GHG Management for Scope 3
The below diagram provides an overview of GHG emissions occurred by Samsung Electronics’ entire business activities. This was estimated and developed based on currently available data for Scope 1, 2 and 3. Scope 1 and 2 data are managed well and verified by the third party organizations. The company is investigating ways to improve Scope 3 data since it has technical and manageable limitations on data collection management in supply chain and transportation, etc.
Global Greenhouse Gas Emission Breakdown Diagram
The total global greenhouse gas emissions (Scope 1, 2 and 3) by Samsung Electronics’ business activities are estimated to about 56.8 million tons in 2011. The GHG emissions from its manufacturing and operation (Scope 1 and 2) are estimated about 20% in total GHG emissions.
This shows that the majority (approximately 80%) of GHG emissions occurred from indirect GHG emissions of Scope 3. The product use by consumers is the primary GHG emission source, and it is estimated about 57% of total GHG emissions.
For this reason, Samsung Electronics is focusing on reducing the indirect GHG emissions of scope 3 in order to reduce carbon footprint associated with our business activities. To manage Scope 3 GHG emissions effectively, the company has been developing the inventory of GHGs in Scope 3 since 2009.
Currently, the company manages and estimates Scope 3 GHG emissions according to the international standards for carbon fooprinting :
ISO 14064, IPCC guidelines, WBCSD Scope 3 guidelines and carbon footprint labeling standards of Korea.
The GHG emissions of transportation are accountable about 15% in total global GHG emissions. The company is monitoring and managing CO2 emissions associated with transport of materials, parts and products. The company is reporting GHG emissions by transportation types; air, marine and rail/road. For air and marine transportation, the company estimates GHG emissions based on products weight and distance information for global port-to-port logistics. For rail and road, the transportation information is available only for Korea.
In 2011, total GHG emissions by transportations are approximately 8.4 million tons, and increased about 14% compared to 2010 because of operating new production lines and increase of global sales and transferred materials/parts.
Global GHG Emissions by Transportation Types(1,000 tons CO2)
To reduce GHG emissions by transporting our products, the company is focusing on developing slim design of products and packaging technologies. For example, the 46 inch TV developed in 2011 was 3 times thinner than the TV in 2008, and it resulted in improving 3.5 times of the loading quantity for transportation via truck. Alternatively, it is contributing to fewer GHG emissions in transportation.
The company made a voluntary partnership with Korea Energy Management Corporation (KEMCO) for reducing transport GHG emissions in May 2011. This project provided some solutions to manage and optimize logistics effectively; increasing modal shift, installing idling stop device and digital tachograph system, and introducing fleet real-time monitoring system. The company is continuously working to discover reduction measures of transport GHG emissions.
The GHG emissions of business travel are minimal compared to the other scope 3 activities and it accounts for approximately 0.2% in total global GHG emissions. It covers the business travel done by Korea-based employees only. The number of employees in Korea is more than 100,000 persons, and it is almost the half of total employees globally.
In 2011, the GHG emissions by business travel were increased more than 10% compared to 2010 because of increased sales and its business activities. It is estimated that the GHG emissions from business travel are 112,597 tons occurred by air travel and by land transportation in Korea.
GHG Emissions from Business Travels by Employees in Korea(1,000 tons CO2)
The company has installed many video-conference systems and video training systems to avoid business trips by employees. The employees in Korea have regular meetings and provide training programs around the world through video conferencing. The company provides commuter buses for employees and promotes to use of more effective transport such as public transportation and rail travel instead of using car and air.
We are conducting a GHG emissions survey for the primary suppliers once a year to analyze their emissions and completed the survey for 2010 supplier GHG emissions in December 2011. The GHG emissions for 2010 are about 4.5 million tons, which is accountable for approximately 8% in total GHG emissions. For 2010 GHG covers about 63% of the primary suppliers based on the company’s purchasing costs.
The GHG emissions for 2010 were increased due to the rise in purchasing (63% rise) of total procurement in 2010 from 40% in 2009 as more suppliers participated in reporting 2010 GHG emissions in 2011. It resulted in increasing purchasing amounts more than 3 times in 2010.
To manage and reduce GHG emissions of suppliers effectively, it is important to build a sound GHG emission inventory for suppliers. From 2010, the company is provided training programs on GHG emission inventory development for suppliers and we will promote suppliers to participate in the supplier GHG emissions survey.
Also, the company joined the “Energy mentorship program for SMEs (Small and Medium Enterprises) ” of the Korea Ministry of Knowledge Economy on April 2012. This program was developed to help small and medium sized suppliers improve the energy and GHGs management by transferring knowledge and expertise. The company will work with selected suppliers to build an advanced GHGs emissions inventory and identify GHGs emission reduction opportunities as a pilot project to apply for all our supply chain.
The product use by consumers is a significant source for global GHG emissions associated with Samsung Electronics’ business activities, and it is accountable for almost 60% in total global GHG emissions. It is estimated that the GHG emissions by product use are approximately 32.9 million tons.
Therefore, the company is committed to reduce GHG emissions by improving energy efficiency of products sold on the market. The company operates a reduction program to reduce indirect GHG emissions by 84 million tons over a five year period through to the end of 2013 by improving energy efficiency by 40% by 2013 (2008 baseline).
In 2011, annual GHG emissions in product use decreased about 13% from 2010 levels though product increased from KRW 154.6 trillion in 2010 to KRW 165.0 trillion in 2011. The company achieved 17.6 million tons of reduction in 2011 by improving energy efficiency of products by 25.6% from 2008 baseline, and the cumulative GHG reduction amount reached about 32.9 million tons in the period of 2009 and 2011.
GHG Emissions and Reduction in Product Use
The energy consumption of products is managed through the company’s eco-design process. When planning new product models on product planning stage, it sets a target for power consumption to comply with this target throughout the entire product development process.
In 2011, the company developed and launched innovative energy-efficient products such as solar powered notePC(NC 215) and mobile phones(Rant3), green memory DDR3 and transparent LCD technologies.
The company has been actively participating in carbon labeling schemes to measure and reduce carbon footprint from products such as Korea National Carbon labeling and UK CarbonTrust.