By Vivek Adhia - December 20, 2013
This article was originally posted on indiaghgp.org.
Key environmental, sustainability and operational representatives from fourteen leading Indian businesses including Mahindra & Mahindra, Jet Airways, Oil & Natural Gas Corporation, Mahindra Sanyo Special Steel Pvt. Ltd, Ambuja Cements, Shree Cements, GAIL, Godrej & Boyce, Secure Meters, Jain Irrigation, Pratibha Syntex etc. participated in the first ever GHG Clinic, i.e. capacity building and technical workshop on developing corporate inventories based on the GHG Protocol Corporate Standard and the Corporate Value Chain Standard.
One of the key features of the GHG Clinic was the presence of key faculty from WRI, TERI and CII including Pankaj Bhatia, the Lead Author and Director of the GHG Protocol Suite of Standards. The workshop began with an overview of the basic concepts of setting organizational and operational boundaries, with highly interactive exercises. The interactive format of the workshop highlighted several key issues on boundary setting and consolidation approaches like;
- Which of the consolidation approaches for defining organizational boundary is most relevant in the Indian context.. How do you address issues related to choosing the equity share approach when many privately held companies have complex cross-holding and management structures?
- Companies in India usually start with GHG Accounting for facilities (including major operations, emission scopes and gases).. How do you transition from a facility based inventory to a consolidated corporate inventory for a more centralized understanding of risks and opportunities.
- Why does the corporate standard advise not to recalcuate the base year in the case of organic growth or if the facility acquired did not exist in the base year.
- In 2011, NF3 was not included in the GHG Accounting during the base year, but now if the company has developed a deep understanding on how to account for them - should it be included in the inventory, and if yes; does the base year calculations change??
- Which scope should the company operations that undertake only packaging and branding (no manufacturing or post processing) should come under??
The interaction further developed into deeper engagement and understanding for other aspects of compiling inventory including activity data collection, compartive data evaluation for developing greater credibility, goal setting etc. The business representatives exclusively looked forward to the expertise on Scope 3 Accouting based on the Corporate Value Chain Standard wherein some of the queries relevant to the Indian context were highlighted as below;
- Certain sectors such as real estate, cement, iron & steel etc. have minor suppliers whereas those from the automotive and consumer sections have multiple layers effecting into a large magnitude of the supply chain. Accordingly, what would be the most prudent level of the supply chain to be engaged, i.e. will Tier 1 or top 3-4 suppliers suffice based on relevance and materiality.. is there a specific guidance on the same prescribed by the standard
- In a company the transportation vehicles are not owned (no financial control) but there is complete operational control over all the requirements (like fuel type, vehicle to be used etc, decision on retro-fitting and maintenance of vehicles etc). Accordingly the control approach selected would be imperative in the overall inventory that will be reported. In such a scenario, what could be the ideal approach to be followed.
- In a large business conglomerate, one of the manufacturing unit requests transportation service from a logistics company of the same business group. This means the emissions when rolled up to the business conglomerate level i.e. manufacturing unit (Scope 3) and the logistics unit (Scope 1) would result in double counting?? What could be the approach to be selected here for roll-up and reporting for a group level inventory..
- A company sells fabrics as well as apparels. In case of the former there is no awareness of the final usage of the product, so the selection of emission factors and categorization under the Scope 3 standard needs a very closer look (Scope 3 - processing of sold products). What should a company look at while computing these emissions??
- If in a textile company, approximately 60% of the emissions from apparels are in their use phase. If the company undertakes some changes in the manufacturing process that makes garments require less resources (e.g. less washing/less ironing), then would it be ok to report under ‘optional’ instead of ‘mandatory’ requirements under this Scope 3 category of computing use phase emissions??
- How do you acccount for emissions from inter-business transportation of a corporate group without double counting??
- In a case of a firm which leases a building for official requirements. This lease includes a fixed monthly rental inclusive of the electric bill. Will the emissions from electricity consumed fall under scope 2 or scope 3?
Our recommendations for some of these queries would be specifically conveyed to the participants as well as snaphots would be uploaded on the India GHG Program website for the broader dissemination. It was also interesting to note the various drivers that companies refer to while setting internal & voluntary goals. Some of them include national / international industry benchmarks, historic performances, regulatory and policy requirements, market scenarios and consumer perceptions, science based recommendations etc. The program would also come-up with specific sessions on goal setting and relevance shortly. Do keep tuned in, onto the upcoming events section of the website for additional details.
The India GHG Program, once again acknowledges the support of its partners WRI India, TERI & CII as well as its funding partners Shakti Sustainable Energy Foundation, the German Federal Ministry of Environment, Nature Conservation and Nuclear Safety as well as the Pirojsha Godrej Foundation.