EN Official Journal of the European Union C 158/1

Report on the audit of the management by the European Central Bank of its carbon footprint together with the replies of the European Central Bank

2014/C 158/01

CONTENTS

Introduction

Audit scope and approach

Audit findings

Strategies to mitigate carbon dioxide emissions

Reducing carbon dioxide emissions

Compensating for residual emissions

Towards a comprehensive calculation of the carbon footprint

Environmental management tools

European eco-management and audit scheme (EMAS)

GreenBuilding programme

EU Code of Conduct on Data Centre Energy Efficiency

Sustainable Procurement

The ECB's Rules on Procurement

The ECB Business Practice Handbook

The Sustainable Procurement Guideline

Examination of a sample of procurement procedures

Conclusions and Recommendations

Did the ECB define strategies to mitigate its carbon dioxide emissions and did it effectively implement them?

Does the ECB have adequate environmental management tools to support continuous improvement?

Did the ECB set standards for sustainable procurement and have those standards been met?

INTRODUCTION

1. The European Central Bank (hereinafter ‘the Bank’ or ‘the ECB’) and the national central banks of all European Union (EU) Member States together constitute the European System of Central Banks (ESCB). The primary objective of the ESCB is to maintain price stability. The ESCB also supports the general economic policies of the EU with a view to contributing to the achievements of the EU's objectives. For this purpose, the ECB carries out the tasks specified in its Statute (1) and it is responsible for managing its own activities and finances.

2. The European Court of Auditors' (hereinafter ‘the Court’) audit is based on Article 27(2) of the Statute, which provides for an examination of the operational efficiency of the management of the ECB. The audit covers the environmental management of the ECB and focuses in particular on measures to reduce the carbon footprint (2) generated by the operations of the Bank as a public administration.

3. The decision-making bodies of the ECB are the Governing Council and the Executive Board. The Executive Board has overall responsibility for the management of the day-to-day business of the ECB and its resources, including environmental management. It adopts the environmental policy and the environmental governance framework, provides resources and appoints an Environmental Coordinator and an Environmental Officer and signs off and authorises the publication of the ECB's annual Environmental Statement.

4. Article 11 of the Treaty on the Functioning of the EU (TFEU) provides that environmental protection requirements must be integrated into the definition and implementation of the Union's policies and activities, in particular with a view to promoting sustainable development.

5. Union policy on the environment is based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay (3).

AUDIT SCOPE AND APPROACH

6. The Court's audit assessed in 2013 whether, in the period 2008 to 2013, the ECB had a policy to reduce the negative impact of its administrative operations on the environment and whether this policy was effectively implemented (4). The Court examined: — whether strategies to mitigate carbon dioxide emissions had been defined and were effectively implemented; — whether adequate environmental management tools were in place to support continuous improvement; — whether standards of sustainable procurement had been set and were complied with.

7. The audit was based on questionnaires, interviews and an analysis of documents and statistics made available by the ECB. It also included an examination of a sample of procurement procedures.

8. The audit was not a carbon audit, i.e. the objective was not to reperform the calculation of the carbon footprint of the ECB or to verify the accuracy of the underlying data.

AUDIT FINDINGS

Strategies to mitigate carbon dioxide emissions

9. In the light of the principles laid down in the Treaty (see paragraph 5), there are two complementary ways to mitigate the impact of the ECB's carbon dioxide emissions on the environment: (a) as a priority, by reducing those emissions; (b) by compensating for residual emissions through offsetting.

Reducing carbon dioxide emissions

Commitment to reduce emissions

10. According to the most recent version of its environmental policy of June 2013 (5), the ‘ECB is committed to continuously improving its environmental performance and to minimising its ecological footprint by (…) taking measures to reduce carbon emissions in its daily operations (…).’

11. Compared to previous versions (6), some ambiguity has been removed by the wording of this latest version of the environmental policy. Previous versions made the commitment that CO2 emissions caused by the ECB should be reduced but only ‘in principle’.

