Getting started with Scope 3 emissions
Scope 3 emissions have been compared to the underwater part of an iceberg: they’re hard to see, but impossible to ignore. Scope 3 emissions are likely to form roughly nine-tenths of the emissions generated by the activities of your business, which means that any valid climate strategy has to take them into account.
The problem is that this category of emissions is the trickiest to measure and abate. Unlike Scopes 1 and 2, Scope 3 emissions come from sources that you don’t directly own or control. That is why they are sometimes known as third-party emissions. (For more information on how Scope 3 is defined, take a look at our Scope 3 FAQs.) So how can you start to get a handle on Scope 3?
Start from where you are
Tackling Scope 3 means doing two things: measuring emissions in your value chain and working to reduce them. It is important to understand that your business won’t do either of these things “right” at the outset. The crucial thing is to get started, no matter how flawed your starting point is. Scope 3 is a process of gradual improvement, but fear about doing it “wrong” can put businesses off starting the journey at all.
Split your Scope 3 into categories
The Greenhouse Gas (GHG) Protocol is the internationally recognised standard for reporting on carbon and other greenhouse gas emissions. It is the GHG Protocol that originally created the concept of scopes. The GHG Protocol guidance on calculating Scope 3 emissions divides them into 15 categories, which fall into two bigger categories of “upstream” and “downstream”.
A useful first step is to make a list of all the businesses you work with and decide which categories their emissions fall into. To work it out, place your own company at the centre of the process and look at it from that perspective.
For example, a transport company might take vegetables from a farm to a food manufacturing company. To the farm, the transport company would be Category 9, Downstream transportation and distribution. But to the food manufacturer, the same transport firm would be Category 4, Upstream transportation and distribution. Both are correct from their own perspective.
Identify your Scope 3 hotspots
Getting emissions data from all the businesses in your value chain is a long and sometimes painful process. The good news is that you don’t need all this data to get started on reducing your Scope 3 emissions. Start by working out which of the 15 categories outlined by the GHG Protocol are your highest-emitting areas. Which businesses in your value chain are responsible for most of your Scope 3 emissions?
The spend-based method is a rough and ready way to identify areas of heavy emissions. Look at your spending with a particular supplier or in a particular area. Then multiply it by the emissions factor for that sector. The GHG Protocol has some sector-specific worksheets to help you with this. You won’t get very granular data using the spend method, but it is a useful way to get started because every business has spending information to hand.
Many businesses will find that Category 1, Purchased goods and services, is a Scope 3 hotspot. So this is a good place to start.
Start building relationships
Because your business has no direct control over its Scope 3 emissions, your strategy has to involve working with other businesses in your value chain. The only way to gather the data and make the changes you need is to build relationships. Reaching out to ask partner businesses for their emissions data can be the first step in that process. You may be pleasantly surprised by how many of your partner businesses have already gathered accurate data on their emissions that they are happy to share with you.
This relationship-building is one of the many benefits of beginning to work on Scope 3. Because the process naturally opens up communication channels, you will see stronger working relationships with suppliers, distributors and customers. You will also gain information to help you make better decisions about who to work with in future. The opportunities for learning and strengthening your processes are reason in themselves to begin tackling Scope 3 – even though you definitely won’t have all the answers at first.