Scope out Scope 3

31st May 2024

Although many organisations focus on scope 1 and 2 emissions, it is vital to factor in scope 3 emissions and use their footprint to drive business change

Scope 3 emissions prove challenging for businesses to map and calculate. However, they often account for more than 90% of an organisation’s carbon footprint. As more businesses than ever are assessing and reducing scope 1 and 2 emissions, the importance of recognising the broader indirect impacts from scope 3 emissions has become crucial. Two of the largest categories of upstream scope 3 emissions tend to be purchased goods
and services (PGS) and upstream transportation and distribution.

As accurate lifecycle assessments are rarely available, spend-based data is often used to calculate emissions from PGS. Although there are inaccuracies and misrepresentation of changing emissions associated with spend data, as an initial screening tool it can prove useful for businesses to understand which products and suppliers make up their biggest areas of spend – and, potentially, emissions. This can provide a basis for a supplier engagement strategy, via educating procurement teams on how to initiate conversations around emissions measurement and reduction opportunities, and with which suppliers.

Transportation data

For businesses importing products globally, gathering accurate data on transportation should be a priority. Ideally, transportation suppliers would provide emissions values associated with delivering a company’s products, and several providers are now able to do this. In the absence of this, tracking distance by transport mode can still provide useful data for understanding which origins/routes are producing most emissions. Analysing this can reveal reduction opportunities: for example, products sent by air produce significantly higher emissions than those shipped by sea. It can also be useful as a decision-making tool for potentially relocating production facilities, or prioritising working with suppliers that can provide emissions data.

Some other upstream categories, although usually smaller in contribution, can be easy wins for businesses as they have more influence over them. This could include identifying business travel patterns, to instigate the introduction of initiatives such as flight levies or company electric vehicles, or calculating an employee commuting baseline, to focus reduction efforts on employee engagement around choosing lower-carbon transport options.

Downstream scope 3 emissions are often hard for companies to relate to business activities, as collating data involves questions about business activities that may never have been asked. For example, what do customers do with our products when they no longer want/need them or they are broken? Rather than relying on consumer recycling rates to estimate emissions, influencing the end-of-life treatment of a sold product can encourage businesses to provide guidance on recycling; consider take-back schemes to reuse parts; or review a business model to lease rather than sell a product. This can not only influence a reduction in end-of-life emissions but also encourages circular economy thinking.

Energy consumption

For those that manufacture or retail energy-consuming products, use of these can be the biggest source of emissions in the footprint. A review of gas boiler manufacturers and resellers identified that over 60% of scope 3 emissions in their footprints resulted from customers burning gas in boilers over the product lifetime. Understanding this impact can alter how manufacturers think about the product efficiency; and, for retailers, it can influence the choice of what to sell – favouring lower-carbon options.

Data related to downstream transportation can improve a business’s understanding of where customers travel from to reach their store or access their service. Understanding transportation types and distances can be useful when thinking about the location of new stores, offices or services.

While not all downstream scope 3 categories are relevant to all companies (for example, franchises often do not feature in published footprints), where categories are applicable, data collated can influence longer-term business strategies – not just in terms of carbon footprint but also product offering, location and investment decisions.

See for further information on transition planning for SMEs.

Susanna Jackson PIEMA is lead consultant, sustainability and ESG, at Beyondly; Helen Sprakes PIEMA is lead GHG verifier and managing director at Environmental Strategies Ltd


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