Reduction targets

12. The ECB has set itself reduction targets in its Environmental Statements. The first target was a 15 % reduction in the total carbon footprint in 2011 compared with the data reported for 2009 (7). For 2013, the ECB had a target to reduce the total carbon footprint by 10 % compared with the data reported for 2011. Neither medium-term (i.e. for 2020) nor long-term targets (i.e. beyond 2020) have been set. Having such targets is important for planning and ensuring sustainability of an organisation's environmental management.

Trends in CO2 emissions

13. 2008 was the first year for which the ECB carbon footprint was reported. Compared to 2008, the ECB managed to reduce its carbon footprint in 2012 in absolute terms (decrease in the overall amount of emissions) despite increased staff numbers. This triggered an even more important reduction in relative terms (per allocated workplace). Table 1 shows the evolution in both absolute and relative terms.

Table 1 — Reduction of CO2 emissions in absolute and relative terms (2008 reporting scope)

2008 2012 Evolution Total emissions (in tonnes of CO2 equivalents) 17 023 9 617 – 43,5 % Number of allocated workplaces 2 140 2 399 + 12,1 % Emissions per allocated workplace (in tonnes of CO2 equivalents) 7,95 4,01 – 49,6 % Source: ECB Environmental Statement 2013, ECA calculations.

14. The reductions achieved to date are to a large extent attributable to the purchase of green electricity (8). Reductions were also achieved with regard to heating and cooling and in the emissions associated with office paper and printed publications. Emissions relating to business travel (by car, train and plane) were at the same level in 2012 as in 2008 (for detailed figures see Table 2 ).

15. The ECB no longer expects to attain the reduction target for 2013 (see paragraph 12) because it considers that it has exhausted the list of technically and financially feasible improvements in its current rented premises. Furthermore, it is anticipating the impact of the increase in staff owing to the new banking supervision tasks.

Compensating for residual emissions

16. Carbon offsetting is a mechanism whereby an organisation compensates for its own carbon dioxide emissions or for a part of them by paying someone for an equivalent carbon dioxide saving made elsewhere in the world, e.g. emission savings made through wind farms that replace coal-fired power plants. If all the emissions that cannot be avoided are offset, an activity can be considered to be carbon neutral (9).

17. According to the ECB's Environmental Statement 2013, offsetting was used for all business travel by train with Deutsche Bahn. With 30,9 tonnes of CO2 in 2012, this represented only a small proportion of the total carbon footprint.

18. With regard to the procurement of international business travel services, the ECB Sustainable Procurement Guideline of December 2012 recommends that the Bank includes the requirement that the successful tenderer compensate 100 % of the greenhouse gas emissions caused by business trips. The Guideline proposes that projects involved in delivering carbon offsets meet the criteria of additionality and permanence, that leakage and double counting are avoided and that offsets are verified by an independent third party verifier.

19. However, the ECB environmental policy does not address the issue of offsetting.

Towards a comprehensive calculation of the carbon footprint

No EU legislation on how to calculate the carbon footprint

20. In the Court's view reliable and complete information on the actual size of an organisation's carbon footprint is an essential precondition for defining and implementing effective mitigation strategies.

21. However, there is no binding EU legislation on how to calculate the carbon footprint of a public administration. In a recommendation adopted on 9 April 2013 (10), the European Commission (hereinafter ‘the Commission’) encourages use of the Organisation Environmental Footprint (OEF) method for measuring or communicating the life cycle environmental performance of public organisations. Users of the OEF method should observe the principles of relevance, completeness, consistency, accuracy and transparency.

The scope of the ECB carbon footprint calculation has been gradually extended

22. The initial scope of the ECB carbon footprint calculation in 2008 covered emissions caused by heating and cooling, the consumption of electrical energy, business travel, and office paper and publications. The 2008 scope has been expanded twice, in 2011 and 2012.

23. Emissions generated by travel of conference participants have been included since 2011. In 2012, the CO2 emissions of the 20 000 external participants in conferences and other events were estimated to amount to some 4 000 tonnes. However, some of these emissions may already have been taken into account by the participants' own organisations, so there is a risk of double-counting. On the other hand, non-conference visitors travelling to the ECB's premises in 2012 (almost 70 000) were not taken into account in the calculation.

