What is Scope 3 Emissions

scopes Emissions

The need to efficiently measure and track greenhouse gas (GHG) emissions is at the heart of the decarbonization effort to combat climate change. It has become essential to ensure that carbon and GHG reduction strategies are in place as companies, public bodies, and consumers align with the global sustainable development agenda.

For many organizations, understanding their GHG footprint is a precursor to designing and delivering practical climate solutions. Without this vital information, planning and executing strategies to reduce carbon emissions effectively are likely to be shaped with problems. To combat this and further formulate a standardized approach to GHG reporting, emissions can be classified into three distinct ‘scopes’, defined by the GHG PROTOCOL Corporate Standard, which covers direct and indirect emissions related to a given organization.

scopes 1, 2, 3 Emissions

The GHG Protocol has defined three scopes of emissions. The scopes relate to who ‘owns’ those emissions and the level of control applicable to changing those emission levels at each stage.

Scopes 1 & 2 Emissions

Scope 1 and 2 emissions are a mandatory part of reporting for many organizations worldwide and relate to systems within the reasonable control of an entity, such as onsite fuel combustion, company vehicles, fleeting emissions (Scope 1); and purchased energy (Purchased electricity, heat and steam ( Scope 2).

Scope 3 Emissions

Scope 3 emissions are centered on sources of emissions that are more external to a specific organization, such as those across the supply chain. Scope 3 emissions remain mostly voluntary to report. However, in most cases, the reduction of Scope 3 can have the most significant impact. 

Why should an organization measure its Scope emissions?

Many organizations are ramping up their efforts to report on their carbon and energy emissions. We will continue to see an increase in the requirements associated with managing and auditing emissions through schemes such as TCFD and SECR (particularly for UK companies). Reporting on Scope 1 and 2 is mandatory for many while reporting emissions across the whole value chain will increasingly become harder to avoid.

What are the Benefits of Scope Reporting

Organizations that engage with Scope 1, 2, and 3 reporting can see numerous benefits, including:

  • Improved transparency, customer trust, brand, and reputational enhancement
  • Identification of the climate-maturity of key-value chain players and the ability to identify value chain hotspots and weaknesses
  • A better understanding of exposure to resource, energy, and climate-related risks
  • Lower energy and resource costs
  • Positive engagement with employees and consumers.

Why should an organization measure its Scope 3 emissions?

There are several benefits associated with measuring Scope 3 emissions. Most of their greenhouse gas (GHG) emissions and cost reduction opportunities lie outside their operations for many companies. By measuring Scope 3 emissions, organizations can:

  • Assess where the emission hotspots are in their supply chain;
  • Identify resource and energy risks in their supply chain;
  • Identify which suppliers are leaders and which are laggards in terms of their sustainability performance;
  • Identify energy efficiency and cost reduction opportunities in their supply chain;
  • Engage suppliers and assist them in implementing sustainability initiatives
  • Improve the energy efficiency of their products
  • Positively engage with employees to reduce emissions from business travel and employee commuting.

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