Data

Data can be a powerful motivator. The story of your ESG data should gradually mature into a grand narrative. Win hearts to win minds. Enrich your business processes and, in time, change behaviour.

Unfortunately, Scope 3 ESG data tends to be sparse and inconsistent. Quantitative and qualitative data can be manipulated (greenwashing).  We allow quantitative data to be reduced to random KPIs, or contradictory ratings scores. We condone it when the expedient sanitise our qualitative data (marketing campaigns, community projects, CSR reports, press releases). Catchy anecdotes may entertain everyone, but ultimately convince no one.

If you have gotten this far, you may be seriously considering reporting Scope 3 emissions across all categories for electronics. Well done. Your commitment to building a sustainable supply chain is solid. Now, let's co-create a strategy to collect and prioritize your supply chain data. Relevant data sources include your internal data, data from your supply chain and external data sources (as references).

STEPS FOR THE DATA PORTION OF YOUR ENGAGEMENT
a.) Tell us which fund(s) you participate in. If you are not publicly traded, apply this step for your largest customer(s).
b.) We summarize the nature of the fund(s). Examples include Integration Funds, “ESG-Focused” Funds, open-end funds and closed-end funds. You can find details about the fund's ESG strategy in the prospectus.
c.) We work with you to ensure your ESG strategy aligns with the ESG strategies for all the funds of which you belong.
d.) We identify ESG factors.
e.) We identify the sources of GHG emissions data you will use.
f.) We are ready to create your data report. Your data report will be integrated with your process maps to create a preliminary report.

The below information is for example purposes only and does not reflect actual events.

ACME COMPANY REPORT

Delivered by MobiCycle Consulting on September 1, 2022

Qualitative metrics overview

NOTES

Our absolute level of emissions continues to rise. We are on track to reach 3 degrees of warming. Yet, we continue to debate 1.5 versus 2 degrees of warming. Even half a degree extra of warming drastically reduces our standard of living; i.e., more people dying potentially horrible deaths. Our rhetoric is ambitious, but the implementation falls short.

Some of us have committed to a gradual reduction in our carbon footprint around oil, gas and critical minerals. Our efforts do not track to the commitments we make. What we do, and what we aspire to do, are two far away concepts. What we currently measure, and what we should measure, are distant cousins.

The threat of reaching 1.5 degrees centigrade in global warming may already alarm you. What you imagined previously, is now outdated. The estimates have been revised. The impacts will be far worse than was previously thought.

Our rhetoric gives a false impression that the situation is under control.  Our efforts do not scale. When you balance the progress made, against the increasing unabsorbed pollution, the conclusion is we are falling behind. We take two steps back for every step forward. We sometimes retreat so far, biodiversity goes extinct. We forever sacrifice opportunities to leverage nature to reduce emissions.

Thus, net zero is a pretence for business as usual. Net zero allows us to avoid making the touch decisions. It is not easy to wean ourselves off our addiction to fuel and electronics.

Qualitative ESG factors may include any of the following:

a.) an ESG strategy for Scope 3 emissions around electronics
b.) disclosure of how the S and G of ESG, the social and governance, compete with the E
c.) marketing campaigns
d.) anecdotal evidence

The summary section of your prospectus can provide an overview of your ESG strategy. If you do not have a summary section, provide an overview earlier in your prospectus.

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Quantitative metrics overview

NOTES

Our absolute level of emissions continues to rise. We are on track to reach 3 degrees of warming. Yet, we continue to debate 1.5 versus 2 degrees of warming. Even half a degree extra of warming drastically reduces our standard of living; i.e., more people dying potentially horrible deaths. Our rhetoric is ambitious, but the implementation falls short.

Some of us have committed to a gradual reduction in our carbon footprint around oil, gas and critical minerals. Our efforts do not track to the commitments we make. What we do, and what we aspire to do, are two far away concepts. What we currently measure, and what we should measure, are distant cousins.

The threat of reaching 1.5 degrees centigrade in global warming may already alarm you. What you imagined previously, is now outdated. The estimates have been revised. The impacts will be far worse than was previously thought.

