Evaluating Corporate Climate Performance: A Model for Benchmarking GHG Reductions

Bella Tonkonogy and Jim Sullivan, U.S. Environmental Protection Agency
Gregory A. Norris, Sylvatica and Harvard School of Public Health

Keywords

Abstract

Many companies have stepped forward to announce long-term public greenhouse gas (GHG) reduction goals. These companies have generally been lauded by their customers and shareholders for taking proactive steps to address climate change. However, there have been few efforts to evaluate the extent to which these public corporate GHG goals represent actual GHG reductions as opposed to business-as-usual changes expected for their sector.
Performance benchmarking has been used to rate energy efficiency efforts in products, buildings, and industrial facilities. However, benchmarking has been used less frequently to evaluate corporate GHG performance. The U.S. Environmental Protection Agency (EPA) has developed a sector-based benchmark methodology to use as a tool for projecting business-as- usual GHG intensity improvements and assessing corporate GHG reduction goals proposed to the EPA Climate Leaders Partnership. The model incorporates best available data on energy consumption, GHG process emissions, and production output from the U.S. Energy Information Administration and Bureau of Labor Statistics for commercial and industrial sectors, as well as the Integrated Planning Model (IPM) for electric generators developed by ICF International, Inc.
The methodology and results of goal evaluations for several sectors are reviewed, including data sources and data quality, model output, relevance to the proposed corporate goal, and how the analysis was used in evaluating corporate GHG reduction goals. The paper concludes with a discussion of how EPA’s analytical approach to evaluating and negotiating GHG reduction goals can motivate companies to take more aggressive actions to reduce their GHG footprint, such as significant energy efficiency improvements.