Best practices for managing and reducing Scope 3 emissions

Scope 3 emissions have a significant impact on the environment, but very little is known about them, and companies are often hesitant to tackle them initially. The UN Global Compact reports that Scope 3 emissions account for 70 percent of the average corporate value chain’s total emissions. 

Bloomberg has also found in their ESG data on 15,000 companies that just 20 percent of these companies disclosed their Scope 3 emissions for the 2020 fiscal year. With all this in mind, it’s clear businesses would benefit from corporate sustainability training to help them overcome the Scope 3 emissions hurdle. 

What are Scope 3 emissions? 

Before we jump into best practices for managing and reducing these emissions, let’s do a small recap in case you are unsure what Scope 3 emissions are. Scope 3 carbon emissions essentially refer to emissions that are not created by the company itself. 

They are not the result of activities from assets controlled or owned by the company but by those that it is indirectly responsible for up and down its value chain. For example, when a company buys, uses, and disposes of products from suppliers. Scope 3 emissions encompass all sources not included within the Scope 1 and Scope 2 boundaries. 

How to calculate Scope 3 emissions 

Assessing greenhouse gas emissions across a complete value chain can be complex, to say the least. Unsurprisingly, for companies just starting to assess their Scope 3 carbon emissions, it can be daunting and difficult to know where to begin. It is also important to keep in mind that there are 15 Scope 3 categories. 

These include upstream emissions created by business partners and suppliers that source, create, and deliver the materials your business uses to create products and services. In addition, downstream emissions from use and disposal and the logistics of your products. 

Although your business should collect data for each of these 15 categories, most of them will not be material to your business. Carbon accounting can help businesses calculate and effectively reduce their Scope 3 carbon emissions. It involves defining which Scopes to account for gathering, organising, and reviewing the emissions and environmental data and then performing carbon calculations. 

One of the most common practices in carbon accounting is establishing a baseline year and then setting science-based targets (SBTs) to reduce emissions compared baseline. However, it is recommended to set separate emissions targets for Scopes 1, 2, and 3 since the steps and process for calculating and reducing each one will differ. Once you have set your target, you can implement initiatives and projects to achieve your goals. 

How to reduce Scope 3 emissions? 

Reducing carbon emissions is one of the best ways to curb greenhouse gas emissions worldwide, thereby, reversing or slowing climate change. These emissions often make up the majority of a company’s emissions and are, therefore, an excellent place to prioritise since reduction will have a significant impact.

However, since these emissions are indirect, companies are often confused or hesitant onhow to address them. In saying that, there are numerous ways, from selecting which vendors or materials to rely on, encouraging suppliers to reduce emissions, and making informed transportation decisions. 

Some common examples include:

• Encouraging employees to commute more responsibly by biking and carpooling
• Manufacturing more energy-efficient products
• Designing durable and recyclable products
• Switching to lower-emission vehicles and fuels
• Avoiding unnecessary travel and making use of efficient modes of transportation
• Purchasing goods with lower ecological footprints 

Ultimately, it is best to start by collecting the necessary data, and the GHG Protocol has developed the Scope 3 Standard to help corporations do exactly that. The framework supports plans to partner with suppliers and customers to address environmental effects within the value chain. Sustainability training can also be vital in enabling you to gauge a strong understanding of all the Scopes and the need to reduce emissions and spotlight the steps you should take. 

Moving forward, these emissions will be critical 

The bottom line is that reducing carbon emissions is critical to driving the transition to net zero. Given that these emissions have such a large footprint, failing to tackle them could prevent our ability to slow the rate of global warming.