Introduction to Scope 3 Emissions
In this lesson, we’ll provide you with everything you need to know when getting started with the topic of Scope 3 emissions. We’ll start with the basics, explaining what the three different scopes are; with a focus on Scope 3. We’ll also explain why they’re important and what makes them different, as well as information on reporting frameworks and more. By the end of the lesson, you’ll be confident in your basic knowledge of Scope 3, and be ready to move on to more advanced topics.
To enhance transparency and categorize both direct and indirect sources of emissions, the GHG Protocol’s Corporate Standard introduces the concept of emission “scopes”, and there are 3 types.
- Scope 1 emissions – Direct GHG emissions from sources the company/entity owns or controls. Examples include emissions from on-site burning of fossil fuels, emissions from vehicles directly owned by the entity, and fugitive emissions from refrigerants.
- Scope 2 emissions – Indirect GHG emissions from the generation of things purchased by the company/entity, such as electricity, heating, cooling, or steam generated off-site.
- Scope 3 emissions – Indirect GHG emissions that occur as a result of the company/entity’s activities but are not owned or directly controlled by the company. This includes emissions from sources such as the supply chain (upstream and downstream), employee commuting, business travel, waste disposal, and the use of products sold.
What are Scope 3 emissions?
In simple terms, Scope 3 emissions are all the emissions caused by a company’s activities, even if they’re not directly under its control. This includes everything from the supply chain needed to create the product, to how the product is used by the people who buy/use it. For example, a car company’s Scope 3 emissions would include everything from the parts needed to build the vehicles to the emissions created once they are out on the road. For this reason, Scope 3 emissions are some of the hardest to reduce and often represent the largest share of a company’s carbon footprint..
For many businesses, Scope 3 emissions account for more than 90 percent of their carbon footprint.
- In 2019, suppliers reported upstream emissions were 5.5 times greater than operational emissions.
- In 2020, suppliers reported upstream emissions 11.4 times greater than those produced through direct operations.
Why? This is an indication that more suppliers are measuring emissions in their supply chain (known as scope 3 emissions) in line with GHG protocol
(Source Transparency to Transformation: A Chain Reaction CDP Global Supply Chain Report 2020 (February 2021))
Why are they important?
Now that you have an idea of what Scope 3 emissions are, the next important thing to understand is why they matter. To answer this question, you simply have to look at the change in reporting figures from 2019 to 2020, when Scope 3 reporting became more widespread. In 2019, the reported figure for “upstream” emissions was 5.5 times larger than operational emissions, which jumped significantly to 11.4 times greater in 2020. This dramatic difference shows us that by furthering our understanding and reporting of Scope 3 emissions, we gain a far more accurate picture of the true state of carbon emissions, meaning goals and targets can be properly met and tracked.
As mentioned, Scope 3 emissions are perhaps the most difficult to reduce – meaning special care should be taken to ensure you are doing everything possible. For example, ensure that your suppliers are taking careful consideration of carbon emissions, and consider switching if they fail to do so.
