Achieving Control Over Greenhouse Gas Emissions in the Extended Supply Chain for a More Environmentally Friendly Business Operation
Scope 3 emissions, as defined by the Greenhouse Gas (GHG) Protocol, are a crucial yet often overlooked aspect of a company's carbon footprint. These indirect emissions occur outside a company's direct control but are a consequence of its operations.
The GHG Protocol categorises Scope 3 emissions into 15 different categories for easier identification and management. These categories encompass all indirect emissions both before and after the company’s direct activities, such as emissions from supplier operations (upstream) and product use or disposal by customers (downstream).
Upstream Scope 3 Emissions
Upstream activities include:
- Purchased Goods and Services
- Capital Goods
- Fuel- and Energy-Related Activities (not included in Scope 1 or 2)
- Upstream Transportation and Distribution
- Waste Generated in Operations
- Business Travel
- Employee Commuting
- Upstream Leased Assets
These activities occur before the company's direct operations and are often harder to manage due to the company having less direct control.
Downstream Scope 3 Emissions
Downstream activities include:
- Downstream Transportation and Distribution
- Processing of Sold Products
- Use of Sold Products
- End-of-Life Treatment of Sold Products
- Downstream Leased Assets
- Franchises
- Investments
These activities occur after the company's direct operations and can significantly impact the environment, particularly in the "use of sold products" category. Teaching consumers how to dispose of goods responsibly and use them more sustainably can help address these emissions.
The Importance of Addressing Scope 3 Emissions
Scope 3 emissions can explain more than 70-80% of a company's total carbon footprint in many industries. Setting specific, quantifiable goals for Scope 3 emission reduction and tracking progress can help businesses adjust their strategies as necessary. Mastering Scope 3 emissions promotes more sustainable and steady behaviour among suppliers, strengthening supply chain resilience.
Involving suppliers in the measurement, management, and reduction of their own emissions can be beneficial. Including environmental criteria in procurement rules can help lower a company's carbon footprint. Rethinking product design and innovation to cut lifetime emissions can also help in reducing Scope 3 emissions.
Gathering data on Scope 3 emissions is often challenging, particularly when estimating emissions from millions of consumers or hundreds to thousands of vendors. However, ignoring Scope 3 emissions results in a significant portion of the carbon footprint being overlooked, reducing a company's ability to influence its environmental impact.
Addressing Scope 3 emissions can lower reputational risk, find cost savings through resource efficiency, and identify new business opportunities. By understanding and addressing Scope 3 emissions, companies can take a significant step towards a more sustainable future.
- In the realm of environmental science, teaching consumers about responsible disposal and sustainable use of products can help mitigate downstream Scope 3 emissions, a significant contributor to a company's carbon footprint in many industries.
- To achieve a more sustainable future, businesses can incorporate environmental criteria in their procurement rules, possibly reducing their carbon footprint by involving suppliers in the measurement, management, and reduction of their own emissions, a strategy typically applied to Scope 3 emissions.
- Financial institutions and businesses can use environmental science to innovate product design, focusing on reducing lifetime emissions and harnessing financial opportunities by addressing Scope 3 emissions, often overlooking yet accounting for a considerable portion of a company's total carbon footprint.