24. Emissions resulting from the energy consumption of the external data centre and the cooling agents used at ECB premises have been included since 2012.

25. Table 2 provides a comparison between the initial reporting scope in 2008 and the enlarged scope of 2012.

Table 2 — Emissions by source (2008 vs. 2012 reporting scope)

Emissions from different sources (in tonnes of CO2 equivalents) 2008 2012 Share of the 2012 carbon footprint 2008 scope Heating and cooling 5 495,80 4 871,70 27,4 % Electricity 8 831,50 2 504,90 14,1 % Business travel 1 741,40 1 748,80 9,8 % Office paper and publications 954,30 491,20 2,8 % TOTAL 2008 scope only 17 023,00 9 616,60 54,0 % 2012 enlarged scope Travel by conference participants n.a. 4 059,80 22,8 % Energy consumption by external data centre n.a. 4 085,50 23,0 % Cooling agents n.a. 31,10 0,2 % TOTAL 2012 enlarged scope only n.a. 8 176,40 46,0 % TOTAL 2008 and 2012 enlarged scope n.a. 17 793,00 100 % Source: ECB Environmental Statement 2013, ECA calculations.

Further opportunities to improve transparency, completeness and relevance

26. Under the OEF method recommended by the Commission in 2013 (11), a number of elements are missing from the ECB carbon footprint reporting, most notably emissions caused by staff commuting between home and work and emissions caused by the construction of the NEP building (12).

Environmental management tools

European eco-management and audit scheme (EMAS)

27. According to the Commission, the European eco-management and audit scheme (EMAS) (13)‘is the most credible and robust environmental management tool on the market’ (14). The objective of EMAS is to promote continuous improvements in the environmental performance of organisations.

28. Participation in EMAS is voluntary and those participating ‘may gain added value in terms of regulatory control, cost savings and public image provided that they are able to demonstrate an improvement of their environmental performance’ (15).

EMAS adherence and scope

29. The ECB obtained its first EMAS validation in July 2010 (16) and a revalidation in July 2013. The external environmental verifier confirmed that the environmental policy of the ECB, its environmental programme, its environmental management system and its consolidated Environmental Statement 2013 were in line with Regulation (EC) No 1221/2009 and that there was no evidence of non-compliance with the applicable legal requirements relating to the environment.

30. EMAS has been implemented using existing staff resources (head-count neutral). The financial cost of running EMAS (consultancy, certification, communication activities) is below 100 000 euro per annum.

31. The scope of EMAS comprises all technical and administrative activities at the ECB's main premises in Frankfurt am Main. These include three rented high-rise buildings, i.e. the Eurotower, the former Commerzbank building and the Eurotheum. Taken together they represent a gross surface area of around 133 000 square metres.

32. In addition, the ECB rents space in an external data centre in the Frankfurt area, but it does not fall within the scope of EMAS. CO2 emissions generated by this data centre have been reported, for the first time, in the Environmental Statement 2013.

33. Preparations are under way to apply EMAS at the ECB's new premises. Building work is due to be completed in 2014.

34. On 9 November 2013 the ECB announced its decision to continue to rent the Eurotower, which falls within the scope of EMAS, to house its banking supervision staff (17).

EMAS environmental management programme

35. In anticipation of the move to the new ECB premises, environmental awareness-raising and behavioural change became the main focus of the environmental management programme for the 2012 to 2013 period. It is planned that they will continue to be the main focus as the ECB expects the new premises to meet high technical and environmental standards.

36. Measures related to awareness-raising and behavioural change in the 2012-13 programme were formulated vaguely, e.g. ‘Provide staff with detailed information on sustainability opportunities at work and home’ or ‘Encourage staff to use public transport when commuting to and from work’. Their overall impact is thus difficult to assess.

37. The ECB currently has no reliable information on the use of public transport for commuting to and from work. Transport surveys among staff were conducted in 2008 and in 2012, but did not result in representative data.

38. Another priority in the environmental management programme for 2012 to 2013 is sustainable procurement. This issue is addressed in paragraphs 44 to 56.