Our rhetoric gives a false impression that the situation is under control.  Our efforts do not scale. When you balance the progress made, against the increasing unabsorbed pollution, the conclusion is we are falling behind. We take two steps back for every step forward. We sometimes retreat so far, biodiversity goes extinct. We forever sacrifice opportunities to leverage nature to reduce emissions.

Thus, net zero is a pretence for business as usual. Net zero allows us to avoid making the touch decisions. It is not easy to wean ourselves off our addiction to fuel and electronics.

Qualitative ESG factors may include any of the following:

a.) an ESG strategy for Scope 3 emissions around electronics
b.) disclosure of how the S and G of ESG, the social and governance, compete with the E
c.) marketing campaigns
d.) anecdotal evidence

The summary section of your prospectus can provide an overview of your ESG strategy. If you do not have a summary section, provide an overview earlier in your prospectus.
Do you trade on the public markets? Are you privately owned, but your largest customers trade on the public markets? You may be directly or indirectly responsible for tracking and disclosing certain activities.

An Integration Fund has a mixture of ESG and non-ESG factors. The ESG factors are no more important than non-ESG factors when the fund manager decides to invest.

Potential Quantitative ESG factors:

a.) GHG emissions from electronics purchased and recycled
b.) eWaste recyclying rates
c.) tonnage of eWaste generate from sales and from internal operational use
d.) percentage of purchased electronics that are refurbished
e.) percentage of broken electronics that are repaired and reused as opposed to discarded
f.)  average lifetime for electronics (prior to disposal)

USA: The SEC
The SEC requires two greenhouse gas (“GHG”) emissions metrics.  GHG emissions can be found either in the fund’s statutory prospectus or closed-end fund’s prospectus.

Europe: The EU Green Deal
tbd

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Supplier Data

NOTES

In the last 30 years, the UK's carbon footprint dropped just 15%, due mostly to the move away from coal. The future will require demand side policies to curb our emissions. In the case of war, demand side policies may be imposed on us as supply chains are disrupted.

At present, leaders focus on supply side negotiations with previously untapped sources. The medium to long term consequences of working with new sources that are not based in democratic economies, are considerable.

When the squeeze occurs, some suppliers are likely to be allocated a similar share of oil and gas they rely on to operate. Other suppliers will have to meet customer demands with less, which will require them to drop customers or limit quantities sold to some customers, if they can not change to renewables fast enough.

Greenhouse gas emissions

carbon dioxide (CO2),
nitrous oxide (N‍2O)
methane (CH4)
sulfur hexafluoride (SF‍6)
hydrofluorocarbons (HFCs)
perfluorocarbons (PFCs)

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Your Data

NOTES

We had a 50/50 chance of exceeding 1.5 degrees Celsius by 2050. This scenario relied on us not using our carbon budget. At the current level of emissions, we will have used all of the budget long before then. The current rate of use is too high and we are blowing the budget. This year alone we have added 18 billion tons of CO2.

What does the collective we need to do? A fund manager may exclude your company from its ESG fund because you derive significant revenue from the extraction or refinement of fossil fuels, or sale of alcohol. In the near future, you may be excluded for buying products that rely on the extraction or refinement of fossil fuels or critical minerals.

Greenhouse gas emissions

carbon dioxide (CO2),
nitrous oxide (N‍2O)
methane (CH4)
sulfur hexafluoride (SF‍6)
hydrofluorocarbons (HFCs)
perfluorocarbons (PFCs)

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External Data

NOTES

External ESG data comes from ratings agencies, fund registration statements, fund annual reports, adviser brochures, material information disclosures, shareholder reports, and Form ADV Part 2. None have specific requirements about what an ESG fund or adviser must report.

The richest 10% of the population caused almost half of the increase in absolute global emissions. We must prioritize for the greater good. That means talking directly in simple language. For example, gas is principally methane. Carbon represents 75 percent of its mass. By any measure, methane gas should not be considered a "low carbon" fuel. Yet, our politicians argue exactly this point.

