What Are Scope 3 Emissions and Why Do They Matter?

In order to understand what scope 3 emissions are, we first need to understand what emissions are in general. Emissions can be defined as the release of pollutants into the atmosphere. There are different types of emissions, and each one has an environmental impact. In this blog post, we will focus on Scope 3 emissions and why they matter.

In order to understand what scope 3 emissions are, we first need to understand what emissions are in general. Emissions can be defined as the release of pollutants into the atmosphere. There are different types of emissions, and each one has an environmental impact. In this blog post, we will focus on Scope 3 emissions and why they matter.

What is a Scope 3 emission?

A Scope 3 emission is any indirect emission that results from activities related to a company or organization. These emissions can come from a variety of sources, such as the production and transportation of materials, waste disposal, employee commuting, and the use of company-owned vehicles.

While Scope 1 and 2 emissions are directly controlled by the company or organization, Scope 3 emissions are more difficult to manage. However, many companies are working to reduce their Scope 3 emissions in order to achieve their sustainability goals.

There are a number of ways to achieve this, such as increasing the efficiency of transportation and logistics operations, investing in renewable energy, and promoting sustainable procurement practices. By reducing their Scope 3 emissions, companies can make a significant contribution to tackling climate change.

What is the difference between Scope 1, Scope 2, and Scope 3 emissions?

Emissions can be classified into three different categories, known as “Scopes.” Scope 1 emissions are those that come directly from a company’s own activities. For example, if a factory burns coal to generate power, the emissions from that coal would be considered Scope 1. One example of Scope 1 direct greenhouse gas is fugitive emissions.

Scope 2 emissions, on the other hand, are indirect emissions that result from the consumption of purchased electricity. So, if that same factory buys electricity from a power plant that runs on natural gas, the emissions from the power plant would be considered Scope 2 (indirect emissions).

Finally, Scope 3 emissions are those that come from other sources in the value chain, such as the transportation and production of raw materials. In other words, they are indirect emissions that are not under the direct control of the company. One such example is supply chain emissions. Reducing Scope 3 emissions can be challenging, but it is important to address them in order to achieve truly sustainable operations.

What are upstream and downstream Scope 3 emissions?

Scope 3 emissions (also called value chain emissions) can come from both upstream and downstream sources. Upstream Scope 3 emissions are those that result from the production of goods and services that an organization uses. For example, if a company buys steel from a supplier, the emissions resulting from the steel production would be upstream Scope 3 emissions for the company.

Downstream Scope 3 emissions are those that result from the use of an organization’s products or services. For example, if a company manufactures cars, the emissions resulting from the car use would be downstream of Scope 3 emissions for the company. 

What is an example of scope 3 emissions?

One example of a scope 3 emission is the indirect emission of greenhouse gases from the consumption of purchased goods and services. For example, when a company uses electricity generated from coal-fired power plants, the emissions associated with the coal combustion are considered scope 3 emissions.

In addition, scope 3 carbon emissions can also result from the use of company-owned or -operated vehicles and from employee commuting. Other examples of scope 3 carbon emissions include Waste Generated in Operations and Upstream Transport and Distribution.

Scope 3 emissions are often more difficult to quantify than scope 1 and 2 emissions, but they can represent a significant portion of a company’s total carbon footprint. Therefore, it is important for companies to consider all sources of their greenhouse gas emissions when setting reduction goals.

How can we reduce scope 3 emissions?

There are a number of ways to reduce scope 3 emissions, and the most effective approach will vary depending on the specific industry and situation. In general, however, there are three main strategies that can be used to reduce scope 3 emissions:

Improving production efficiency

Improving production efficiency is often the most cost-effective way to reduce scope 3 emissions. This can be done through a variety of means, such as implementing new technologies or processes, changing business practices, or increasing waste management and recycling efforts.

By improving production efficiency, businesses can reduce their environmental impact while also saving money. As more businesses adopt these practices, the collective impact will be significant in combating climate change.

