Put Your Numbers to the Test: Data Quality in
Put Your Numbers to the Test: Data Quality in Sustainability Measurements and Communication
About Us
Kathy Tejano Rhoads Principal Consultant
Summer Broeckx-Smith Data Analyst & Head of CDP Services
2
Guest Speakers
Shreya Sonar
Byron Thayer
Andy Cummings
3
Agenda 1. Sustainability performance 2. Key data characteristics 3. Insights from guest speakers 4. CEDA database 5. Key takeaways
6. Q&A
4
1. Sustainability performance
5
Corporate Performance
Number of Respondents
CDP Supply Chain Questionnaire 3,396 2868 2415 1864 1000
715
2009
Number of G250 Companies
4,300
4005
2010
2011
2012
2013
2014
Climate Targets 73
2015
2016
141 86
17
2014
2015
2016
2017
6
Reporting Gap 2015 Corporate Emissions Reporting 200
Number of G250 Companies
180 160
172 162
140 120 100
103
80 60 40 20 14 0 Scope 1
Scope 2
Scope 3 (Upstream)
Scope 3 (Downstream)
7
Knowing Your Sustainability Impacts
1 Operational 4
Supply Chain
8
Benefits Of Closing The Gap
Enhance Brand Value
Reduce Cost & Improve Efficiency
Innovation
Respond to Investor Inquiries
9
POLL QUESTION: Has your company ever performed a sustainability impact analysis? If so, what was it used for? Select one: ▪ ▪ ▪ ▪ ▪
Enhance brand value Identify areas to reduce environmental impacts Identify supply chain related risks and opportunities Respond to investor ESG inquiries All of the above
10
Sustainability Impact Measurements
+ Methodology Data
11
2. Key data characteristics
12
Data Characteristics Checklist Base year and frequency of updates
13
Data Characteristics Checklist Base year and frequency of updates Consistency
14
Data Characteristics Checklist Base year and frequency of updates Consistency Completeness in scope and breadth
15
Data Characteristics Checklist Base year and frequency of updates Consistency Completeness in scope and breadth Transparency of methodology
16
Data Characteristics Checklist Base year and frequency of updates Consistency Completeness in scope and breadth Transparency of methodology Accessibility
17
Data Characteristics Checklist Base year and frequency of updates Consistency Completeness in scope and breadth Transparency of methodology Accessibility
Uncertainty
18
Uncertainty • How good is the data? • Would you rather be roughly right or precisely wrong?
19
Overcoming Data Limitations Iterative Analysis
1. Identify “hot spots”
2. Refine the results targeting the hot spots 3. Repeat until the data quality goal is met 20
Understanding Data Trade Offs Keep in mind: • Impacts of analysis • Use of financial resources • Future repetition of reporting • External inquiries regarding results
21
3. Insights from guest speakers
22
Guest Speaker: Shreya Sonar Shreya Sonar Sustainability Analyst
23
What is RefScale?
RefScale & Impact Tool: RefScale • For each Reformation product, we use RefScale to measure Farm to End-of-Life impacts • Benchmark with conventional clothing
Benefits • External: Shared with customers on web • Internal: Raw material and process selection
RefScale & Impact Data Quality • • • • • •
Primary data Peer reviewed journals Published books PDFs O Ecotextiles Verification via 3rd party consulting firm
RefScale & Impact Challenges • • • •
Cashmere and alpaca data System boundaries Quantifying certifications Wet processing visibility
Assumptions • 52 washes/garment cycle • Deadstock fabrics • Conventional clothing
Guest Speaker: Byron Thayer Byron Thayer Manager – Sustainability Performance & Reporting
28
LS&Co. uses iterative approach to data gathering • We completed two LCAs prior to our Scope 3 climate change estimate
LCA #1 (2007)
LCA #2 (2015)
Scope 3 (2017)
• 1 Product • US only
• 3 Products • Global
• All products • Non-product categories
29
