Global Compact International Yearbook 2017

5 STEPS TOWARD AN
EFFECTIVE CORPORATE
CLIMATE MANAGEMENT
STEP 1.
STEP 2.
STEP 3.
STEP 4.
STEP 5.
Setup of a GHG balance sheet
Introduction of a data and
process management system
Creation of a climate strategy
Controlling with key performance indicators
Communication
Source: DGCN
Throughout the different steps, companies should not only
consider their Scope 1 emissions (direct emissions from sources
a company owns or controls) and Scope 2 emissions (indirect
emissions from the generation of purchased energy that is
consumed by the company) but also their Scope 3 emissions
(indirect emissions that occur along the value chain). In most
sectors, the sum of a company’s Scope 3 emissions significantly
exceeds the sum of Scope 1 and 2 emissions. Hence, companies
should identify their hotspots (relevant Scope 3 categories)
and act accordingly.
In the following, the different steps of corporate climate action
are described in more detail.
Initial considerations before the start
Pursuing a structured approach to the management of climate
change impacts requires an adequate organizational structure
and a clear definition of responsibilities and processes. The
integration into the general business strategy and governance
structure should hereby be ensured. Different subsidiaries,
business divisions, and production sites need to be involved
in data collection, data management, strategy development,
and the implementation of adequate measures. It is recommendable
to define a climate manager who coordinates
corporate climate action, sets up the required structures,
and serves as an interface between the general management
and those employees and units involved across the company.
The design of a suitable climate governance depends on the
corporate structure. In any case, there need to be employees
in charge with data collection and data provision at the operational
level of production sites or products and services.
These should be complemented with managers at the level
of subsidiaries, business units, or production sites that aggregate
data and check the plausibility of results.
Development of greenhouse gas accounting
Solid accounting of GHG emissions is the basis for corporate
climate action and the development of a climate strategy.
A consistent and transparent calculation of the corporate
carbon footprint enables the identification of emission hotspots
along the value chain and allows for the tracking of
progress in reducing emissions. The GHG Protocol provides
useful guidance in the process of defining system boundaries,
identifying emission hotspots, gathering activity data, and
calculating emissions. The accounting and reporting of Scope
1 and 2 emissions serve hereby as minimum requirements.
Based on a first rough estimation of emission hotspots and
correspondent risks and opportunities, a company should
also take into account relevant categories of Scope 3 emissions.
Generally, GHG emissions are calculated by multiplying
activity data such as energy and fuel consumption
with corresponding emission factors and then provided in
commercial or publicly available databases. The calculation
of Scope 3 emissions can be more challenging. The technical
guidance from the GHG Protocol has proved to be helpful
in this regard.
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Global Compact International Yearbook 2017