Until recently, many businesses focused on cutting emissions by reducing energy consumption and improving efficiency in their own facilities. But have you considered the other emissions your company is responsible for throughout your value chain?
By definition, indirect greenhouse gas emissions are beyond your company’s direct control, so reducing them can be a major challenge. But what are Scope 3 emissions, exactly, and how can you tackle them?
What Are Scope 3 Emissions?
Scope 3 emissions, also known as value chain emissions, are all the indirect greenhouse gas emissions not captured by Scope 1 and 2 reporting.
(In case you need a reminder: Scope 1 emissions are direct carbon emissions from sources that you own or control. This includes manufacturing and process emissions, onsite fuel combustion and emissions from company vehicles; Scope 2 emissions are indirect emissions from the use of energy that your organization buys such as electricity, heating and cooling, and steam.)
Scope 3 includes emissions from your suppliers as well as consumers of your products and services (upstream and downstream activities). These indirect emissions often represent the largest portion of your corporate footprint; in some cases, they account for as much as 90% of an organization’s total emissions.
How Can Scope 3 Emissions Be Reduced?
It’s important to measure your Scope 3 footprint to find out where the majority of your emissions come from.
The Corporate Value Chain (Scope 3) Standard and accompanying calculation guidance document were developed by the GHG Protocol to help businesses calculate their indirect emissions in 15 different Scope 3 categories.
This internationally recognized methodology can help you measure your indirect emissions from sources such as goods and services you buy; transportation and distribution (both up- and downstream); waste; business travel and employee commuting; use and disposal of your sold products; and the impact of investments.
For example, if you sell shirts, you will need to consider emissions from the production of the raw material, such as cotton, and its manufacture, followed by packaging, distribution, and delivery. If your employees commute by car, bus or train, or fly to visit customers and suppliers, those are also Scope 3 emissions. The washing and drying of the garment throughout its useful life and, when a customer finally discards the worn-out shirt, the way it is disposed of or recycled also generate indirect emissions.
When you have identified the major sources of indirect emissions in your value chain, you are better placed to begin to focus your efforts – and investment – on reducing them.
How Does Cutting Scope 3 Emissions Fit into Your Corporate Strategy?
The way you choose to tackle Scope 3 emissions will depend on your company’s sustainability goals and your wider corporate strategy. Cutting indirect emissions can help you maximize efficiency in your value chain; redesign products to be lower carbon; or improve your brand reputation, for example.
Measuring your Scope 3 emissions can help identify suppliers who are sustainability leaders and those whose perform less well. By engaging with them and supporting the implementation of sustainability initiatives, you can improve efficiency and cut costs in your supply chain, giving you a competitive advantage and increased margins.
If travel is one of your biggest sources of indirect emissions, you might introduce flexible ways of working and engaging with employees to reduce business travel and commuting; schemes that support walking and cycling to work can also result in a healthier and more productive workforce.
How Does Carbon Offsetting Help Reduce Scope 3 Emissions?
Reducing indirect emissions is a complex task, which can only be accomplished with the agreement and participation of others, and eliminating them completely is almost impossible.
Carbon offset projects, however, can reduce Scope 3 emissions in two ways.
First, by choosing a progressive offset provider such as NativeEnergy, you can invest in a bespoke project that works directly with your supply chain to cut emissions. Ben & Jerry’s has supported projects that lower emissions on farms that supply them with milk, improving the sustainability and resilience of their own supply chain whilst also delivering carbon offsets.
Second, carbon offsets allow you to neutralize the Scope 3 emissions that you can’t eliminate, positioning your business as a conscientious, forward-looking sustainability leader.