In 1st LCA, ‘hot spots’ drove us to improve data • For a pair of 501 jeans, consumer use (laundry) has the greatest impact. • But we only looked at US consumers’ laundry habits… Climate Change Impacts by Phase End of Life 3%
Fiber 9%
Fabric Production 27%
Consumer Use 37%
Cut, Sew, Finish 8% Sundries & Packaging 5%
Transport, Logistics, Retail 11%
30
In 2nd LCA, we further explored our hot spots • We compared regional consumer use habits, not just US
70
Lifetime Consumer Use Non-Renewable Energy (kwh)
60 50 40 30
20 10 0
Americas
Europe
Asia
Washing every 10 times a product is worn instead of every 2 times reduces global warming impact by 80% 31
In 2nd LCA, focused on fabric assembly impact of denim vs. khaki • Fabric assembly of 501 jeans is 50% more impactful than Dockers khakis
kg of CO2e
FIBER
FABRIC ASSEMBLY
CUT, SEW, FINISH
SUNDRIES & PACKAGING
TRANSPORT LOGISTICS RETAIL
CONSUMER USE
END OF LIFE
TOTAL
Levi’s 501
2.9
9.0
2.6
1.7
3.8
12.5
0.9
33.4
Dockers Khakis
4.9
5.9
2.8
0.2
3.2
13.3
0.9
31.3
32
With Scope 3, focused on missing data • Expanded view to all products, including leather goods. • Addressed 11 different areas of Scope 3, including non-product sources (commuting, capital goods, business travel, etc) – (Ultimately, product impact far greater than everything else)
• LS&Co’s annual carbon footprint is 5 million metric tons CO2e. Equivalent to: Emissions generated by the state of Vermont
1MM more than San Francisco
33
Avoid paralysis by analysis—Just get started! • But we simultaneously improved data precision AND created programs to reduce impact.
• At first, we focused on accuracy over precision. – Know hot spots and make 100% sure that in the ballpark (accuracy), then later sharpen numbers to multiple decimal points (precision)
34
LS&Co. is about to start third round of GHG targets • We set first round of targets in 2007 (after 1st LCA) • Likely meet our second round of targets early – (25% absolute reduction in scopes 1 + 2 by 2020 vs. 2007 baseline)
• CEO recently committed to setting third round: Science-Based Targets + Scope 3 targets.
35
We are addressing cotton and consumer impact, even with imperfect data • We are founding member of Better Cotton Initiative. • Traceability is challenging.
• We launched and ‘Care Tag for the Planet’ and consumer education campaign to reduce laundry impact. • But we can’t measure impact easily.
36
Guest Speaker: Andy Cummings Andy Cummings Account Manager – Supply Chain
37
{{
We want to see a thriving economy that works for people and planet in the long term. To do this we focus investors, companies and cities on taking urgent action to build a truly sustainable economy by measuring and understanding their environmental impact.
CDP’s Mission
www.cdp.net | @CDP
{{
CDP model
www.cdp.net | @CDP
Importance of Data Quality { Setting a science-based target { Meeting your customers sustainability goals
{ Understanding ‘hot spots’ in your value chain { Reducing scope 3 emissions { Tracking year-on-year progress
www.cdp.net | @CDP
Case study: Dell Technology Dell’s guidelines for suppliers: { { { { {
Report GHG emissions via CDP (minimum scope 1 and 2, scope 3 encouraged) Set public goals to reduce operational GHG impacts Tier 1 suppliers to establish GHG management and reporting requirements for their suppliers Report on water via CDP Water Publish a GRI-based sustainability report
In 2016, Dell achieved an industry-leading response rate of 95.4 percent, and in aggregate, their suppliers reduced 6.1M metric tons of CO2e in the last reporting year, equal to $606M in savings related to emissions reductions.
www.cdp.net | @CDP
Dell publicly states:
{{ Failure to meet these requirements can impact your supplier ranking and potentially diminish your ability to compete for Dell's business.