A second issue with methane is the leaks. Methane does not stay in the atmosphere as long, but is more damaging than carbon dioxide. Ask your supply chain what they are doing about methane leaks.

A third issue is the greenhouse gases from electronics. The media focus on carbon. They are beginning to look at a far more potent GHG, methane. Not enough attention is paid to super greenhouse gases. These gases are far more potent than carbon dioxide but have a shorter life span. Targeting these gases for reduction can

The Paris Agreement regulates
a.) fluorinated gases (sulfur hexafluoride (SF6)
b.) hydrofluorocarbons (HFCs) and
c.) perfluorocarbons (PFCs))the

The Montreal Protocol will end
a.) chlorofluorocarbons (CFCs) and
b.) hydrochlorofluorocarbons (HCFCs)

The Kigali Amendment will end HFCs globally by 85% by 2050.

Greenhouse gas emissions

carbon dioxide (CO2),
nitrous oxide (N‍2O)
methane (CH4)
sulfur hexafluoride (SF‍6)
hydrofluorocarbons (HFCs)
perfluorocarbons (PFCs)

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Inline XBLR

NOTES

Forms N-CEN, ADV Part 1A

You may already be aware of the most popular international reporting standards, XBRL and iXBRL. If you are publicly traded and your company is part of an ESG fund, the reports must be "tagged" using the Inline eXtensible Business Reporting Language (“Inline XBRL”). Inline XBRL adds structure to your report in the form of tags. The tags enable computers to easily extract data. The data from one report can be easily compared to the same tagged data on reports from other companies. Another benefit is to understand industry trends.

XBRL is used for electronic reports. XBRL has concepts, taxonomies, facts, values, periods, contextual information and instance documents. A concept is something like "Profit" or "Asset". A taxonomy is a list of concepts. A fact is a concept attached to contextual information, a value and a period of time. An instance document is a list of facts.

iXBLR takes an instance document and tags similar items on the report. For example, all occurrences of a concept would be tagged as a concept. These tags can be read by machines.

The XBRL Global Ledger Taxonomy (XBRL GL) represents a chart of accounts, journal entries or historical transactions, financial and non-financial data.

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Databases

NOTES

Data is retrieved from your ERP system or from your Software as a Service.

SOURCE

SCOPE 3 CATEGORY

Customer Relationship Management

1, 2, 11

Order Management

1, 2

Inventory Management

1, 2, 5

Warehouse Management

1, 2, 5, 10

Project Management

1, 2, 5

Finance

1, 2, 5

Accounting

5, 12

Supply Chain Management

5, 12

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Fixed Assets Ledger

NOTES

Our goal is to determine the extent to which activities around electronics and electricals represent revenue, turnover, operating expenditure and/ or capital expenditure.

For example, if acquisition of refurbished laptops represents 4 per cent of operating expenditure, we would declare 4 per cent of our activities as green in the SEC or taxonomy aligned in the EU in our Scope 3 report.

ACTIVITIES

SCOPE 3 CATEGORIES

Acquisition
1
Subsequent acquisition
1
Complete retirement – sales
9, 10, 11, 12
Complete retirement – scrapping
5
Partial retirement – sales
9, 10, 11, 12
Partial retirement – scrapping
5
Complete transfer
14
Partial transfer
14

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Inventory Ledger

NOTES

The electronic and electrical items in your inventory can be held for eventual sale. The activities around these items may contribute to climate change mitigation and adaptation. The field is matched to the most likely Scope 3 category.

FIELDS

SCOPE 3 CATEGORY

Material number
1, 5, 9, 10, 11, 12
Material description
1, 5, 9, 10, 11, 12
Part number
1, 5, 9, 10, 11, 12
Plant
1, 5, 9, 10, 11, 12
Plant name
1, 5, 9, 10, 11, 12
Storage location
1, 5, 9, 10, 11, 12
Batch
1, 5, 9, 10, 11, 12
Entry date
1, 5, 9, 10, 11, 12

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