ESG ESG Climate Change & Carbon Management

Question 1

What are 'Scope 3 emissions' in the GHG Protocol Corporate Standard?

Accepted Answer

All indirect emissions in a company's value chain not covered by Scope 2, including upstream suppliers and downstream product use

Answer

Emissions from company-owned vehicles only

Answer

Emissions from third-party logistics providers only

Answer

Emissions offset through carbon credits

Question 2

What criteria must emissions reduction targets meet to be certified by the Science Based Targets initiative (SBTi)?

Accepted Answer

Align with the level of emissions reductions required to meet Paris Agreement goals, following SBTi methodology validation

Answer

Reduce absolute emissions by 50% within 10 years

Answer

Offset 100% of Scope 1 and 2 emissions with verified carbon credits

Answer

Achieve net-zero across all Scopes within 5 years

Question 3

What is the primary difference between 'carbon neutral' and 'net-zero' claims?

Accepted Answer

Carbon neutral typically involves offsetting residual emissions; net-zero requires deep absolute reductions with only minimal residual offsetting

Answer

Carbon neutral applies only to products; net-zero applies to companies

Answer

Carbon neutral is certified; net-zero is self-declared

Answer

They are legally identical terms with no meaningful distinction

Question 4

What is an 'internal carbon price' (ICP) and how is it used?

Accepted Answer

A shadow price applied to carbon emissions in internal business decisions to incentivize low-carbon investment choices

Answer

The price a company pays for carbon credits on voluntary markets

Answer

The cost per ton charged to a company's customers for embedded carbon

Answer

A regulatory fee imposed by state governments on large emitters

Question 5

What does 'carbon accounting' under the GHG Protocol require companies to select before calculating emissions?

Accepted Answer

An organizational boundary approach: equity share, financial control, or operational control

Answer

A certified carbon accounting software

Answer

A third-party verifier approved by the GHG Protocol

Answer

A sector-specific emissions factor database

Question 6

What is a 'climate transition plan' as expected under emerging disclosure frameworks?

Accepted Answer

A detailed, time-bound plan showing how a company will align its business model with a net-zero economy

Answer

A plan for relocating operations to avoid physical climate risks

Answer

A contingency plan for climate-related business disruption

Answer

A plan for transitioning the workforce to green jobs