{{
More repeat participants reducing emissions
www.cdp.net | @CDP
4. Comprehensive Environmental Data Archive (CEDA) database
43
CEDA 380+ sectors
2700+ exchanges
44
VitalMetrics CDP Scope 3 Tool
45
Data Characteristics Base year and frequency of updates Consistency Completeness in scope and breadth Transparency of methodology Accessibility Uncertainty
46
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual Consistency
updates
Completeness in scope and breadth Transparency of methodology Accessibility Uncertainty
47
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 Completeness in scope and breadth Transparency of methodology Accessibility Uncertainty
48
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 ✓ Completeness in scope and breadth 380+ sectors, 2700+ Transparency of methodology
exchanges
Accessibility Uncertainty
49
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 ✓ Completeness in scope and breadth 380+ sectors, 2700+
✓
exchanges Transparency of methodology Published in a peer reviewed article in 2005
Accessibility Uncertainty
50
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 ✓ Completeness in scope and breadth 380+ sectors, 2700+
✓
✓
exchanges Transparency of methodology Published in a peer reviewed article in 2005 Accessibility Formatted in Excel, annual license available
Uncertainty
51
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 ✓ Completeness in scope and breadth 380+ sectors, 2700+
✓
✓ ✓
exchanges Transparency of methodology Published in a peer reviewed article in 2005 Accessibility Formatted in Excel, annual license available Uncertainty Geometric standard deviation
52
Leveraging CEDA • • • •
Corporate greenhouse gas accounts (e.g., CDP) Investment portfolio footprints Sustainable spend analysis Product carbon footprints
53
Sustainability Spend Analysis
Note: This table has been truncated.
54
Product Carbon Footprints
Thousand metric tons CO2e
90
80
Sweetnat 2%
70
Oils 3%
Chocolate 3%
60
Others 15%
Flour 36%
Dairy Products 5% 50
Soy 8%
40
Fiber Inulin 11%
30
Oats 18%
20
10
0
Ingredients
Carton Packaging
Electricity
Corrugate Packaging
Natural Gas
Kashi Durable Goods
Others
55
5. Key takeaways
56
Take Home Messages • Quality data is the foundation of sustainability analysis • Consider data tradeoffs when measuring your organization's sustainability performance • CEDA can be leveraged to achieve robust environmental impact analyses • Corporate greenhouse gas accounts (e.g., CDP) • Investment portfolio footprints • Sustainable spend analysis
• Product carbon footprints 57
QUESTIONS? • Submit them through the chat box
If you have any further questions, please reach out to us at: [email protected] or at www.vitalmetricsgroup.com
58
About Us
Kathy Tejano Rhoads Principal Consultant
Summer Broeckx-Smith Data Analyst & Head of CDP Services
2
Guest Speakers
Shreya Sonar
Byron Thayer
Andy Cummings
3
Agenda 1. Sustainability performance 2. Key data characteristics 3. Insights from guest speakers 4. CEDA database 5. Key takeaways
6. Q&A
4
1. Sustainability performance
5
Corporate Performance
Number of Respondents
CDP Supply Chain Questionnaire 3,396 2868 2415 1864 1000
715
2009
Number of G250 Companies
4,300
4005
2010
2011
2012
2013
2014
Climate Targets 73
2015
2016
141 86
17
2014
2015
2016
2017
6
Reporting Gap 2015 Corporate Emissions Reporting 200
Number of G250 Companies
180 160
172 162
140 120 100
103
80 60 40 20 14 0 Scope 1
Scope 2
Scope 3 (Upstream)
Scope 3 (Downstream)
7
Knowing Your Sustainability Impacts
1 Operational 4
Supply Chain
8
Benefits Of Closing The Gap
Enhance Brand Value
Reduce Cost & Improve Efficiency
Innovation
Respond to Investor Inquiries
9
POLL QUESTION: Has your company ever performed a sustainability impact analysis? If so, what was it used for? Select one: ▪ ▪ ▪ ▪ ▪
Enhance brand value Identify areas to reduce environmental impacts Identify supply chain related risks and opportunities Respond to investor ESG inquiries All of the above
10
Sustainability Impact Measurements
+ Methodology Data
11
2. Key data characteristics
12
Data Characteristics Checklist Base year and frequency of updates
13
Data Characteristics Checklist Base year and frequency of updates Consistency
14
Data Characteristics Checklist Base year and frequency of updates Consistency Completeness in scope and breadth
15
Data Characteristics Checklist Base year and frequency of updates Consistency Completeness in scope and breadth Transparency of methodology
16
Data Characteristics Checklist Base year and frequency of updates Consistency Completeness in scope and breadth Transparency of methodology Accessibility
17
Data Characteristics Checklist Base year and frequency of updates Consistency Completeness in scope and breadth Transparency of methodology Accessibility
Uncertainty
18
Uncertainty • How good is the data? • Would you rather be roughly right or precisely wrong?
