Greenhouse Gas Emissions Calculation

Methodology, 2024

Introduction

Carbon footprint calculation is a key indicator of our climate goals. Starting from 2023, we have calculated the carbon footprint of our company (Sotkamo Silver Oy) following the greenhouse gas protocol (GHG Protocol) of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) and supporting guidelines. We have developed calculation and reporting according to our plans during 2024 and implemented a new improved calculation method.

This methodology is updated annually. We report significant changes in the sustainability report and describe the greenhouse gas inventory in its entirety according to the standards we follow in a separate report.

We are committed to the Paris Agreement's goal of limiting global warming to 1.5 degrees Celsius. We plan to take actions to achieve carbon neutrality by 2035.

Boundaries

ORGANIZATIONAL BOUNDARIES

We follow the principle of operational control in our calculations. This means that we consider greenhouse gas emissions from companies in which we have ownership or operational control. The consolidation principle we follow means that our company has full authority to present and implement our operational policies in the respective operations. With the operational control approach, we record 100% of the emissions from operations over which our company has operational control.

Contractors are a key part of the operations at Sotkamo silver mine. The contractors are committed to complying with our contractual terms, which we monitor. It can be stated that our company has operational control over the contractors' activities on the mine site. It should be emphasized that operational control does not mean that our company has the power to make all decisions regarding the contractors' activities on the mine site. Following the mining industry's general practice, we include the scope 1 and 2 emissions from contractors' activities on the mine site in our own scope 1 and 2 calculations. In scope 3, we include the materials and transportation over which we have control. The calculation takes into account, among other things, the support and equipment of the underground mine, as well as the explosives used in the excavation.

OPERATIONAL BOUNDARIES

Operational boundaries refer to the emission sources that we have considered in our calculations. The purpose of determining operational boundaries is to:

• Identify which emission sources are included
• Classify emission sources to avoid double counting
• Provide stakeholders with more useful information
• Contribute to managing greenhouse gas emission risks and opportunities in the value chain.

The calculation of Silver covers scopes 1 and 2, as well as the material categories in scope 3. Included categories are presented in Table 1.

 

Category	Included	Excluded	Not relevant
Scope 1
Direct process emissions (Explosives)	X
Other direct process emissions	X
Vehicles, machines, and equipment	X
Scope 2
Purchased Heat	X
Purchased Electricity	X
Scope 3 – Upstream
Category 1 - Purchased goods and services	X
Category 2 - Capital goods	X
Category 3 – Fuel- and energy-related activities	X
Category 4 - Transportation and distribution	X
Category 5 - Waste generated in operations	X
Category 6 - Business travel	X
Category 7 – Employee commuting	X
Category 8 - Leased assets			X
Scope 3 – Downstream
Category 9 - Transportation and distribution	X
Category 10 - Processing of sold products		X
Category 11 - Use of sold products		X
Category 12 – End-of-life of sold products		X
Category 13 - Leased assets			X
Category 14 - Franchise			X
Category 15 - Investments			X

 

DATA COLLECTION AND VALIDATION

Primary data is collected on a data sheet from various systems and stakeholders. Data is gathered in accordance with defined organizational boundaries and operational control. Each data point collected is defined by its source, volume, unit, and a description of whether it is measured or estimated data. Primarily, data is collected in metric units (e.g., liters or kilograms). Secondarily, monetary data is used. In 2024, for services, part of the products (non-production necessities and mining equipment), and capital goods, data was collected in monetary terms. Emissions from purchased electricity have been calculated both on a market-based and location-based basis. The emissions have been reported using both methods in accordance with the GHG Protocol.

SELECTION AND VALIDATION OF EMISSION FACTORS

Secondary data is determined for each emission source, and necessary updates are made annually. The selection criteria for emission factors are technology, geographical representativeness, and publication year. Annually updated list of references is part of inventory report.

 

Uncertainties and excluded sources

SCOPE 1

Scope 1 greenhouse gas inventory does not involve significant uncertainties. No material identified emission sources have been excluded from the calculation. No calculable greenhouse gas emissions are generated in the concentrator process.

SCOPE 2

The district heating consumption of one apartment rented by the company is estimated based on area. Its impact on the greenhouse gas inventory is minimal. No significant identified emission sources have been excluded from the calculation.

SCOPE 3 - UPSTREAM

Purchased goods and services (category 1) cover approximately 95% of the procurements made by the company or by contractors under the company's operational control. The emissions share is estimated to be more comprehensive, as identified emission-intensive procurements are included in the calculation. The management of primary data has been developed during 2024, but this will continue in 2025.

Capital goods are entirely calculated using monetary data. Additionally, some investments recorded in fixed assets are considered under other calculation categories following operational control, and not as monetary procurement in category 2.

Business travel is entirely based on conservative estimation.

No significant identified emission sources have been excluded from other upstream categories included in the calculation. Category 9 is excluded from the calculation, as the company has not identified emission sources belonging to this category.

SCOPE 3 - DOWNSTREAM

We have excluded categories 10-12 from the calculation. The company's end products have numerous different scenarios for use, processing, and final use, and it is not possible to accurately assess the emissions resulting from them.

 

Sources

1) THE GREENHOUSE GAS PROTOCOL - A CORPORATE ACCOUNTING AND REPORTING STANDARD REVISED EDITION
2) GHG PROTOCOL SCOPE 2 GUIDANCE - AN AMENDMENT TO THE GHG PROTOCOL CORPORATE STANDARD
3) CORPORATE VALUE CHAIN (SCOPE 3) ACCOUNTING AND REPORTING STANDARD - SUPPLEMENT TO THE GHG PROTOCOL CORPORATE ACCOUNTING AND REPORTING STANDARD
4) SUPPLEMENT TO THE GHG PROTOCOL CORPORATE ACCOUNTING AND REPORTING STANDARD - SUPPLEMENT TO THE CORPORATE VALUE CHAIN (SCOPE 3) ACCOUNTING & REPORTING STANDARD CO2 CH4 SF6 N2O HFCS PFCS PURCHASED ELECTRICITY, STEAM, HEATING & COOLING FOR OWN USE PURCHASED GOODS AND SERVICES CAPITAL GOODS FUEL AND ENERGY RELATED ACTIVITIES TRANSPORTATION AND DISTRIBUTION WASTE GENERATED IN OPERATIONS BUSINESS TRAVEL TRANSPORTATION