Measuring carbon footprint
Climatic change happens over many years so it might be difficult to notice dramatic changes over one human lifetime. For a company, measuring greenhouse gas emissions can be difficult, time-consuming and potentially very expensive. But this will be the starting point along the reporting journey, with benefits and obligations well-grounded.
Climate change is measurable, with a number of already established and widely recognised ways to measure portfolios in climate change exposure. While they are not perfect as the area itself is constantly evolving, there are currently several basic building blocks that people can use to calculate most emissions from organisations.
Generally, a carbon footprint is calculated by measuring and/or estimating the quantities and assessing the sources of various greenhouse emissions that can be directly or indirectly attributed to the activities of the underlying holdings.
Three Scopes of Emissions
The emissions are classified as per the Greenhouse Gas Protocol and are grouped in categories called Scope 1, Scope 2 and Scope 3.
Scope 1 refers to all direct emissions from the activities of an organization or entities under their control. Sources of emission include fuel combustion in gas boilers and fleet vehicles and air-conditioning leaks.
For example, for a jeans manufacturer, emissions can come from indigo dyeing and sizing, fabric weaving, as well as denim washing and brushing under the roof of the denim factory.
Scope 2 relates to indirect emissions from electricity a company produced and used from its supplier.
For example for a jeans manufacturer, this can include emissions produced by suppliers in generating steam, electricity, heating and cooling.
Scope 3 emissions are a consequence of the activities of the company, but
occur from sources not owned or controlled by the company. These occur along a value chain, both upstream with suppliers and downstream with customers.
Take a pair of jeans for example. There are emissions from the purchase of the raw materials like cotton which go into making the jeans. Then there’s all the fuel which is used in transporting materials from suppliers and the finished product to customers. If an employee takes a car, bus or train into work, if a sales person flies to see a potential customer, this is also Scope 3. Even if we decide that we no longer want the jeans, how they are disposed or recycled and what emissions are generated as part of this process is Scope 3.
Why is Fidelity measuring carbon footprint?
Fidelity is committed to achieve net zero emissions on operational emissions by 2040*. GHG Emissions is our most significant impact from our business operations and we are aware of the wider societal need to support the goals set out by the Paris Agreement capping global emissions to “well-below” 2°C.
In order to achieve this our focus will be on reduction of emissions through operational changes and investment in operational efficiencies, on-site renewals and purchasing of renewable energy whilst offsetting those we are unable to eradicate.
We aim to achieve the target by conducting our current and future business operations in a sustainable manner which helps create a better future for the environment.
This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 (“Fidelity Australia”). Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International.
Prior to making an investment decision, retail investors should seek advice from their financial adviser. This document is intended as general information only. Please remember past performance is not a guide to the future. Investors should also obtain and consider the Product Disclosure Statements ("PDS") for the fund(s) mentioned in this document before making any decision about whether to acquire the product. The PDS is available on www.fidelity.com.au or can be obtained by contacting Fidelity Australia on 1800 119 270. The relevant Target Market Determination (TMD) is available via www.fidelity.com.au. This document has been prepared without taking into account your objectives, financial situation or needs. You should consider such matters before acting on the information contained in this document. This document may include general commentary on market activity, industry or sector trends or other broad-based economic or political conditions which should not be construed as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be construed as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity's funds is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. References to ($) are in Australian dollars unless stated otherwise. Details of Fidelity Australia’s provision of financial services to retail clients are set out in our Financial Services Guide, a copy of which can be downloaded from our website.
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