Substituting energy sources

Another common strategy for reducing scope 3 emissions is substituting energy sources. This typically involves replacing fossil fuels with cleaner renewable energy sources, such as solar, wind, or hydropower. In some cases, it may also be possible to use low-emission energy sources, such as natural gas.

While this approach can be effective in reducing emissions, it is important to keep in mind that the total emissions from a given product or service may also be affected by other factors, such as the efficiency of the production process. So, substituting energy sources is just one piece of the puzzle when it comes to reducing scope 3 emissions.

Offsets or carbon trading

Finally, offsets or carbon trading can be used as a way to reduce scope 3 emissions. Offsets involve investing in projects that aim to offset emissions elsewhere, while carbon trading entails buying and selling allowances for emitting greenhouse gases.

Both of these approaches can be effective in reducing scope 3 emissions, but they come with their own set of challenges and risks. For example, offsets can be difficult to measure and verify, and there is always the risk that the offset project will not actually reduce emissions as planned. Carbon trading is also complex, and the market for allowances can be volatile.

As a result, any decision to invest in offsets or carbon trading should be made carefully, with a clear understanding of the risks involved. Despite the challenges, however, both offsets and carbon trading can be valuable tools in the fight against climate change.

Conclusion

Scope 3 emissions come from the consumption of goods and services. They can be difficult to quantify, but they can represent a significant portion of a company’s total carbon footprint. There are a number of ways to reduce scope 3 emissions, and the most effective approach will vary depending on the specific industry and situation. However, the most important thing for companies to remember is that they need to consider all sources of their greenhouse gas emissions when setting reduction goals. By doing so, they can develop targeted strategies for reducing their scope three emissions and make a significant impact in the fight against climate change.

FAQs

How do the scope 3 greenhouse gas emissions affect the supply chain?

Scope 3 GHG emissions are those that result from the activities of the company’s value chain but are not directly under the company’s control. These include emissions from purchased electricity, business travel, and the production of goods and services used by the company (e.g., raw materials). It is important for companies to understand their scope 3 emissions and take steps to reduce them. The first step is to calculate their emissions using the greenhouse gas protocol scope 3 calculators. Once emission levels have been calculated, companies can work with their suppliers to reduce emissions throughout the supply chain. By taking these steps, companies can help mitigate their impact on climate change and improve their overall sustainability performance.

What are direct and indirect emissions?

Direct emissions come from a company’s own operations, while indirect emissions come from the company’s value chain. Scope 1 emissions are direct emissions from a company’s own operations, while scope 2 emissions are indirect emissions that result from the company’s energy use. Scope 3 emissions are all other indirect emissions that result from a company’s value chains, such as the GHG emissions that result from space heating and cooling consumed by the company or the GHG emissions that result from the company’s sold products. To avoid double-counting, most companies only report their direct and indirect emissions (i.e., their scope 1 and 2 emissions). However, many businesses also report their scope 3 emissions because they believe it is important to be transparent about all of their emissions sources. Emissions reporting is often based on primary data, but it can also be based on secondary data. Capital goods and purchased goods often have emissions data that can be used to estimate a company’s scope 3 emissions. Additionally, many companies use emission factors to estimate their energy use and calculate their scope 2 emissions.

What is a reporting company?

A reporting company is a business that files emissions reports with the Securities and Exchange Commission (SEC). These businesses are required to disclose their emissions on an annual basis. The reports help to inform investors about the company’s environmental impact and can be used to make decisions about where to invest. Many businesses choose to report their emissions in order to demonstrate their commitment to reducing their environmental impact. Additionally, reporting companies are often able to take advantage of tax incentives and other benefits.

What are the scope emissions of business travel?

Business travel emissions come from a variety of sources, including air travel, ground transportation, and lodging. The most significant source of emissions from business travel is air travel, accounting for approximately 80% of total emissions. Other significant sources include ground transportation (15%) and lodging (5%). To reduce the emissions associated with business travel, companies can encourage employees to use video conferencing and other virtual meeting tools, as well as choose lower-emitting modes of transportation when possible.

ESG | The Report
error: Content is protected !!
Skip to content