Scope 3 Emissions: Better Understanding and Tackling the Hidden Impact on Climate Change

Introduction – A Detailed View of How Scope 3 Emissions Impact Our Environment and The Measures To Mitigate Them

SNIPPET

Managing Scope 3 Emissions is crucial for organizations aiming to mitigate their environmental impact. These emissions, representing indirect impacts throughout the value chain, constitute a significant portion, often reaching 80-90 percent of a company’s total emissions. Implementing diverse strategies, such as engaging suppliers, promoting sustainability, and reducing business travel, can effectively manage these emissions. Measuring and reporting of those emissions is crucial for accountability and nurturing transparency with stakeholders. Organizations can drive sustainability improvements and contribute to global climate change mitigation efforts by adhering to best practices and setting ambitious decarbonisation targets. Addressing indirect emissions is pivotal to building a more sustainable and environmentally conscious future and remaining steadfastly committed to reaching net-zero.

Gain insights into the effects of indirect emissions on our planet and explore strategies for better management.

A company’s carbon emissions are categorized into three scopes, each varying in complexity for measurement and reporting. The Greenhouse Gas (GHG) Protocol defines these scopes as follows:

• Scope 1: Direct emissions from owned or controlled sources.
• Scope 2: Indirect emissions from the generation of purchased energy consumed by the reporting company.
• Scope 3: All other indirect emissions in a company’s value chain.

Scopes 1 and 2 emissions are relatively easy to measure and report, mostly within a corporation’s operational sphere.

Scope 3 are complex and challenging to determine. Due to this, the decarbonization of entire supply chains presents a major challenge.

Scope 3 are indirect GHG emissions resulting from a company’s operations but originating from sources not owned or controlled by the company. These emissions stem from activities in a company’s value chain, including upstream and downstream processes.

The Greenhouse Gas Protocol categorizes Scope 3 emissions into 15 different categories. These include purchased goods and services, transportation and distribution, waste generated in operations, business travel, and employee commuting. In most cases, S3 emissions constitute most of a company’s total GHG emissions.

Key Insights

Comes From Diverse Places

These emissions come from many sources. They can arise from making raw materials, transporting goods, employees commuting, and even how customers use and dispose of products. Measuring and controlling them is tough because there are so many different sources.

Contributes a Major Share

They often represent a substantial portion of a company’s greenhouse gas output. This is particularly the case in industries such as manufacturing, where many emissions happen before the products even reach the company.

Has a Global Effect

Typically, they have clearly a global impact because they are linked to activities across different countries and regions. That’s why it is important to consider them when addressing climate change issues on a global scale.

Affects Supply Chain Management

To reduce these indirect emissions, companies must collaborate closely with suppliers to cut emissions upstream of their value chain. This may involve adopting greener sourcing practices, enhancing energy efficiency, and minimizing waste.

Product Life Cycle

Companies can also lowerthe emissions by creating more energy-efficient products, promoting product longevity, and encouraging recycling or proper disposal at the end of a product’s life.

Why Organizations Must Address Scope 3 Emission Issues Promptly?

Addressing indirect emissions isn’t just about meeting regulations. It offers several benefits for your organization:

Identifying Risks and Opportunities

By understanding where emissions occur in your supply chain, you can identify potential risks and opportunities related to resources and energy use. It will help you plan and manage costs effectively.

Evaluating Supplier Performance

Scope 3 reporting allows you to assess the suppliers leading in sustainability and identify those that need improvement. This will enable you to make more accurate procurement decisions.

Making Informed Decisions

Primary data on indirect emissions can assist in making informed decisions in procurement, product design, and logistics, leading to more sustainable practices.

Strengthening Supplier Relationships

You can build stronger relationships and promote better engagement by assisting suppliers in implementing sustainability initiatives.

Driving Innovation

Scope 3 reporting encourages the development of innovative solutions for creating more sustainable products.

