Measuring Scope 3 emissions: the importance and getting started
Scope 3 emissions
Positively, the interest in companies wanting to assess their scope 3 emissions is soaring, largely as a result of the various demands and pressures from suppliers and customers up and down the supply chain.
Whilst scope 1 and 2 emissions largely capture emissions from activities which are owned or controlled by an organisation, such as fuels used in company cars and purchased electricity, scope 3 emissions are a consequence of an organisation’s activities but occur at sources which they do not own or control.
There are 15 categories of scope 3 emissions, ranging from upstream categories such as purchased goods and employee commuting, to downstream categories such as outsourced transportation and distribution, and the use of sold products.
Scope 3 emissions are actually the most difficult for organisations to capture and assess due to the significant amount of data required and the difficulty in accessing. However, they are often the largest source of emissions for companies, making them increasingly important to account for in order to ensure companies fully understand their value chain emissions and the impact.
It is also worth noting that in order for companies to set science-based targets, they need to commit to measuring and reducing their scope 3 emissions, making it an integral part of any businesses journey to net zero and one that should not be overlooked. In addition to this, if a company’s scope 3 emissions account for 40% of their overall emissions, they must also set a scope 3 reduction target.
Define your business goals
Firstly, it is important for a company to define its business goals for carrying out a scope 3 assessment. This will allow companies to prioritise data collection for those categories which are most relevant. It is also worth considering stakeholder interests as these can be equally relevant when deciding priorities.
Assess your value chain
The next step is to map your value chain. Companies should strive for completeness when doing this, but it is acknowledged that 100% completeness may not be feasible. Companies may establish their own policy for mapping the value chain which can include creating a representative, rather than exhaustive, lists of purchased products, sold products, suppliers, and other value chain partners.
Begin initial screening
Frequently, a company will begin with an initial screening assessment across all 15 categories, gathering secondary data first. This is not from specific activities in a company’s value chain, but instead uses industry averages from available databases. Secondary data can be used for filling in primary data gaps, this is useful for minor activities and is the most appropriate choice if the main goal is to readily understand the relative magnitude of various scope 3 activities, identify hot spots, and prioritise efforts in primary data collection. However, it is worth considering that it may not represent the company’s full activities, providing no reflection of operational changes from suppliers and limits the ability to track progress.
Collect your data
After an initial screening assessment, the data quality can be improved by collecting primary data on the areas and key activities that have been prioritized. Primary data is from specific activities within a company’s value chain (e.g., directly from suppliers or customers). Areas to prioritize should be those which are found to be the largest, those with the most opportunities for reduction, and those which are most relevant to business goals.
In some situations, companies may have scope 3 activities they are unable to estimate due to lack of data or other limiting factors, in such cases companies may exclude scope 3 activities from the report, provided the exclusion is disclosed and justified. Companies should follow the principles of relevance, completeness, accuracy, consistency, and transparency when deciding whether to exclude any activities from the scope 3 inventory. Reviewing, collecting, and improving data is an iterative process.
It is suggested to carry out a scope 3 assessment in conjunction with scope 1 & 2, providing you with a full carbon footprint calculation, facilitating you to move forward on your net zero journey and set science-based targets. Should you wish to carry out such assessment, get in touch with our team on firstname.lastname@example.org or call 01756 794 951 who would be more than happy to create a bespoke project proposal.