Decarbonization Demystified - Scope 3 Emissions

Many companies grabble with scope 3 emissions — what are they and why do they matter?

It’s no secret that climate change is the biggest challenge facing humanity in the 21st century. If we are to overcome this challenge, leaders must increase their efforts towards decarbonization, and businesses must reduce their carbon emissions.

Decarbonization is imperative if businesses want to succeed, and represents a significant competitive advantage.

While many large companies have committed to net-zero emissions, all too often they find themselves lost in a sea of data, unsure of where to start. That’s why we founded Carbmee: to help them achieve their net-zero goals and leverage the relevant data to gain an accurate and detailed picture of their value-chain emissions, so that they can reduce them.

 

The Greenhouse Gas (GHG) Protocol and Scope Emission Classifications

Since value-chain emissions tend to account for ~80% of an industry company’s total emissions, they are the ultimate “nemesis” on the path to bringing corporations closer to net-zero. First, let’s go through scope 1 and 2 before tackling value-chain emissions in scope 3.

The GHG Protocol, upon which Carbmee’s software is orientated, is the most important standard for measuring and managing emissions. It breaks down emissions into three categories (scope 1, 2, and 3) to better understand where they come from, in order to allow companies to work towards decarbonization.

Before we expand on why scope 3 emissions matter so much, let’s delve into the classification behind each scope.

 

Scope 1: Direct Emissions

These are direct greenhouse gas emissions from sources owned or controlled by an organization (i.e. direct emissions from company facilities and vehicles). They include:

  • Boilers and furnace emissions;
  • Transportation emissions;
  • Chemical production emissions from owned or controlled processes.

It’s mandatory to report scope 1 emissions.

 

Scope 2: (Owned) Indirect Emissions

Scope 2 emissions come from electricity, steam, heat, and cooling consumption (i.e., indirect emissions from purchased energy to turn on the lights in your office). The energy consumption counted for scope 2 emissions is related to the end-user, indirectly owned by corporations.

Scope 2 emissions are also mandatory to report.

 

Scope 3: Indirect Emissions (Value-Chain)

Since scope 1 and 2 emissions are mandatory to report, companies have focused on GHG emissions from their operations. But what about the emissions happening outside their walls?

If companies ignore scope 3 emissions — those linked to the company’s operations but not owned by them — they miss out on a crucial step towards successful decarbonization.

Why?

Because scope 3 emissions often represent the most significant production of greenhouse gases. And they are also the hardest to measure since they are outside the company’s operations and direct control.

Scope 3 emissions are naturally complex since they are linked not only to a company’s value-chain but also its entire product life. To give you a brief overview: the GHG Protocol divides them into 15 categories in total, based on:

  • Upstream activities: emissions based on the company’s production. These include business travel, employee commuting, waste generation, supplier transportation, and warehouse emissions.
  • Downstream activities: emissions based on the product consumption and/or consumer side. These include franchises, investment, end-of-life treatment, and client services, to name a few.

Yes, they are hard to measure, but they represent a holistic (and realistic) overview of a product’s actual carbon impact.

Decarbonization: Benefits From Measuring Scope 3 Emissions

Whilst it’s not currently mandatory to report on scope 3 emissions, in committing to sustainability, transparency and decarbonization, companies cannot afford to ignore their substantial impact on their total emissions.

Whilst this is difficult, it is not mission-impossible. In fact, it is swiftly becoming mission-critical.

Carbmee’s environmental intelligence solution offers life-cycle assessment (LCA) linked to an extensive environmental database, helping you to identify and reduce your value-chain emissions.

Carbmee enables companies to save both time and money, by making the decarbonization process visible and actionable — good for the bottom-line, and for the climate.

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