT scoring the actual % of improvement because a facility may be working on the last 5-10% of energy efficiency which is hard to make up. We don't want to falsely reward beginners and give fewer points to leaders

How this will be verified:

Full Points

  • Documentation required
    • Energy tracking reports and consumption records showing reductions for energy sources that make up more than 80% of your total energy use
    • Evidence of new equipment purchases or efficiency improvements that demonstrate that energy reductions weren't made solely from a decline in production, or number of employees, or change in processes.
  • Interview observations
    • Management are proactively driving continuous improvement reviewing energy consumption reduction targets on an annual basis?
  • Inspection - things to physically look for
    • Progress against the components of the project plan (e.g. lighting or equipment replacement)
    • Rebates received from energy efficiency projects (if applicable)
    • Awards or certificates for energy efficiency or renewable energy achievements (e.g. green building certifications, Energy Star certification, etc.) 

Partial Points

  • Same requirements as for "yes" above but for energy sources (or one source) that make up less than 79% of your total energy use

  

Energy - Level 3

7. Were your facility’s annual Scope 3 greenhouse gas (GHG) emissions calculated in 2018?

Report your facility's 2018 Scope 3 GHG emissions in co2e here

Describe your Scope 3 calculation here

Suggested Upload: documentation on calculation of scope 3 GHG emissions in the last calendar year

This question is not scored. The GHG Protocol categorizes emissions into three broad scopes:

  • Scope 1: All direct GHG emissions. (this was covered in Level 1 energy tracking)
  • Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam. (this was covered in Level 1 energy tracking)
  • Scope 3: 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. (Source: https://ghgprotocol.org )

Calculating Scope 3 emissions for your facility or business is an advanced practice that can be noted in this question. However, this question is unscored because Higg only gives Level 3 points for taking action that improves environmental impact directly. Calculating Scope 3 emissions can provide useful insights and/or support reporting, but it does not guarantee any environmental improvement has occurred.

What is the intent of the question?

Calculating Scope 3 emissions for factory operations is particularly important for manufacturing industry because it provides insights on the environmental impact associated with the manufacturing and consumption of the product, both upstream and downstream operations. All upstream and downstream business activities (except in-house manufacturing) could be captured to calculate the Scope 3 footprint. 

Technical Guidance:

GHG Protocol Corporate Value Chain (Scope 3) Standard allows factory to assess the emission impact of its entire value chain. The Scope 3 standard has further subdivided Scope 3 sources into 15 main categories. In order to identify key Scope 3 emission sources, you can estimate the emissions with GHG Protocol Scope 3 Evaluator (http://www.ghgprotocol.org/scope-3-evaluator)

Scope 3 boundaries: Focus is on the raw material suppliers and direct supply chain partners for finished goods.

How this will be verified:

Yes

  • Documentation required
    • Records of sources for calculating Scope 3 GHG emissions in the last calendar year
  • Interview questions to ask
    • Management understands the methodology for calculating Scope 3 GHG emissions
    • Emissions have been reported through the Carbon Disclosure Project or other external reporting (optional)
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