Employee Engagement

Engaging employees in reducing emissions from business travel and commuting can contribute to overall emission reduction efforts.

Climate Strategy Advancement

Setting Scope 3 carbon reduction or science-based targets can advance your organization’s climate strategy.

Enhancing Brand Credibility

Demonstrating commitment to addressing the emissions can enhance your brand’s credibility among investors, customers, and other stakeholders.

Tackling Indirect Emissions

The climate crisis is a global issue, but its effects will be felt locally. Organizations must act swiftly, follow the advice of experts, invest in remedying the situation, and work towards reducing carbon emissions. This can be done by learning how to measure indirect emissions.

By measuring and sharing your indirect emissions data, you can hold yourself, your employees, and your supply chain accountable.

7 simple steps to tackle indirect emissions better

• Get a clear understanding of how these emissions contribute to your overall carbon footprint.
• Focus your decarbonization efforts where they can have the most significant impact.
• Work closely with suppliers, encouraging them to take action on their emissions.
• Show your dedication to creating healthier communities.
• Involve employees in reducing emissions from business travel, employee commuting, waste, and water.
• Share your comprehensive footprint and progress with stakeholders.
• Support national efforts toward achieving Net Zero emissions.

Measuring and Managing Indirect Emissions

Measuring indirect emissions is vital for organizations aiming to holistically manage their PCF or product carbon footprint. Employing various methods and tools, such as carbon accounting, is crucial for accurately assessing and addressing Scope 3 emissions.

• Clearly define your organization’s objectives concerning Scope 3 emissions.
• Identify which Scope 3 categories are most important for data collection and prioritization.
• Establish the methodology and calculation techniques to be used.
• Gather and organize relevant data from various sources.
• Calculate your standard carbon footprint based on the collected data.
• Verify your results for added assurance.
• Develop plans for reducing emissions.

It is important to keep improving the accuracy of your Scope 3 footprint and reassess when necessary.

Adhere to a structured approach when devising a strategy to control and minimize Scope 3 emissions. Start by defining precise carbon reduction objectives tailored to your organization’s goals. Utilize modeling methodologies to analyze diverse routes to meet these targets effectively.

Establish a comprehensive action plan delineating the necessary steps. Continuously monitor and evaluate your advancements in addressing climate concerns to ensure alignment with your objectives.

Best Practices for Reduction

These are the recommended best practices for managing Scope 3 emissions effectively.

• Encourage suppliers to adopt renewable energy sources and sustainable practices.
• Move towards sustainable product purchases to lessen the environmental impact of the supply chain.
• Implement measures to reduce business travel, such as promoting virtual meetings and using eco-friendly transportation.
• Support and subsidize employee mass transit for reduced emissions from transportation.
• Encourage consumers to use products longer and dispose of them responsibly to promote a circular economy.
• Perform a thorough Scope 3 inventory to pinpoint top emission areas and prioritize reduction efforts.
• Establish ambitious Scope 3 emission reduction targets aligned with climate science goals.
• Work closely with suppliers, particularly those contributing significantly to Scope 3 emissions, to develop greener strategies.
• Transparently report on emission reduction progress to stakeholders to demonstrate commitment to sustainability.

By implementing these practices, organizations can effectively manage Scope 3 emissions, reduce their carbon footprint, drive sustainability improvements, and contribute to global climate change mitigation efforts.

Conclusion

To address the challenges of climate change, organizations must reflect closely on their Scope 3 carbon emissions. A systematic carbon accounting approach can provide a comprehensive view of an organization’s environmental footprint. This understanding guides sustainable decision-making across the value chain and encourages collaboration, risk mitigation, and the pursuit of sustainability objectives. Organizations can drive innovation, realize cost savings, and contribute to a greener future by taking responsibility for emissions beyond their immediate operations.

Accounting for Scope 3 emissions is a key step towards a more sustainable and environmentally conscious world.

Check out CarbonBlock for maximum support.