GreenBuilding programme

39. In 2005 the Commission's Joint Research Centre (JRC) launched the GreenBuilding programme. The programme aims to initiate energy efficiency investments in non-residential buildings that are clearly profitable, but go beyond the standards imposed by the European building directive and national building codes in force. A ‘GreenBuilding Partner’ (18) has to ensure that new buildings consume 25 % less total primary energy, if economically viable, than required by the building standard in force.

40. In December 2009 the ECB submitted evidence to the JRC that the design of the new ECB premises complied with the 25 % requirement and it was accepted as a GreenBuilding Partner.

41. Moreover, according to the Environmental Statement 2013, the building is expected to be 29 % more energy-efficient than the standard stipulated by the 2007 German energy-saving directive.

42. No definitive information has been published so far as to whether the ECB will require that the standards of the GreenBuilding programme (19) are met when the Eurotower is renovated prior to its occupation by the ECB banking supervision staff (20).

EU Code of Conduct on Data Centre Energy Efficiency

43. The ECB has not signed up to the European Code of Conduct on Data Centre Energy Efficiency that has been promoted by the Commission's Joint Research Centre since 2008. This voluntary code of conduct was created in response to increasing energy consumption in data centres and the need to reduce the related environmental, economic and energy supply security impacts. The aim is to provide data centre operators, customers and owners with information and induce them to reduce energy consumption in a cost-effective manner.

Sustainable Procurement

The ECB's Rules on Procurement

44. The legal framework for the procurement of goods, services and works by the ECB is set out in Decision ECB/2007/5 laying down the Rules on Procurement (21). Environmental characteristics of goods, services and works to be procured are only briefly referred to in this Decision (22). The notion of ‘sustainable procurement’ is not mentioned.

The ECB Business Practice Handbook

45. Internal rules on procurement are set out in the ECB Business Practice Handbook. A commitment is made that the ‘ECB procures goods, services and works in such a way as to have continual and measurable progress in its environmental performance, which is to be achieved by reducing environmental impacts while maintaining economic viability’.

46. The internal rules stipulate with regard to environmental certification that it should always form part of the selection criteria where such certification is relevant.

47. For the ‘most economically advantageous tender’-procedure the internal rules provide the following: ‘Where environmental characteristics of the goods, services or works are important, they should account for a significant part of the total weighting’.

48. This wording would seem to refer to the total number of points awarded for price and quality available under a procurement procedure. However, the Court's audit found that this is not a common understanding and that managers tend to consider points for quality alone to determine the share of environmental characteristics in the weighting. This may lead to cases where environmental characteristics account for less than 5 % of the total weighting for price and quality. In such cases, they are unlikely to have a significant impact on the outcome of the procedure.

The Sustainable Procurement Guideline

49. In December 2012 the ECB's Central Procurement Office (CPO) finalised the ECB Sustainable Procurement Guideline with the objective of supporting the systematic implementation of sustainable procurement activities. The Guideline provides background information, outlines criteria to be applied throughout the purchasing process and proposes a general procedure on how to implement sustainable procurement activities.

50. The Guideline was fine-tuned between 2010 and 2012 during several pilot procurements. It draws largely on the EC's practical recommendations for Green Public Procurement (GPP) which are set out in the handbook ‘Buying green!’ and the ‘GPP toolkit’ (23).

51. The Guideline covers the product and service categories identified as having the most significant environmental impact as regards the ECB's operations; i.e. office supplies/material, IT equipment, cleaning services, catering services, travel to and from the ECB, and premises' operation and maintenance. More categories may be included at a later stage.

52. Sustainable procurement criteria for most of the selected product and services categories are proposed in the annex to the Guideline. Unlike the GPP toolkit, the annex to the Guideline does not offer a choice between basic (‘core’) and more ambitious (‘comprehensive’) criteria but proposes a single set of criteria for each category. The ECB criteria are usually more demanding than the core criteria of the GPP toolkit without fully meeting its comprehensive criteria. In the case of IT equipment, however, the ECB criteria go beyond the comprehensive criteria of the toolkit.

