A guide to understanding your scope 3 emissions…
Scope 3 emissions are indirect emissions that occur as a result of activities from assets not owned or controlled by the reporting company, but are of an indirect consequence from the reporting company’s value chain.
Scope 3 emissions are split into both “upstream” and “downstream”emissions. Upstream emissions originate from the production of the reporting company’s product or service. Whereas downstream emissions are associated with the use and disposal of the reporting company’s product or service.
If you are reading this, and unsure what scope 3 emissions activities you should include in your company’s scope of reporting…then this section should help you.
Setting your scope 3 boundary
Your first task… understand your value chain and map it against each scope 3 category.
By utilising the Greenhouse Gas (GHG) Protocol Scope 3 Standard, you can begin to determine which scope 3 categories are relevant to you, or the company you work for. A good way to initially decide which scope 3 categories are relevant to you is by undertaking a heat mapping exercise. This is a great way to hotspot and prioritise which scope 3 categories to focus your efforts on based on a certain set of criteria.
The guidance for undertaking a heat mapping exercise can be found from Page 60 of the Scope 3 Standard... but you will come away with something which looks similar to the following:
Scope 3 data
Typically, scope 3 emissions account for over 80% of a company’s total carbon footprint. However, it is scope 3 emissions that a company will know the least about. Even though scope 3 emissions reporting is deemed as voluntary. It isn’t until recent years that more and more company’s are choosing to include some scope 3 emissions in their emissions reporting and Net Zero Targets.
There are two main blockers when it comes to accounting for and reporting on scope 3 emissions.
- Difficulties around access to the appropriate emissions data, and
- Data accuracy.
When a company decides to account for their scope 3 emissions, they first need to determine what calculation methodology they are going to take. Most of the time, this is determined by what data they actually have access to, and how they will then gather this data.
For each scope 3 category, there are multiple calculation options to choose from. Ranging from the most accurate calculation methodology to the least accurate.
The calculation method you choose, will be determined by what data you have access to.
This diagram below details the different calculation methodologies available for each scope 3 category. From left (most accurate method) to right (least accurate method).
There is a lot to think about when deciding to include scope 3 emissions but, knowledge is power.
Understanding your scope 3 emissions will determine your priority areas as an organisation and then in turn, your reduction pathways. These reduction pathways will propel you into achieving your Net Zero targets and decarbonising your company, and your supply chain.
Having the appropriate tools to help you manage and monitor your scope 3 emissions is so important. If you need support in understanding your scope 3 emissions, please get in touch and book a free demo with us today.