Scope 3 emissions represent one of the most significant challenges for businesses to truly decarbonise their environmental impact. These indirect emissions, which come from a company’s value chain, typically account for more than 70% of its carbon footprint. Addressing these emissions is critical and collaboration between manufacturers, suppliers, and other stakeholders is essential.
Why Scope 3 Matters
Scope 3 emissions are often the largest portion of a company’s total emissions. Scope 3 categories like purchased goods and services, and the use of sold products, together represent 84% of reported Scope 3 emissions. Despite their significance, reporting on these emissions is frequently incomplete. Many organizations fail to disclose comprehensive information about their value-chain actions, with only a small fraction able to share detailed supply-chain engagement strategies.
Calculating and Reporting Scope 3 Emissions
At NIVI, we utilize robust carbon accounting standards to measure and report Scope 3 emissions accurately. These standards fall into two main categories: Corporate Carbon Footprint (CCF) and Product Carbon Footprint (PCF). CCF encompasses all GHG emissions generated directly or indirectly by a company's activities, while PCF looks at emissions from a product’s lifecycle - from raw material extraction to disposal. Our methods ensure compliance with standards such as the Greenhouse Gas Protocol, EU Product Environmental Footprint (PEF), and others, providing reliable and comparable results.
Start Reducing Scope 3 Emissions in 3 Steps
To make a real impact, companies must reduce emissions not only within their operations but across their supply chains. This requires a shift in how businesses engage with their suppliers and customers. Reducing Scope 3 emissions involves using procurement as a strategic tool. Companies can affect beyond their immediate operations by demanding greater commitment and transparency from their suppliers.
This approach includes setting sustainability standards, engaging in open dialogues, and requiring suppliers to adopt and report on their own decarbonization efforts. By doing so, businesses create a ripple effect that amplifies their sustainability impact across the entire value chain.
Here's a simple three-step guide to help you get started on creating an impact in your supply chain:
Measure and Identify Begin by measuring your Scope 3 emissions accurately. Identify the main sources within your supply chain, focusing on purchased goods and services, and the use of sold products. Accurate data collection is crucial for understanding the full extent of your emissions.
Engage Your Suppliers Work closely with your suppliers to gather detailed emission data and encourage transparency. Set clear expectations for sustainability practices and collaborate on emission reduction strategies. From our experience, strong supplier relationships are key to achieving significant Scope 3 reductions.
Implement and Monitor Develop and implement targeted strategies to reduce emissions, such as optimizing logistics, choosing sustainable materials, and improving product design. Regularly monitor progress, adjust strategies as needed, and report on achievements to maintain momentum and accountability.
Final Thoughts
Addressing Scope 3 emissions is a critical step in the global effort to combat climate change. By focusing on the supply chain and leveraging procurement power, companies can significantly reduce their carbon footprint and contribute to a more sustainable future. The journey requires innovation, collaboration, and a commitment to transparency and accountability.
At NIVI, we specialize in helping businesses navigate the complexities of reducing Scope 3 emissions. Our expertise in carbon accounting and sustainable supply chain management ensures that your efforts are effective and aligned with the latest standards and best practices.
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