53. The Guideline covers some areas for which no GPP toolkit exists, i.e. office supplies/materials and international travel. On the other hand, some relevant GPP toolkit groups of products and services have not yet been added to the Guideline, notably those for furniture and mobile phones.

The procedure for implementing sustainable procurement

54. Divisions responsible for the procurement of the selected product groups are required to: (a) integrate sustainable criteria into tender documents and the award process including a life-cycle approach; (b) verify compliance with sustainable criteria; (c) collect data on achievements made and report those to the CPO.

55. The overall coordination of sustainable-procurement efforts lies with the CPO. As of 2013, the CPO is to report to the Executive Board on the status of sustainable procurement. This will be done once a year in the context of the year-end procurement monitoring report. Reporting will also take place within the framework of the annual environmental management review.

Examination of a sample of procurement procedures

56. The Court audited a sample of procurement procedures which, according to the Bank, included environmental criteria in the tender documents (24). The examination confirmed that, in 2012, the ECB had started to apply GPP in a more systematic manner. In more than two-thirds of the cases examined, core or comprehensive GPP criteria had been met. However, there was potential for including more procedures in the scope of sustainable procurement, notably with regard to IT equipment and building works.

CONCLUSIONS AND RECOMMENDATIONS

57. The Court found that the ECB has taken steps to reduce the negative impact of its administrative operations on the environment, but further efforts and actions are encouraged.

Did the ECB define strategies to mitigate its carbon dioxide emissions and did it effectively implement them?

58. The ECB has defined strategies which give priority to investments in carbon dioxide emissions reduction rather than using carbon offsetting schemes to compensate for the emissions caused by its administrative operations.

59. Measured against its 2008 baseline, in 2012 the ECB reduced its carbon dioxide emissions by 43,5 % overall and by almost 50 % per allocated workplace.

60. The reductions achieved are largely attributable to the purchase of electricity generated from renewable sources which counts as a zero emission in carbon footprint calculations.

61. Further emission reductions will be more difficult to achieve as the ECB is considerably extending the scope of its activities due to its new role in banking supervision.

62. The initial 2008 scope of the ECB's carbon footprint calculation has gradually been enlarged but some important sources of emissions have not yet been included. Most notably, emissions caused by the commuting of staff between home and office and emissions caused by the construction of the new ECB premises are not known. Such emissions would need to be taken into account using the OEF method, recommended by the Commission, for measuring or communicating the life cycle environmental performance of public organisations.

63. The ECB Sustainable Procurement Guideline of December 2012 recommends, for business travel, the use of climate compensation in accordance with high standards. The ECB's current environmental policy does not address the issue of climate compensation, however.

Recommendations

1. The ECB should continue to reduce CO2 emissions, and define a policy to compensate for residual CO2 emissions.

2. The calculation of the ECB's carbon footprint should be improved by taking into account the guidance provided in the European Commission's Organisation Environmental Footprint (OEF) method.

Does the ECB have adequate environmental management tools to support continuous improvement?

64. The ECB has been registered under the European eco-management and audit scheme (EMAS) since 2010. The scope of EMAS comprises all technical and administrative activities at the ECB's main premises in Frankfurt am Main. EMAS is an effective environmental management tool to support continuous improvement. Preparations are under way to apply EMAS at the ECB's new premises, where building work is due to be completed in 2014.

65. The ECB expects its new premises to meet high technical and environmental standards. It is therefore planned that environmental awareness-raising and behavioural change will continue to be the main focus of the EMAS environmental programme once the move to the new premises has taken place. However, the current measures related to awareness-raising and behavioural change are formulated vaguely and their overall impact is thus difficult to assess.

66. The ECB has adhered to the GreenBuilding programme promoted by the Commission, the objective being that its new premises will consume 25 % less total primary energy than required by the building standard in force. No definitive information has been published on whether GreenBuilding programme standards will also apply when the Eurotower is renovated prior to ECB banking supervision staff moving in.

67. The ECB has not signed up to the European Code of Conduct on Data Centre Energy Efficiency.

Recommendations

3. The ECB should make sure that high standards in terms of energy performance are applied for the renovation of the Eurotower building.

