CSR Climate Change and Carbon Management 1 — Questions and Answers
Question 1: Which framework categorizes corporate greenhouse gas emissions into Scope 1, Scope 2, and Scope 3?
- The Carbon Disclosure Project (CDP) Standard
- The Greenhouse Gas Protocol Corporate Standard (Correct answer)
- The Science Based Targets initiative (SBTi)
- The Task Force on Climate-related Financial Disclosures (TCFD)
Correct answer: The Greenhouse Gas Protocol Corporate Standard
The Greenhouse Gas Protocol Corporate Standard, developed by WRI and WBCSD, established the Scope 1, 2, and 3 framework used globally to categorize and measure corporate emissions.
Question 2: What are Scope 3 emissions in corporate carbon accounting?
- Direct emissions from company-owned facilities and vehicles
- Indirect emissions from purchased electricity and heat
- All other indirect emissions in a company's value chain (Correct answer)
- Emissions from company-sponsored employee travel only
Correct answer: All other indirect emissions in a company's value chain
Scope 3 emissions encompass all indirect emissions across a company's entire value chain, including upstream supplier activities and downstream product use and disposal.
Question 3: Under the Paris Agreement, what is the primary long-term temperature goal?
- Limit warming to 1.0°C above pre-industrial levels
- Limit warming to well below 2°C, pursuing efforts to limit to 1.5°C (Correct answer)
- Achieve net zero emissions by 2030
- Reduce global emissions by 50% from 2000 levels by 2050
Correct answer: Limit warming to well below 2°C, pursuing efforts to limit to 1.5°C
The Paris Agreement's central aim is to limit global average temperature increase to well below 2°C above pre-industrial levels, while pursuing efforts to limit the increase to 1.5°C.
Question 4: What is the key distinction between 'carbon neutral' and 'net zero'?
- Carbon neutral applies only to Scope 1 emissions; net zero covers all scopes
- Carbon neutral and net zero are legally interchangeable terms
- Net zero typically requires deeper absolute emissions reductions before using offsets; carbon neutral can rely more heavily on offsets (Correct answer)
- Carbon neutral is a government standard; net zero is a voluntary corporate pledge
Correct answer: Net zero typically requires deeper absolute emissions reductions before using offsets; carbon neutral can rely more heavily on offsets
Net zero generally requires companies to first achieve substantial absolute emissions reductions across all scopes, with limited use of high-quality offsets, whereas carbon neutral status can be achieved more readily through purchasing offsets.
Question 5: What does a Science Based Target (SBT) require of a company's emissions reduction goals?
- Reducing emissions by at least 10% per year regardless of sector
- Aligning emission reduction targets with what climate science says is needed to meet Paris Agreement goals (Correct answer)
- Achieving carbon neutrality within five years of commitment
- Purchasing offsets equivalent to 100% of Scope 1 and 2 emissions annually
Correct answer: Aligning emission reduction targets with what climate science says is needed to meet Paris Agreement goals
Science Based Targets require that corporate emissions reduction goals be aligned with the level of decarbonization needed to keep global warming within Paris Agreement thresholds, validated by the SBTi.
Question 6: In cap-and-trade systems, what happens when a company emits less than its allocated carbon allowance?
- The surplus allowances are automatically retired to reduce total market emissions
- The company faces a penalty for underutilizing its allowance
- The company can sell or bank its surplus allowances (Correct answer)
- The allowances expire at the end of the compliance period with no value
Correct answer: The company can sell or bank its surplus allowances
In cap-and-trade systems, companies that emit below their cap can sell surplus allowances to other companies or bank them for future compliance periods, creating a financial incentive to reduce emissions.
Question 7: What is a carbon offset credit?
- A tax deduction granted for investing in renewable energy infrastructure
- A verified unit representing the reduction or removal of one metric ton of CO2-equivalent from the atmosphere (Correct answer)
- A government certificate confirming a company has paid its carbon tax
- A financial instrument that allows companies to exceed their emissions cap temporarily
Correct answer: A verified unit representing the reduction or removal of one metric ton of CO2-equivalent from the atmosphere
A carbon offset credit represents a verified reduction or removal of one metric ton of CO2-equivalent achieved through a project such as reforestation or methane capture, which companies can purchase to compensate for their own emissions.
CSR Climate Change and Carbon Management 1
Which framework categorizes corporate greenhouse gas emissions into Scope 1, Scope 2, and Scope 3?