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Supplier Sustainability Index:

Getting Started

Ted Foxwww.sustain.biz

2/17/10

Brown and Wilmanns Environmental, LLC

Agenda

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The WM Supplier Sustainability IndexYour ChoicesGetting your company on boardThe what and why of carbon

footprintsSimple steps to building a carbon

footprintResources

Brown and Wilmanns Environmental, LLC

Supplier Sustainability Index

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15 questionsEnergy and climateMaterial efficiencyNatural resourcesPeople and community

These four groups are NOT unique to Walmart…they ARE the fundementals

Leveraging all four delivers bankable value

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Energy and Climate

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First three questions1 Have you measured your corporate

greenhouse gas emissions?2 Have you opted to report your greenhouse

gas emissions to the Carbon Disclosure Project (CDP)?

3 What is your total annual greenhouse gas emissions reported in the most recent year measured?

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Three Basic Options

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1. Ignore it

2. Simple Footprint and register as a ‘S&ME’

3. Complete footprint and register all Scopes 1-3

“If you can’t get out of it…GET INTO IT”

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First Things First (know what you don’t know)

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1. Get educated: CDP, online, books, classes etc.

2. Develop your elevator speech (engage your HQ)

3. Increase awareness and gain support4. Provide guidance and solutions5. Get help and get it done6. Stay engaged after it’s done…the value is in

the increased profits…the value to you is the education & deeper connection to retailers

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Some Terminology

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Greenhouse Gases (GHGs) are trace gases that control energy flows in the Earth's atmosphere by absorbing infra-red radiation.

Some GHGs occur naturally in the atmosphere, while others result from human activities. There are six GHGs in the Kyoto Protocol – carbon dioxide (CO2),

methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) sulphur hexafluoride (SF6).

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What is your Company Carbon Footprint?

A carbon footprint is "the total set of GHG (greenhouse gas) emissions caused directly and indirectly by your company

Activities with greenhouse gas emissions Process emissionsEnergy useTransport/logisticsBusiness travel, commuting, etc.

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Getting Started on Your Footprint

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Keep it simple– It’s as easy as 1, 2 and wait on 3…

Scope 1: focus on direct emissions from your facilities and vehicles

Scope 2: electricity and other energy sources purchased to power your facilities

Scope 3: all other business related activities that cause GHG’s. (business travel, commuters, shipping, etc.)

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Getting Help from the Inside

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Key internal resourcesAccounting can help get info off the

utility bills and set up tracking systemsFacilities may already track utility use;

they can also help identify direct emission sources and equipment

Engineering may be helpful with equipment characteristics

Fleet managers may help with fuel use and vehicle characterization

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Some Suggestions

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Track data in common metricMJ or kWh for electricity and fuels for heatingUse standard conversion factorsDocument everything!

Ask utilities and fuel vendorsStandard factors to convert MJ or kWh of

electricity, therms, cubic meters of natural gas, etc. to CO2e emissions

Provide historical data electronicallySet up systems to automate data

collection and trackingUse the GHG protocol www.ghgprotocol.org

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GHG Protocol

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Already built Excel spreadsheetsStraightforward when you have

information and data about your facilities’ equipment and vehicles fuel and electricity use

Gets complicated when:Lots of potential emission sourcesOwnership issuesLeases that incorporate utilities in rent

payments, etc.It provides means to ask for specific

information that is needed to create a credible footprint

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Example of Excel Tracking

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Energy

22,661,87120,863,30920,863,30919,784,173

16,036,00016,985,500

25,847,50023,843,00021,311,000

25,179,856

24,100,71923,381,295

23,021,58321,223,022

21,582,734

21,942,446

11,299,156 11,618,821

15,455,117

17,829,500

19,412,000

24,265,000

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Year

MJ Natural Gas

Electricity

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Going Beyond Your Facilities (Scope 3)

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Indirect Emissions—First stepsBusiness travel, employee commuting, etc.Inbound and outbound shipping by

common carrierRaw materials/products inbound to your

facilitiesProducts trans-shipped among your

facilitiesProducts outbound to your customers

Collect data, set up tracking systems, automate data collection and analysis

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Standard unit of measure

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Calculated as carbon dioxide equivalent (CO2e) emissions based on Global Warming Potential (GWP)Carbon dioxide (GWP 1)Methane (GWP 25)Nitrous oxide (GWP 298)HFCs (GWP 124-14,800)Perfluorocarbons (GWP 7,310 – 22,800)And more (CFCs, HFEs, etc.)

Typically reported as metric tons CO2e emissions

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Choosing Resources

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Supplier Education: low & no cost options CDP, online, DBB, 8th & Walton, Universities

Consultants (Carbon & Sustainable practices)Look for expertise in footprints, emission reduction

products/strategies and climate change. (know what you don’t know) RFP recommended

Carbon offset marketersThey sell offsets (shares of projects that result in

displacement of emissions) and typically have resources to generate carbon footprint

Footprint calculatorsOn-line calculators to generate carbon footprintMay use your data or may use estimates based on

facility type, size, number of employees, location, etc.

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Knowing what you know & don’t knowbefore you get help will:

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1.Expedite the process

2.Lower confusion

3.Increase accuracy

4.Lower costs

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Questions to Ask:External Resources

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Experience and expertiseWhich protocols do they follow?Can we just do Scope 1 and Scope 2?Can we choose which, if any, Scope 3

activities to measure?How can we minimize the cost?How can you teach us the basics?Can the carbon footprint be certified?Will the carbon footprint be accepted by

CDP?

•Get on the learning curve•Four areas of focus: Carbon, Waste, People, Profits•Learn to fish and eat for a lifetime

•Engage your HQ with your IQ•Take the lead•Leverage the need

•Get help•Know what you don’t know•Find resources that fit …RFP

•Stay involved•It’s good for your company•It’s good you

Recap

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& some more Terminology Base Year

"A historic datum (a specific year or an average over multiple years) against which a company’s emissions are tracked over time.”

Carbon Footprint The total set of greenhouse gas emissions caused by an individual or organization, event or product. It should be expressed in carbon dioxide equivalent (CO2e) Carbon Trust.

Emission Factor "A factor allowing GHG emissions to be estimated from a unit of available activity data (e.g. tonnes of fuel consumed, tonnes of product produced) and absolute GHG emissions.”

Life Cycle Analysis "Assessment of the sum of a product’s effects (e.g. GHG emissions) at each step in its life cycle, including resource extraction, production, use and waste disposal.”

Scope 1

Direct GHG emissions occur from sources that are owned or controlled by the company, for example,emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.; emissions from chemical production in owned or controlled process equipment.

Scope 2

Scope 2 accounts for GHG emissions from the generation of purchased electricity2 consumed by the company. Purchased electricity is defined as electricity that is purchased or otherwise brought into the organizational boundary of the company.

Scope 3

Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions. Scope 3 emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by the company.

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Resources

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http://www.ted.com/talks/lang/eng/ray_anderson_on_the_business_logic_of_sustainability.htmlhttp://www.epa.gov/climatechange/emissions/

ind_calculator.htmlhttp://stage.cdproject.net/https://webadmin.cdproject.net/en-US/Respond/

Documents/CDP_2009_Definitions.pdfhttp://www.ghgprotocol.orghttp://hara.com/http://www.planetmetrics.comhttp://www.sustain.bizhttp://www.bw-environmental.comhttp://www.8thandwalton.com/videos/ (coming

soon)