19
Overcoming Data Limitations Iterative Analysis
1. Identify “hot spots”
2. Refine the results targeting the hot spots 3. Repeat until the data quality goal is met 20
Understanding Data Trade Offs Keep in mind: • Impacts of analysis • Use of financial resources • Future repetition of reporting • External inquiries regarding results
21
3. Insights from guest speakers
22
Guest Speaker: Shreya Sonar Shreya Sonar Sustainability Analyst
23
What is RefScale?
RefScale & Impact Tool: RefScale • For each Reformation product, we use RefScale to measure Farm to End-of-Life impacts • Benchmark with conventional clothing
Benefits • External: Shared with customers on web • Internal: Raw material and process selection
RefScale & Impact Data Quality • • • • • •
Primary data Peer reviewed journals Published books PDFs O Ecotextiles Verification via 3rd party consulting firm
RefScale & Impact Challenges • • • •
Cashmere and alpaca data System boundaries Quantifying certifications Wet processing visibility
Assumptions • 52 washes/garment cycle • Deadstock fabrics • Conventional clothing
Guest Speaker: Byron Thayer Byron Thayer Manager – Sustainability Performance & Reporting
28
LS&Co. uses iterative approach to data gathering • We completed two LCAs prior to our Scope 3 climate change estimate
LCA #1 (2007)
LCA #2 (2015)
Scope 3 (2017)
• 1 Product • US only
• 3 Products • Global
• All products • Non-product categories
29
In 1st LCA, ‘hot spots’ drove us to improve data • For a pair of 501 jeans, consumer use (laundry) has the greatest impact. • But we only looked at US consumers’ laundry habits… Climate Change Impacts by Phase End of Life 3%
Fiber 9%
Fabric Production 27%
Consumer Use 37%
Cut, Sew, Finish 8% Sundries & Packaging 5%
Transport, Logistics, Retail 11%
30
In 2nd LCA, we further explored our hot spots • We compared regional consumer use habits, not just US
70
Lifetime Consumer Use Non-Renewable Energy (kwh)
60 50 40 30
20 10 0
Americas
Europe
Asia
Washing every 10 times a product is worn instead of every 2 times reduces global warming impact by 80% 31
In 2nd LCA, focused on fabric assembly impact of denim vs. khaki • Fabric assembly of 501 jeans is 50% more impactful than Dockers khakis
kg of CO2e
FIBER
FABRIC ASSEMBLY
CUT, SEW, FINISH
SUNDRIES & PACKAGING
TRANSPORT LOGISTICS RETAIL
CONSUMER USE
END OF LIFE
TOTAL
Levi’s 501
2.9
9.0
2.6
1.7
3.8
12.5
0.9
33.4
Dockers Khakis
4.9
5.9
2.8
0.2
3.2
13.3
0.9
31.3
32
With Scope 3, focused on missing data • Expanded view to all products, including leather goods. • Addressed 11 different areas of Scope 3, including non-product sources (commuting, capital goods, business travel, etc) – (Ultimately, product impact far greater than everything else)
• LS&Co’s annual carbon footprint is 5 million metric tons CO2e. Equivalent to: Emissions generated by the state of Vermont
1MM more than San Francisco
33
Avoid paralysis by analysis—Just get started! • But we simultaneously improved data precision AND created programs to reduce impact.
• At first, we focused on accuracy over precision. – Know hot spots and make 100% sure that in the ballpark (accuracy), then later sharpen numbers to multiple decimal points (precision)
34
LS&Co. is about to start third round of GHG targets • We set first round of targets in 2007 (after 1st LCA) • Likely meet our second round of targets early – (25% absolute reduction in scopes 1 + 2 by 2020 vs. 2007 baseline)
• CEO recently committed to setting third round: Science-Based Targets + Scope 3 targets.
35
We are addressing cotton and consumer impact, even with imperfect data • We are founding member of Better Cotton Initiative. • Traceability is challenging.
