CEP CEP Climate Change Strategy & Carbon Management 1 — Questions and Answers
Question 1: What does 'Scope 1' greenhouse gas emissions refer to under the GHG Protocol?
- Direct emissions from owned or controlled sources (Correct answer)
- Indirect emissions from purchased energy
- Value chain emissions from suppliers
- Emissions from product end-of-life disposal
Correct answer: Direct emissions from owned or controlled sources
Scope 1 covers direct GHG emissions from sources owned or controlled by a company, such as on-site combustion and company vehicles.
Question 2: Which international agreement established legally binding emissions reduction targets for developed nations and introduced carbon market mechanisms?
- Paris Agreement
- Kyoto Protocol (Correct answer)
- Montreal Protocol
- Copenhagen Accord
Correct answer: Kyoto Protocol
The Kyoto Protocol (1997) set binding emission reduction targets for developed countries and introduced flexibility mechanisms like emissions trading and CDM.
Question 3: What is a 'Science-Based Target' (SBT) in the context of corporate climate strategy?
- Any internally set emissions reduction goal
- An emissions target aligned with the level of decarbonization required to meet Paris Agreement temperature goals (Correct answer)
- A target validated by a company's internal science team
- A regulatory minimum set by the EPA
Correct answer: An emissions target aligned with the level of decarbonization required to meet Paris Agreement temperature goals
Science-Based Targets are corporate GHG reduction goals validated by the SBTi to ensure alignment with limiting global warming to 1.5°C or well below 2°C.
Question 4: Which carbon accounting methodology distinguishes between market-based and location-based approaches for Scope 2 emissions?
- TCFD framework
- GHG Protocol Scope 2 Guidance (Correct answer)
- ISO 14064
- CDP disclosure standard
Correct answer: GHG Protocol Scope 2 Guidance
The GHG Protocol's Scope 2 Guidance requires companies to report both market-based (energy contracts) and location-based (grid average) Scope 2 figures.
Question 5: What is 'carbon neutrality' as typically defined in corporate climate commitments?
- Achieving zero Scope 1 emissions through operational changes only
- Balancing the amount of carbon emitted with an equivalent amount offset or removed (Correct answer)
- Reducing all three scopes of emissions to absolute zero
- Purchasing renewable energy certificates equal to total electricity use
Correct answer: Balancing the amount of carbon emitted with an equivalent amount offset or removed
Carbon neutrality means a company balances its residual GHG emissions through verified carbon offsets or removals, resulting in a net-zero carbon footprint.
Question 6: What is a 'transition risk' in climate-related financial risk assessment per TCFD recommendations?
- Physical damage to assets from extreme weather events
- Financial risk arising from the shift to a lower-carbon economy, such as policy changes or technology shifts (Correct answer)
- Legal liability from environmental contamination
- Supply chain disruption from natural disasters
Correct answer: Financial risk arising from the shift to a lower-carbon economy, such as policy changes or technology shifts
TCFD defines transition risks as risks related to the transition to a lower-carbon economy, including policy, legal, technology, market, and reputational risks.
CEP CEP Climate Change Strategy & Carbon Management 1
What does 'Scope 1' greenhouse gas emissions refer to under the GHG Protocol?