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 47.6 million tons in 2012. The GHG emissions from its manufacturing and operation (Scope 1 and 2) are estimated about 15.7% in total GHG emissions.
This shows that the majority (approximately 84%) 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 54.5% 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 21% 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, rail and 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 2012, its logistics emissions increased by 20% over 2011 to 10.12 million tons. Yet the emissions relative to KRW-based sales decreased by 2% in the same period.
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 0.3% 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 2012, the GHG emissions by business travel were increased more than 14% compared to 2011 because of increased sales and its business activities. It is estimated that the GHG emissions from business travel are 128,042 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 2011 supplier GHG emissions in December 2012. The GHG emissions for 2011 are about 3.9 million tons, which is accountable for approximately 8% in total GHG emissions. For 2011 GHG covers about 65.4% of the primary suppliers based on the company’s purchasing costs.
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 55% in total global GHG emissions. It is estimated that the GHG emissions by product use are approximately 26 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).
The company converts the annual improvement effects of each product in terms of energy efficiency into GHG emissions reductions. Although its product sales increase every year, GHG emissions during product use have decreased due to improvements in the energy efficiency of Samsung Electronics’ products.
In 2012, Samsung Electronics improved its average product energy efficiency by 30% compared to BAU in 2008 and reduced GHG emissions by a total of 25,420 tons. Since 2009, it has indirectly reduced GHG emissions by an accumulated total of 58.34 million tons.
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.
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.