• We launched and ‘Care Tag for the Planet’ and consumer education campaign to reduce laundry impact. • But we can’t measure impact easily.
36
Guest Speaker: Andy Cummings Andy Cummings Account Manager – Supply Chain
37
{{
We want to see a thriving economy that works for people and planet in the long term. To do this we focus investors, companies and cities on taking urgent action to build a truly sustainable economy by measuring and understanding their environmental impact.
CDP’s Mission
www.cdp.net | @CDP
{{
CDP model
www.cdp.net | @CDP
Importance of Data Quality { Setting a science-based target { Meeting your customers sustainability goals
{ Understanding ‘hot spots’ in your value chain { Reducing scope 3 emissions { Tracking year-on-year progress
www.cdp.net | @CDP
Case study: Dell Technology Dell’s guidelines for suppliers: { { { { {
Report GHG emissions via CDP (minimum scope 1 and 2, scope 3 encouraged) Set public goals to reduce operational GHG impacts Tier 1 suppliers to establish GHG management and reporting requirements for their suppliers Report on water via CDP Water Publish a GRI-based sustainability report
In 2016, Dell achieved an industry-leading response rate of 95.4 percent, and in aggregate, their suppliers reduced 6.1M metric tons of CO2e in the last reporting year, equal to $606M in savings related to emissions reductions.
www.cdp.net | @CDP
Dell publicly states:
{{ Failure to meet these requirements can impact your supplier ranking and potentially diminish your ability to compete for Dell's business.
{{
More repeat participants reducing emissions
www.cdp.net | @CDP
4. Comprehensive Environmental Data Archive (CEDA) database
43
CEDA 380+ sectors
2700+ exchanges
44
VitalMetrics CDP Scope 3 Tool
45
Data Characteristics Base year and frequency of updates Consistency Completeness in scope and breadth Transparency of methodology Accessibility Uncertainty
46
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual Consistency
updates
Completeness in scope and breadth Transparency of methodology Accessibility Uncertainty
47
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 Completeness in scope and breadth Transparency of methodology Accessibility Uncertainty
48
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 ✓ Completeness in scope and breadth 380+ sectors, 2700+ Transparency of methodology
exchanges
Accessibility Uncertainty
49
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 ✓ Completeness in scope and breadth 380+ sectors, 2700+
✓
exchanges Transparency of methodology Published in a peer reviewed article in 2005
Accessibility Uncertainty
50
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 ✓ Completeness in scope and breadth 380+ sectors, 2700+
✓
✓
exchanges Transparency of methodology Published in a peer reviewed article in 2005 Accessibility Formatted in Excel, annual license available
Uncertainty
51
Data Characteristics ✓ Base year and frequency of updates 2014 base year, annual updates ✓ Consistency ISO 14040/44 ✓ Completeness in scope and breadth 380+ sectors, 2700+
✓
✓ ✓
exchanges Transparency of methodology Published in a peer reviewed article in 2005 Accessibility Formatted in Excel, annual license available Uncertainty Geometric standard deviation
52
Leveraging CEDA • • • •
Corporate greenhouse gas accounts (e.g., CDP) Investment portfolio footprints Sustainable spend analysis Product carbon footprints
53
Sustainability Spend Analysis
Note: This table has been truncated.
54
Product Carbon Footprints
Thousand metric tons CO2e
90
80
Sweetnat 2%
70
Oils 3%
Chocolate 3%
60
Others 15%
Flour 36%
Dairy Products 5% 50
Soy 8%
40
Fiber Inulin 11%
30
Oats 18%
20
10
0
Ingredients
Carton Packaging
Electricity
Corrugate Packaging
Natural Gas
Kashi Durable Goods
Others
55
5. Key takeaways
56
Take Home Messages • Quality data is the foundation of sustainability analysis • Consider data tradeoffs when measuring your organization's sustainability performance • CEDA can be leveraged to achieve robust environmental impact analyses • Corporate greenhouse gas accounts (e.g., CDP) • Investment portfolio footprints • Sustainable spend analysis
• Product carbon footprints 57
QUESTIONS? • Submit them through the chat box
If you have any further questions, please reach out to us at: [email protected] or at www.vitalmetricsgroup.com
58
