Climate-Related Business Practices
As climate change continues to shape our environment, communities, and markets, we recognize the need to adapt and innovate our business.
We also recognize the trend toward more transparency in financial risk related to climate. As such, we focus on further building our sustainability program through reporting in alignment with the Task Force on Climate-Related Financial Disclosures (TCFD).
Governance
Board Oversight: Our enterprise sustainability program is overseen by the Compliance, Corporate Governance and Sustainability Committee (the “Committee”) of our Board of Directors. This Committee has primary responsibility to review and monitor 3D Systems’ sustainability strategy, environmental, social, and governance priorities with alignment to business strategy, and program progress to drive long-term shareholder value. Additionally, this Committee reviews climate-related risks and activities.
The Committee receives updates at least twice a year on the implementation of and progress against sustainability and climate-related activities from the Chief Administrative Officer. The committee's materials are available to the full board, and the board receives periodic updates on the sustainability program strategy, annual priorities, and program measures.
Management’s Role: The Chief Administrative Officer provides management oversight of the enterprise sustainability program and reports directly to the CEO. Executive sponsors are assigned to our environmental, social, and governance activities to drive program priorities, manage risks, and monitor progress against plans.
Strategy
A climate risk assessment was performed to identify and assess 3D Systems’ climate-related transition risks, physical risks, and corresponding opportunities. Climate risks and opportunities are reviewed periodically with cross functional business leaders.
Risk Management
We engage a third-party climate advisor to document our value chain, review peer risks and opportunities, conduct interviews on value chain segments, and conduct workshops with leaders across various business areas to validate risks and opportunities. This work is aligned with our Enterprise Risk Management activities, focusing on managing risks to achieve our company strategic priorities and objectives.
We assess risk areas throughout our value chain, from activities executed by 3D Systems to those managed by or owned by a value chain partners, including segments such as design, sourcing, materials production, distribution, development, and production.
To understand the impact that climate risks could have on 3D Systems, each climate risk identified is assessed based upon its likelihood, potential impact, velocity, and level of management preparedness. Potential impact to the business is based on increased cost, lost revenue, and brand/reputational impacts. Functional groups with responsibilities across our value chain provide input into the ratings. Our climate risk assessment includes exploring a range of plausible futures and leveraging quantitative and qualitative information to identify potential risks and opportunities. As the transition to a lower carbon economy unfolds, 3D Systems is positioned to provide solutions for our customers to address their sustainability priorities. We regularly assess the resiliency of our operations and logistics to prepare for physical risks and extreme weather events. Prioritized risks and opportunities are reviewed with leadership to assign a risk owner to manage relevant action plans.
Metrics
3D Systems tracks various climate-related metrics, monitoring outcomes to support our strategic and business goals. For more details on the specific metrics please refer to:
3D Systems accounts for emissions from operations under direct operational control in calculating its GHG inventory. All GHG emissions are converted to metric tons (“MT”) of CO2 equivalents (or CO2e) using the 100-year global warming potentials taken from the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6).
3D Systems’ GHG Inventories are calculated based on requirements defined by the World Resource Institute’s (WRI) Greenhouse Gas (GHG) Protocol, including WRI’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard. WRI’s GHG Protocol is the premiere international standard for measuring, managing, and reporting GHG emissions.
The calculation of GHG emissions uses recognized emission factors from The Climate Registry, Intergovernmental Panel on Climate Change (IPCC), and the United States Environmental Protection Agency (EPA). The requirements outlined in ISO 14064-1:2018 are followed, though the GHG Protocol is utilized in cases where the standards conflict. 3D Systems' inventories are third-party verified to ensure emissions calculations are compliant with ISO 1406.