Carbon Calculation Method
Knorr-Bremse calculates its carbon emissions – Scope 1, Scope 2 and relevant categories from Scope 3 – in accordance with the revised edition of the Greenhouse Gas (GHG) Protocol, A Corporate Accounting and Reporting Standard and the Corporate Value Chain Accounting and Reporting Standard. The balance sheet limits are applied on the basis of operational control via business units. In the following, we describe the calculation methods for the CO2 emission figures published by us for the three Scopes of the GHG Protocol.
Scope 1 and Scope 2 – Direct and Indirect CO2 Emissions
The carbon accounting at Knorr-Bremse factors in direct CO2 emissions from the company’s own emission sources (Scope 1) and indirect emissions from the generation of purchased energy (Scope 2). As with the underlying energy consumption, we report on emissions in accordance with our HSE reporting guideline. As such, we account for locations with more than 50 employees or locations with an environmental management system, which primarily concerns production and service sites. This results in a coverage rate of around 97% of Knorr-Bremse employees.
For Scope 1, we calculate direct emissions that arise within the company from burning natural gas, oil, coal, petroleum-based fuels and liquefied petroleum gas, or from our own generation of electricity. The calculation also includes fuel consumption by the company’s own vehicles. Emissions are calculated using the emissions factors published by the VDA1) in 2022.
For Scope 2, we calculate emissions from the energy purchased in the form of electricity, district heating, district steam and district cooling. Since 2021, we have reported both market-based and location-based emissions. To calculate location-based CO2 emissions, we use the country-specific emissions factors of the VDA1), published in 2022, and those of the IEA2).
For the market-based approach, we use the specific CO2 emissions factors of the electricity suppliers or account for the emissions factor with 0 kg CO2/kWh if renewable electricity is used. If the data for the electricity providers is not available, we use the European residual mix of the Association of Industry Bodies (AIB). The average emissions factors for a given country, as provided by the IEA2) (see “Location-Based Approach”), are used if neither the data of the suppliers nor the residual mix is available.
Scope 3 – Indirect CO2e Emissions
In addition to the indirect emissions from upstream business activities, which we reported for the first time in 2021, we also published the indirect emissions from up- and downstream transportation and distribution and from the downstream use of our sold products in 2022. They are recognized as CO2 equivalents and are currently limited to the following categories:
The emissions from purchased goods and services are calculated using a spend-based approach, i.e., based on the expenditure on materials and services. The emissions factors used for this come from an external data model. The model used combines the methods of input–output modeling (EEIO, environmental extended input/output methodology) and greenhouse gas accounting with trade data and further external data sets. The emissions calculated cover the entire upstream supply chain ranging from the production of commodities through to tier-one suppliers (cradle to gate).
This category comprises transportation-related emissions from incoming, internal and outgoing (paid by Knorr-Bremse) transportation (Scope 3.4) as well as from outgoing transportation paid for by the customer and carried out by external carriers (Scope 3.9). Different calculation methods were used for the divisions CVS and RVS. For CVS, a large part of the footprint is based on primary emissions data provided by suppliers. Another large part was calculated using a distance-based approach while the remaining part was calculated with a spend-based approach. For RVS, the footprint was calculated using a purely distance-based approach. Standard well-to-wheel emissions factors from the Smart Freight Centre GLEC Framework v2 were used for the distance-based approach. The spend-based estimates are based on emissions factors from the Quantis Scope 3 Evaluator. The emissions of external warehouses are calculated using a square meter basis as well as the global pathway greenhouse gas values for industrial distribution warehouses, provided by CRREM, per year and square meter. These emissions values were added onto the transportation-related emissions.
Calculation of CO2e emissions from business trips is carried out by our three most relevant travel agencies on the basis of flight lengths. The travel agency for Europe and parts of the APAC3) region calculates emissions in accordance with the Greenhouse Gas Protocol. The agencies for North and South America and China use emissions factors for short-, medium- and long-haul flights.
Emissions arising from the commutes of our employees are calculated using average commute distances from Germany as well as the EMEA4), North and South America and APAC3) regions. The modes of transportation included are cars, public transportation, bicycles and walking. The number of working days and employees are also included in the calculation. The increase in working from home due to measures to prevent the spread of COVID-19 is accounted for at around 18%. The emissions factors for Scope 3.7 are taken from the BEIS/DEFRA emissions factors published in 2022.
Knorr-Bremse’s footprint in Scope 3.11 comprises the direct emissions from the use phase of products with direct energy and fuel consumption in rail and commercial vehicles. Nineteen relevant product groups have been identified for RVS and one for CVS. For CVS, an estimate of further product groups with direct energy consumption was calculated. The estimate indicated that those product groups together represent approximately 3% of CVS’ Scope 3.11 emissions and are therefore not seen as relevant, which is why they are added on as a lump sum. Regional emissions factors were used for the RVS modeling while global emissions factors were used for CVS, in both cases in accordance with the IEA2) and BEIS/DEFRA.
Restatement
In the event of methodological or structural changes or incorrectly reported indicators, the base years for the climate targets are adjusted retroactively if the changes entail an impact greater than 5% on the total emissions of an emission category.