This is a high level overview for the first public draft of GHG Protocol Supply Chain and Product Standards as of Dec 2009.

1. 1 Greenhouse Gas Protocol Product/Supply Chain Standards Overview on P&G Asia Product Safety and Regulatory Affairs Symposium RP Song 16 November 2009 1

3. Draft Scope 3 Standard Overview

4. Draft Product Standard Overview

5. Next Steps for Standards Development2

7. A multi-stakeholder partnership of businesses, NGOs, governments and others convened by WRI and WBCSD

10. 6 New GHG Protocol Standards Scope 3 (Corporate Value Chain) Standard Under develop-ment Product Life Cycle Standard 6

11. 7 Process Structure WRI/WBCSD Secretariat Steering Committee (25 members) Product Technical Working Groups ( 100+ members) Scope 3 Technical Working Groups ( 60+ members) Stakeholder Advisory Group (1,000+) Product Standard Scope 3 Standard 7

12. 8 Scope 3 Accounting & Reporting Standard 8

14. Scope 2 emissions = Indirect emissions from use of electricity, steam, heating and cooling

15. Scope 3 emissions = All other indirect emissions upstream & downstream of a company, e.g. production of purchased goods & services; third-party transportation; use and disposal of a company’s products; etc.9

16. 10 Scopes Across the Value Chain 10

18. Should optionally report scope 3 emissions

19. Shall report all scope 1 and 2 emissions

20. Shall report scope 3 emissions (following the requirements/guidance in this standard)11

22. Performance tracking, includingsetting a baseline, setting GHG reduction goals, and tracking progress over time

23. Engaging partners in the value chain to expand GHG accountability, transparency and management throughout the value chain

24. Public reporting of GHG emissions to meet the decision-making needs of stakeholders (e.g., policy-makers, investors, purchasers, customers, suppliers, employees, NGOs, etc.), as well as participation in corporate-level GHG reporting programs and registries12

26. These include the emissions of your suppliers

27. Downstream emissions are the emissions that occur in the life cycle of sold goods and services subsequent to sale by the reporting company

28. These include the emissions of your customers

29. Other scope 3 emissions: employee commuting13

30. 14 14

32. The use phase emissions of select product type

33. All scope 1 and scope 2 emissions, as required by the GHG Protocol Corporate Standard.15

34. 16 Collecting Data As a general rule, companies should apply the following hierarchy in collecting data: Primary data Secondary data Extrapolated data Proxy data

35. Collecting Data 1b. Can primary data be combined with one or more of the other data types of sufficient quality? 2b. Can the secondary data be combined with the use of extrapolated data or proxy data to obtain sufficient data quality? Decision Tree 3. Are extrapolated data or proxy data available of sufficient quality? 2. Is secondary data available of sufficient quality? 1a. Is the value chain partner able and willing to supply primary data of sufficient quality? N N N N Y Y Y Y Y N 5. Calculate, roll-up and report emissions 6. Report data gap

37. Emissions data for all six Kyoto Protocol GHGs (CO2, CH4, N2O, HFCs, PFCs, SF6)

38. Scope 3 emissions reported separately for each scope 3 category included in the inventory

39. A list of scope 3 activities included in the report

40. A list of excluded scope 3 emission sources with justification of their exclusion

41. Emissions reported separately for sources calculated using primary (company-specific) data and sources calculated using secondary (industry average) data

42. Methodologies used to calculate or measure emissions

43. A description of the uncertainties of reported emissions data

44. A summary of data types used to calculate the inventory (e.g., the percentages of scope 3 emissions calculated using primary data, secondary data, and extrapolated/proxy data) 18 Reporting

45. 19

46. 20 Product Life Cycle Accounting & Reporting Standard 20

48. Implementingthe standard may support additional business goals:

49. Identification of GHG reduction opportunities in the supply chain of a product

50. Performance tracking

51. Supply chain engagement and improved disclosure practices

52. Product differentiationGoal & Scope

53. Goal and Scope The standard is sufficiently flexible to support GHG quantification and reporting for many product types Who should use this standard? Companies and organizations of all sizes and economic sectors 22 Goal & Scope

54. Goal and Scope This standard does not fully support product comparison Valid product comparison, comparative assertion, and labeling requires a greater degree of prescriptiveness than is provided in this standard. The standard will include guidance on how programs, product category rule (PCR) developers and organizations can specify additional constraints so that valid product comparisons and claims can be made 23 Goal & Scope

56. Including all stages of the life cycle, from cradle to grave:24

58. Key Requirements: Setting the Boundary Setting the Boundary Processes that are attributable to the function of the product shallbe included in the boundary of the product system. These processes are directly connected over the product’s life cycle by material or energy flows, from extraction and pre-processing of product components through to the product’s end-of-life These processes are referred to as foreground processes throughout this standard Capital goods shall be included in the product system if deemed significant for the studied product or product sector Significance can be proven for capital goods using a qualitative or quantitative test. Companies shall conduct a cradle-to-grave assessment for all final products. Companies may conduct a cradle-to-gate assessment for intermediate products when the eventual fate of a product is unknown. 26

59. 27 Setting the Boundary Life Cycle Stages

60. Key Requirements: Collecting Data Primary data shall be collected for all processes under the control (as defined by the GHG Protocol Corporate Standard) of the company undertaking the product inventory For all other processes, primary or secondary data of the highest practical quality shall be collected Data gaps shall be filled using extrapolation or proxy data 28 Collecting Data

61. Key Requirements: Reporting A company shallpublicly disclose a GHG inventory report This report is divided into a summary and detailed report to address the needs of different audiences: The general audience (summary) The audience familiar with GHG inventory accounting (detailed) The summary and detailed reports shall be disclosed together 29 Reporting

62. Key Requirements: Summary Report 30 Reporting Summary Template

63. Key Requirements: Summary Report 31 Reporting Summary Template

64. 32 Next Steps 32

65. 33 Timeline 33

66. 34 Thank You Summary and Full Draft of the Standards available at http://www.ghgprotocol.org/standards/product-and-supply-chain-standard Contact Information: China & Asia: Ranping Song, Associate Tel：86-10-59002566 ext 29 Email：rsong@wri.org Global & U.S.: Holly Lahd, Research Assistant Email: hlahd@wri.org. 34