For many years, businesses have been good at measuring scope 1 and scope 2 carbon emissions, however scope 3 emissions are not that straightforward. Businesses’ scope 3 emissions are peoples’ scope 1 and 2 emissions. This is where the complexity arises.
We have detailed a number of key points below, surrounding scope 3 emissions. To watch our in depth webinar, “Scope 3 Emissions: Measure, Manage, Report” click here.
Scope 3 emissions come from 15 categories divided into 2 sources:
- Upstream sources:
- Purchased goods and services
- Capital goods
- Fuel and energy related activities
- Upstream transportation and distribution
- Waste generated in operations
- Business travel
- Employee commuting
- Upstream leased assets
- Downstream sources:
- Downstream transportation and distribution
- Processing of sold products
- Use of sold products
- End-of-life treatment of sold products
- Downstream leased assets
- Franchises
- Investments
Why is Scope 3 important?
One of the key drivers changing the reporting environment is government net zero targets. These targets aim to reduce emissions and achieve net zero across Europe and the UK within a certain timeframe depending on the country. In the United Kingdom, the government has also put in place procurement notices, such as the PPN06/21 last year which requires measurement, management and reporting of prescribed Scope 3 emission activities.
Not only governments are driving the path to achieve net zero targets, but organisations and industries are also setting their own net zero and science-based targets. The water industry in the UK, for example, has a net zero target of 2030. In order to achieve this, apart from measuring their own scope 1 and 2 emissions, they will also need to look down through their supply chain at scope 3. From a brand and reputational point of view, it is essential that businesses don’t short of hitting their targets. ESG (Environmental, Social and Governance) and GRI (Global Reporting Initiative) are playing an active role in this space.
The increased pressure coming from investors and key customers has also been noticeable in the last few years.
Mike Tournier, Carbon Reduction Expert at Achilles explains the reason why scope 3 is becoming so important; ‘considering that a company’s scope 3 emissions often overlap with other companies’ emissions, strategies to reduce scope 3 emissions are particularly fertile ground for opportunities to identify synergies and collaborate.’
Scope 3 emissions: where do I start?
There are a series of steps to follow according to Mike, and these will vary depending on the company size and turnover:
Step 1
Look at the guidance available, including: ISO14064-1, GHG Protocol, science-based targets (SBTi), CDP.
Step 2
Figure out which scope 3 emissions you have to measure and report on, from both upstream and downstream of your company’s activities, because not all of them will be relevant to your business.
Step 3
Decide whether you may need a project team. For a small organisation it may not be needed, however, for larger companies you may want to consider bringing a project team together in order to do a supply chain mapping exercise.
Step 4
Set up your own foundation for success. Within our Carbon Reduce Programme, we have detailed guidance and step by step processes to enable businesses to overcome these complexities and achieve carbon reduce or net zero carbon certification.
Having the ‘how’ and ‘where’ to get started defined at the beginning will help everything else fall into place logically. Speak to a member of the team if you would like to learn how we can help you measure, manage and report on your scope 3 emissions.
