Step 2 and 3 of version 4.0: reducing CO₂ with the supply chain

Many small organisations only have one person responsible for CO₂ management. In such cases, it may be difficult to find another employee who is both independent and knowledgeable enough to conduct the internal audit. It may therefore be helpful to have the internal audit conducted by, for example, a QHSE officer from a partner company or an external advisor.

In principle, yes. However, we assume the additional effort required will be considerable.

An external consultant can also be a key person (it is about a person or role). It is, however, important that there is always at least one key person from within the organisation.

No. Emission savings mean reduced emissions, whereas negative emissions refer to actively removing CO₂ from the atmosphere.

You can certify directly to Step 3, even without holding a Step 1 certificate. However, you cannot go straight to Step 3 if your organisation has not operated an energy or CO₂ management system over the past year or has not yet achieved any targets.

While familiarity with version 3.1 can be useful, it is not required. Only for Step 3 are there restrictions on certifying in one step: organisations must have achieved targets or operated an energy/CO₂ management system in the past year.

No. An accountant will always have to independently determine compliance with the CSRD. However, it is possible that the accountant may take the auditor’s opinion as background information. Certification for the Ladder can therefore be helpful.

While nothing changes for most organisations, average audit time is expected to increase slightly. This depends on organisational size (according to the new criteria, see section 4.2 in the handbook) and the Step sought. For detailed information, look at the audit days table.

Electrification almost always leads to energy savings. (See also the section ‘How can large-scale electrification be combined with energy savings?’)

As for the answer regarding subcontractors using more diesel: at Step 1 this is outside the mandatory targets for energy savings. The aim is to reduce the organisation’s own energy consumption (in emission terms: scopes 1 and 2). Of course, at Steps 2 and 3 the intention is that the emissions from subcontractors will be reduced.

Start with a high-level analysis of your value chain. Many organisations begin with the spend-based method, using procurement data. This provides quick insight into the magnitude and relevance of different activities and Scope 3 categories. You can then deepen your understanding with other methods that better reflect the impact of reduction measures. Databases such as AiB, EcoInvent, Exiobase, DEFRA (GOV.UK), or ADEME are useful starting points. Construction companies can use DGBC’s Scope 3 Guide. Read more about addressing your scope 3 emissions.

From Step 2 onwards, you are required to provide a qualitative OBE analysis. Avoided emissions are part of this. The Questionnaire Other Influential Emissions (OIE) can be used as a tool.

Electrification almost always leads to energy savings.

It does not matter whether grey or green electricity is used. For example, a car with an internal combustion engine has an energy loss of approximately 70%. If you add the conversion loss from crude oil to fuel, you arrive at a total loss of approximately 80%. An electric car loses about 20% during driving. If you then add the loss in the power station (if it is grey electricity) and the transport loss, the total loss is about 60%.

Between two comparable cars, the electric is always more energy-efficient.

Public authorities with a Step 2 or 3 certificate are required to collaborate with their value chain partners, regardless of whether they use the CO₂ Performance Ladder in procurement. Authorities using the Ladder without certification (or only at Step 1, which does not require Scope 3 considerations) are still encouraged to collaborate with certified contractors through enhanced project information exchange via My CO₂ Performance Ladder in version 4.0.

Start with the Scope 3 emissions that are relatively significant and where your influence is relatively large. These factors often go hand in hand: if a supplier is responsible for substantial Scope 3 emissions, you probably purchase a large volume from them, increasing the likelihood of engaging them in discussions. It is inherent to Scope 3 that your influence is ultimately limited. What matters most is showing that you are doing everything you can to reduce these emissions.

The core of the plan should include your organisation’s long-term strategy and objectives, with net zero emissions by 2050 as the goal. The specific requirements are outlined in criterion 3.B.1 of CO₂ Performance Ladder version 4.0.