4. As regards activities related to environmental awareness-raising and behavioural change among ECB staff, the EMAS environmental programme should include measurable indicators to assess progress and impact, for example monitoring of the number of staff using public transport for commuting.

5. The ECB should adhere to the European Code of Conduct on Data Centre Energy Efficiency.

Did the ECB set standards for sustainable procurement and have those standards been met?

68. The ECB Decision of 2007 laying down the Rules on Procurement only refers to sustainable procurement when it mentions environmental characteristics of goods, services and works to be procured as a possible award criterion. It does not reflect the ECB's ambition to procure goods, services and works in such a way as to have continual and measurable progress in its environmental performance.

69. Since December 2012 the ECB Sustainable Procurement Guideline is in force with a view to supporting the implementation of sustainable procurement activities through practical advice and systematic reporting.

70. The Court's examination of a sample of procedures confirmed that in 2012 the ECB had started to use environmental criteria in a more systematic manner.

Recommendations

6. The ECB should amend its Rules on Procurement in order to better reflect its commitment to sustainable procurement.

7. The ECB should report on achievements in implementing its Sustainable Procurement Guideline in its annual Environmental Statements.

This report was adopted by Chamber IV, headed by Mr Louis GALEA, Member of the Court of Auditors, in Luxembourg at its meeting of 11 March 2014. For the Court of Auditors Vítor Manuel da SILVA CALDEIRA President

(1) The Statute of the ESCB and of the ECB is a protocol attached to the Treaty.

(2) A carbon footprint is the overall amount of greenhouse gas (GHG) emissions associated with the activity of an organisation. GHG emissions are usually calculated and reported in carbon dioxide (CO2) equivalents.

(3) See Article 191 TFEU.

(4) The Court has also assessed this issue with regard to other selected EU institutions, bodies, offices and agencies and plans to report on the results later in 2014.

(5) Approved by the Management Committee and endorsed by the Executive Board through its publication in the ECB Environmental Statement 2013.

(6) See the ECB Environmental Statement 2010 and the 2012 update of the ECB's Environmental Statement.

(7) This target was exceeded and a reduction of almost 30 % achieved.

(8) Since 2009 the ECB has been using electricity from renewable sources which is accounted for with zero emissions in the carbon footprint calculation. The share of green electricity in total electrical power consumption stood at 65,8 % in 2012.

(9) See the definition provided by the UK Department of Energy & Climate Change in its document ‘A guide to carbon offsetting for the public sector’, version 2, 2011, p. 11: ‘Carbon neutral means that — through a transparent process of calculating emissions, reducing those emissions and offsetting residual emissions — net carbon emissions equal zero.’

(10) OJ L 124, 4.5.2013, p. 1.

(11) See Organisation Environmental Footprint (OEF) Guide, (OJ L 124, 4.5.2013, p. 107).

(12) NEP — New ECB Premises on the site of the Grossmarkthalle.

(13) Regulation (EC) No 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), (OJ L 342, 22.12.2009, p. 1).

(14) See EMAS Factsheet ‘EMAS and ISO 14001: complementarities and differences’.

(15) See recital 8 of Regulation (EC) No 1221/2009.

(16) At the same time the ECB was certified ISO 14001. EMAS includes all the requirements of ISO 14001.

(17) According to the related press release, the ECB's new premises on the site of the Grossmarkthalle will not have sufficient space to accommodate the 1 000 or so additional staff needed for the ECB to carry out its new tasks.

(18) Number of registered buildings throughout Europe as at 18 November 2013: 866.

(19) Existing buildings should consume at least 25 % less total primary energy, if economically viable, after refurbishment.

(20) For the time being, banking supervision staff are housed in another building close to the Eurotower building.

(21) OJ L 184, 14.7.2007, p. 34.

(22) As a possible award criterion, see Article 26(2)(a).

(23) http://ec.europa.eu/environment/gpp/index_en.htm

(24) Eleven procedures drawn from a list of 22 procurement procedures launched between 1 January 2012 and 15 February 2013 where environmental criteria were included or under consideration.