Scope 3 emissions
Scope 3 emissions refer to all indirect emissions that occur in a company’s value chain. These emissions are a result of activities from assets not owned or controlled by the reporting company, but that the company indirectly impacts in its value chain. They can be both upstream and downstream emissions, making them a complex and critical component of a company’s carbon footprint.
Understanding emissions scopes
Before we delve into the specifics, it’s essential to understand the broader context of emissions scopes. These are categories defined by the Greenhouse Gas Protocol, a widely used international standard for understanding, quantifying, and managing greenhouse gas emissions.
There are three ‘scopes’ of emissions: Scope 1, Scope 2, and Scope 3. Each scope represents a different type of emission, and together, they provide a comprehensive view of a company’s total greenhouse gas emissions.
Scope 1 Emissions
Scope 1 emissions are direct emissions from owned or controlled sources. For example, if a company owns a factory that burns fossil fuels for energy, the emissions from that burning are Scope 1 emissions. These are the most direct forms of emissions and the ones that a company has the most control over.
Reducing Scope 1 emissions often involves changes to the company’s own operations, such as improving energy efficiency or switching to renewable energy sources.
Scope 2 Emissions
Scope 2 emissions are indirect emissions from the generation of purchased energy. This includes electricity, steam, heating, and cooling consumed by the company. While the company does not directly produce these emissions, they result from its energy consumption.
Reducing Scope 2 emissions typically involves changes to a company’s energy procurement practices, such as purchasing renewable energy or investing in energy-efficient technologies.
Scope 3 emissions in detail
Now that we’ve covered the basics of emissions scopes let’s delve into the specifics. As mentioned, these are all the other indirect emissions in a company’s value chain.
Scope 3 emissions can be a significant part of a company’s carbon footprint, often far exceeding the emissions from the company’s direct operations. They can also be the most challenging to calculate and reduce due to their complex and far-reaching nature.
Types of Scope 3 emissions
According to the Greenhouse Gas Protocol, scope 3 emissions can be divided into 15 categories. These categories cover a wide range of activities, from the extraction and production of purchased materials to the use of sold products and services to the end-of-life treatment of sold products.
Each category represents a different part of the company’s value chain and provides a distinct opportunity for emissions reduction. Understanding these categories is crucial for companies looking to reduce their overall carbon footprint.
Calculating Scope 3 Emissions
The Greenhouse Gas Protocol provides detailed guidance on calculating Scope 3 emissions, but it often requires significant data collection and analysis.
These are important to understanding and reducing a company’s total carbon footprint. It provides a comprehensive view of the company’s impact on climate change and helps identify opportunities for emissions reduction.
Importance of Scope 3 emissions in sustainability
Scope 3 emissions are a critical component of sustainability for several reasons. First, they often represent the largest portion of a company’s carbon footprint. Ignoring these emissions can lead to a significant underestimation of a company’s impact on climate change.
Second, these emissions provide a comprehensive view of a company’s value chain. This can help identify opportunities for emissions reduction that might be overlooked if only direct emissions are considered.
Corporate responsibility
Managing Scope 3 emissions is a key part of corporate responsibility. Companies can demonstrate their commitment to sustainability and climate change mitigation by taking responsibility for these emissions.
Moreover, managing Scope 3 emissions can also provide business benefits. It can lead to cost savings through improved efficiency and enhance a company’s reputation with customers, investors, and other stakeholders.
Regulatory compliance
Regulatory requirements for reporting and reducing greenhouse gas emissions are increasing worldwide. In many cases, these requirements include Scope 3 emissions.
By proactively managing these emissions, companies can stay ahead of regulatory changes and avoid potential penalties. It can also provide a competitive advantage in a business environment that is increasingly focused on sustainability.
Reducing Scope 3 emissions
Reducing Scope 3 emissions can be complex due to the wide range of activities and sources that need to be considered. However, there are several strategies that companies can use.
These strategies often involve working with suppliers, customers, and other stakeholders to improve efficiency and reduce emissions throughout the value chain. They can also involve changes to the company’s operations and products.
Supplier engagement
Engaging with suppliers is one of the most effective strategies for reducing Scope 3 emissions. This can involve working with suppliers to improve their own emissions performance or selecting suppliers based on their emissions performance.
Supplier engagement can lead to significant emissions reductions and other benefits such as cost savings and improved supplier relationships.
Product design and use
Another strategy for reducing Scope 3 emissions is to consider the impact of emissions on the company’s products. This can involve designing more energy-efficient products or using fewer materials.
It can also involve educating customers on how to use the products in a way that reduces emissions.