By definition, Scope 3 reduction requires collaboration. These emissions occur within the chain, so coordination with clients, suppliers or other value chain actors is always necessary. While collaboration is a feature of all perspectives at Steps 2 and 3, Perspective D provides the most opportunities. Each certificate holder is responsible for the project files relating to parts of the project within their organisational boundaries. Paragraph 4.1.3 of CO₂ Performance Ladder 4.0 explains how this works. Multiple parties in a partnership may therefore report on the same project.

A plan developed for CSRD or SBTi provides a strong foundation for the Ladder’s climate transition plan. The Ladder’s requirements have been aligned as much as possible with those of these frameworks. Often, only one plan is needed. However, due to the inclusion of other controllable emissions (OBE), SBTi or CSRD plans may need to be expanded for full compliance.

All three are management system standards with certification options. They also cover overlapping themes: environmental management (14001), energy (50001), and CO₂ (the Ladder). However, the Ladder includes different Steps (unlike the ISO standards) and aligns with the GHG Protocol. See this article for its relationship with CSRD.

Circularity plays several roles in Handbook 4.0. First, reducing CO₂ emissions – a core element of climate action – is also central to circularity. Second, Handbook 4.0 places more emphasis on long-term CO₂ reduction and other controllable emissions (at Steps 2 and 3), creating greater opportunities for a circular approach among certificate holders.

Only direct contributions by the organisation that result in CO₂ removal may count as Other Controllable Emissions (OBE). If CO₂ compensation is solely a financial transaction (e.g. the purchase of carbon credits), it is considered an indirect contribution and does not count towards the Ladder.

At least once a year. The purpose of preparing a footprint is to be able to steer CO₂ in a timely and focused manner. If organisational processes require it, it can be beneficial to prepare a footprint more frequently.

Material FLAG emissions must be included in Scope 1 (for direct emissions) or Scope 3 (in the value chain), in accordance with the GHG Protocol and thus the CO₂ Performance Ladder. If these involve non-CO₂ greenhouse gases such as methane or nitrous oxide, they must be recorded separately under Scope 1 or 3.

In principle, Step 1 only covers scopes 1 and 2, so no. However, there are two exceptions: an organisation can voluntarily include business travel (a scope 3 category) and must always report on the supply chain emissions of fuels (so-called Well-to-Tank emissions).

The handbooks per Step contain the only official lists of requirements provided by SKAO. We prefer not to use the term ‘checklist’ as the emphasis of a management system should be on processes that support continuous improvement.

Yes, certainly. Non-CO₂ greenhouse gases include methane (CH₄), nitrous oxide (N₂O), HFCs, PFCs, SF₆ and NF₃. These are the greenhouse gases that were included in the Kyoto Protocol in 1997 (NF₃ was added at a later stage). This article provides more explanation about the role of non-CO₂ greenhouse gases in CO₂ Performance Ladder 4.0.

The PMC analysis from Handbook 3.1 forms the basis for the I&I analysis in version 4.0. The I&I analysis goes further, covering Scope 1, 2, and (only at Step 3) also Other Controllable Emissions (OBE). It is therefore more cross-cutting than the PMC analysis. Additionally, organisations have more freedom to define their own activity categories, and the I&I analysis uses more criteria to determine impact and influence.

In the coming years, more organisations will achieve net zero for Scope 1 and 2. However, Scope 3 is a different matter. Organisations that have already nearly completed Scope 1 and 2 should aim for Step 2 or 3. When further reduction is difficult, the emphasis should shift towards collaboration with sector and value chain partners to jointly tackle the remaining challenges.

As an energy and CO₂ management system, the Ladder is designed to support active CO₂ reduction. While CO₂ compensation, whether domestic or international, can contribute to climate action, it is considered a supplementary measure and does not count towards the CO₂ Performance Ladder.

That is the intention. SKAO will advise contracting authorities on this in the new Procurement Guide (expected summer ’25). It will include recommended fictional discounts for tenders as well as award criteria.