The Rabbit Hole of Scope 3 Emissions

April 15, 2021

So, your company has decided it is time to address your organizational emissions. Scope 1 emissions are straightforward. You have records of your natural gas usage from utility bills and your fleet data—if you have a fleet—should be readily available.  And it is the same for Scope 2  emissions. Your company’s electricity usage is likely on the same utility bill that showed your natural gas usage. Scope 3 is where companies might have a harder time calculating their emissions and things can get challenging. Scope 3 includes everything else not mentioned above and knowing where to start and end can be the biggest challenge for companies desiring to balance their emissions budget.

Finding the data for Scope 3 emissions is often the most cumbersome and daunting aspect of calculating your organization’s GHG footprint. In fact, there are over 15 different categories of Scope 3 in the GHG protocol. For many companies, Scope 3 emissions can be one of, if not the largest aspect of their greenhouse gas emissions footprint. Historically, companies have not been required to report or address emissions outside of their direct emissions. But as more education and discussion about Scope 3 impacts continues, the consensus is that they should no longer be ignored. 

One reason that estimating Scope 3 emissions can be so challenging is that it forces companies to take a deep dive into their supply chain, both upstream and downstream. This leaves many businesses facing the daunting effort of trying to collect data from their suppliers and vendors, which can not only be difficult, but sometimes awkward as not everyone has the same environmental goals. 

Many of today’s top companies are making Net Zero and Carbon Neutrality pledges– which is good news and is helping to lead the way, especially in the voluntary space. It is becoming more and more common for companies to assess the environmental impact and actions of their potential vendors, leading to environmental disclosures and future innovations within many aspects of typical Scope 3 emissions. 

Another new aspect of Scope 3 is the sudden increase in employees working remotely. The global pandemic has forced everyone to change how, and often where, they work. This has forced many companies to determine what aspect of remote employee’s emissions should be accounted for. While video conference fatigue is a real thing, cutting down corporate travel, commuting, and in-person conferences has had an immediate positive impact on GHG emissions. One strategy has been to look at pre-pandemic emissions to set the benchmark for footprinting, but some are predicting a potential major uptick in work-related emissions from previous years due to an increased desire for in-person meetings, events, dining, and travel.

Ultimately, each organization will have a different path to determining its sustainability goals. And, achieving those to make the most impact both now and in the future, will depend on what is important to your company or organization, those who lead it, and its stakeholders. It is going to take a massive effort to achieve the common goal of not warming another 1.5 degrees Celsius globally. Reducing and addressing Scope 1 and 2 emissions must continue to be a priority. But addressing Scope 3 emissions should be just as much a priority, to have a lasting ripple effect outside of your four walls or boundary, which will only help us all achieve our common climate action goals. So, if you still wonder how far down the rabbit hole you should go, we say: as far as you can. 

Source: WRI/WBCSD Corporate Value Chain (Scope 3) Accounting and Reporting Standard (PDF) (152 pp, 5.9MB), page 5.

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