In the CO2 Performance Ladder version 4.0, the five levels of certification from version 3.1 are replaced by three steps. In this blog, we explain what the three steps mean and to what extent they differ from or correspond to the levels of the previous version of the Ladder.

Version 4.0 of the CO2 Performance Ladder introduces several changes. For some organisations this means a few minor adjustments, but for others the changes are a bit more drastic. Especially if you want to qualify for step 2 or 3, you will have to set up very ambitious goals.

Step 1: reducing CO2 in your own organisation

Step 1 is in many ways similar to levels 1 to 3 of the CO2 Performance Ladder version 3.1 For example, step 1 also focuses on scope 1 and 2 emissions. But there are also a few important differences:

Step 1 requires your organisation to pay more attention to CO2 awareness within the organisation. Using an inventory, you determine who the key persons are regarding CO2 reduction within each department. As a result, you do not limit attention for climate issues to a few employees or management level, but embed it in all layers of your organisation.

Whereas the focus in levels 1 to 3 of the Ladder version 3.1 was mainly on reducing the organisation’s own CO2 emissions (scope 1 and 2) without considering how, in step 1 of 4.0 there is more attention for reducing CO2 emissions by saving energy. On this, you should set ambitions and targets. For instance, you can focus on reducing your electricity consumption rather than ‘greening’ your power with Guarantees of Origin (GoOs).

Until now, the CO2 Performance Ladder only focused on reducing emissions of the greenhouse gas CO2. Reductions of other greenhouse gases were optional, but were not required to be included in the audit. For step 1 of version 4.0, you do have to mention emissions of non-CO2 greenhouse gases, such as nitrous oxide and methane, if relevant.

Besides these three additional requirements, there are also a few requirements that are no longer mandatory compared to levels 1 to 3 of version 3.1. For instance, step 1 of version 4.0 no longer requires you to report on your business travel. Also, you are no longer required to participate in collaborations or initiatives.

Step 2: reducing CO2 with the supply chain

Step 2 in version 4.0 is somewhat more difficult to compare with the levels of version 3.1. Due to the focus on scope 3, step 2 is still most similar to levels 4 and 5 of the previous version. Despite this there are a number of differences and additional requirements.

The Step 2 Handbook includes the relevant requirements of step 1. So you do not have to search for these yourself in the Step 1 Handbook.

The main difference compared to levels 4 and 5 of version 3.1 is that at step 2 of version 4.0, you do not have to fully include scope 1, 2 and 3 in your reduction targets. You only work on those emissions where you can make the most impact. So you could end up focussing only on part of scope 1 and 2 or only on scope 3.

What you focus on mainly depends on where in your activities or supply chain the largest emissions are. For instance, if you are a machine builder, the main emissions will be from the suppliers of materials and the use of your machines by your customers, i.e. in scope 3. On the other hand, if you are a steel producer, you will mainly have to work with scope 1 and 2. 

For step 2, you look not only at emissions within your organisation and chain, but also outside it. These emissions are also known as other influenceable emissions (OIEs). These include activities outside the chain that you can influence, such as building with recycled or bio-based materials and sharing energy with a neighbouring organisation. For these OIEs, you only need to analyse them qualitatively for step 2. In other words, you have to indicate whether you can influence them.

For step 2 of version 4.0, you need to look further into the future than before in your ambitions and objectives. Whereas in version 3.1 you only had to set targets for your emissions reduction for the next three years, for step 2 of version 4.0 you have to set targets for the next five to ten years.  

Step 3: Reduce CO2 to zero by 2050

Step 3 is by far the toughest of the three steps. Certification for this step requires a level of ambition higher than any level of version 3.1. What makes step 3 especially challenging is that you have to set a point on the horizon for zero emissions for all scopes: 1, 2 and 3. Here, you are not looking five to ten years ahead as in step 2, but to 2050. For scope 3 in particular, this will be very challenging.

For step 3, you also have to meet the vast majority of the requirements of steps 1 and 2. Again, in the Step 3 Handbook, we have included the relevant requirements from steps 1 and 2. So you do not need to look for these yourself in those Handbooks.

Step 4 is under development

We are currently developing another step on the Ladder, step 4. This step will be reserved exclusively for the absolute front-runners in CO2 reduction. The main difference compared to step 3 is that for step 4, organisations move demonstrably faster towards zero emissions. Organisations must also demonstrate even more concretely how they will achieve their goals and ambitions.

In 2025, a co-creation process will start in which we will discuss the details of step 4 with a number of front-runners in each sector. This step will therefore not be introduced until 2026 at the earliest. As step 4 will be reserved for only a few parties, at least initially, it will not be included as an award criterion in procurement immediately after its introduction.

Transition scheme to version 4.0

With the step classification in the Ladder 4.0, we provide a broad entry level on the one hand (step 1), while at the same time setting a standard which means even the frontrunners will have to roll up their sleeves and get to work. To make the transition from version 3.1 to 4.0 of the CO2 Performance Ladder as smooth as possible, we have developed a transition scheme. This period provides all parties – certified organisations, contracting authorities and Certification Bodies (CBs) – with ample time to familiarise themselves with the new version and make the necessary adjustments.

Read all about the transition scheme.

Scope 1, 2 and 3 emissions

  • Scope 1 emissions

Scope 1 or direct emissions, are emissions emitted from facilities owned or controlled by the organisation, such as emissions from its own gas use (in e.g. gas boilers, combined heat and power plants and furnaces) and emissions from its own vehicle fleet.

  • Scope 2 emissions

Scope 2 or indirect emissions, are emissions that arise from the generation of electricity, heat and cooling and steam in facilities not belonging to the organisation’s own operations, but used by the organisation. These include, for example, emissions released when generating electricity in power plants.

  • Scope 3 emissions

Scope 3 emissions or other indirect emissions, are emissions that occur as a result of the organisation’s activities, but which arise from sources that are neither owned nor managed by the organisation. Examples include emissions arising from the production of purchased materials (upstream) and the use of the work, project, service or supply provided/sold by the organisation (downstream).