What are Scope 3 Emissions?

When a business looks at their own carbon footprint, they often shift focus on direct emissions from their operations (Scope 1) and energy consumption (Scope 2), yet the biggest environmental impact usually comes in the form of scope 3 emissions, or; the indirect emissions that occur throughout a business’ entire value chain.

For a business with extensive supply chains or for those who facilitate employee or student transportation like we do, understanding scope 3 emissions and actively reducing them is critical for achieving sustainability goals.

Here we are going to break down what scope 3 emissions are and focus on their significance for organizations looking to reduce their impact on the environment.

Okay, but what exactly are Scope 3 emissions?

Scope 3 emissions are made up of all indirect GHG (greenhouse gas) emissions that occur outside of a business’ control but within its value chain. Such emissions do not come from purchased energy (scope 2) but from activity related to daily business operations, including employee commuting, business travel and supply chain.

Scope 3 emissions fall into two broad categories:

1. Upstream emissions - or related to suppliers and production processes
2. Downstream emissions - or related to customers, logistics and product disposal.

Interesting fact; for many organizations, scope 3 emissions make up over 70% of total emissions; highlighting it as a critical area for focus around sustainability initiatives.

What are examples of Scope 3 emissions?

Scope 3 emissions cover a host of activities; including:

Why are scope 3 emissions so important?

Measuring scope 3 emissions can be complex and time consuming, particularly as they span across multiple suppliers, partners and customer interactions. The GHG Protocol’s Corporate Value Chain Standard is the world’s leading framework for the calculation of these emissions; with 15 categorizations that a business can use to prioritize reduction strategies.

In measuring scope 3 emissions, a business should:

1. Map their value chain so as to identify their significant emissions sources
2. Collate data from suppliers, partners and, where applicable, transport providers
3. Make use of industry benchmarks to approximate emissions where data is unavailable
4. Set rigorous but achievable targets and track your progress over time

How can a business reduce its scope 3 emissions?

Scope 3 emissions reduction requires a collaborative effort between businesses and their suppliers, customers and employees. So what can you do?

Energy Efficient Operations

• Investment in electric fleets; both as a vehicle for logistics and employee transportation
• Optimization of delivery routes to minimize emissions 
• Reduction of carbon-intensive activity across distribution and manufacturing efforts 

Eco-Friendly Product Design

• Development of resilient, energy efficient and recyclable product
• Improvement of packaging to minimize waste and shipping emissions
• Introduction of refurbishment programs to extend a products lifecycle

Sustainable Commuting

• Adoption of shared transportation services to reduce the number of single occupancy vehicles on the road
• Supporting a transition to low-carbon transit options, like EVs, carsharing, vanpools, cycling
• Encouragement of remote or hybrid working, where applicable

Greener Supply Chain

• Carbon reporting requirements for vendor/supplier partnerships
• Prioritizing relationships with suppliers who in turn prioritize sustainable processes and materials
• Mass reduction of waste through circular economy initiatives

Why addressing scope 3 emissions matters?

Scope 3 emissions represent the most challenging and largest aspect of corporate sustainability. Thinking smarter about supplier collaboration, and committing to initiatives that take real action, businesses can make great strides towards decarbonization. 

For businesses looking to make an immediate impact, addressing employee transportation is one of the swiftest and easiest ways to cut down on scope 3 emissions. The implementation of corporate shuttles, as one example, provide an environmentally friendly alternative to cars and help companies meet and exceed green targets while improving employee productivity and satisfaction.

In recognizing and reacting to scope 3 emissions, businesses can make a tangible stride towards net-aero goals and benefit not only the planet, but also their bottom line.

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