Scope 3 emissions – What are they and why are they so important?

12th January 2021

Businesses and governments across the world are drawing up and delivering plans to reach net zero in the coming decades. Our Climate Emergency team are supporting some of them – including London Borough’s and the Environment Agency – with corresponding roadmaps and actions. Part of this conversation is reviewing an organisations’ existing carbon footprint, to do this emissions are frequently divided into three categories, Scope 1, 2, and 3 emissions. We’ve found the third category can often cause confusion so asked our specialist George Beechener to explain how they work and why they’re so important.

Scope 3: Outside of your control, but inside your influence

There are lots of organisations ‘scoping’ out their carbon emissions at the moment to figure out how they can reach net zero, this normally includes looking at:

  • Scope 1 emissions: All direct emissions from fuel consumption under their control e.g. gas consumed in boilers, or petrol consumed in owned vehicles
  • Scope 2 emissions: Emissions from indirect energy consumption. This is usually electricity, but can also include purchased heat and steam.
  • Scope 3 emissions: All other indirect emissions from activities of the organisation, occurring from sources that they do not own or control. Sometimes these are referred to as supply chain emissions, because everything in your supply chain – organizations, people, activities, information, and resources – count.

Scope 3 emissions are important because they are usually the greatest share of an organisations carbon footprint by a significant margin, and also where an organisation has a lot of influence. Imagine, for example, mapping out Scope 3 emissions of a big multi-national supermarket given the huge and complex supply chain for food and packaging – and the rest. It’s also easy to see that where you draw the parameters around these emissions will have a significant impact on your final footprint, and by extension, where you focus on cutting carbon.

A first step to getting to grip with your Scope 3 emissions

We recommend organisations start with a simple hot spot analysis when approaching Scope 3 emissions. This involves looking at what you’re purchasing, either in terms of actual ‘stuff’, or how much you are spending. This is information that organisations usually already have access to, although it might require a bit of digging to get hold of useful data. Then, using government released carbon factors, organisations can estimate the amount of carbon emissions they’re generating associated with areas they’re investing in. For example, for every £1 spent on Health and Social Work the source above estimates this results in 0.34 kgs CO2e emissions. It’s really important to remember that because supply chains are so complex, it’s difficult to be completely accurate when conducting these types of hotspot analysis. For example, the spend-based emission factors within the government guidance are starting to age and are riddled with assumptions. However, they are a good place to start.

The myth – if you can’t measure it you can’t improve it

Business owners, scientists, policy makers, and politicians often quite rightly want to accurately measure a problem before deciding on policies designed to address it, but there is always a balance of collecting detail and taking action. When it comes to the climate emergency, we don’t have the luxury of time, and our circumstances are constantly changing. My colleague Simon Hann a specialist in LCAs (life cycle analysis) recently said “Rather than spending a lot of time going, ‘Well, how bad is it?’ maybe let’s just go, ‘Well, we know enough to know it’s bad. Let’s work on not doing it.’ Much of this is true when it comes to tackling Scope 3 emissions – if a local authority is spending a lot on building new housing, the footprint analysis will show a big proportion of Scope 3 emissions coming from this area, you don’t need more detail to know this will be a barrier to reaching net zero. What is important is to fit the data accuracy to the question you are trying to ask, and sometimes, a simple method is all you need.

Getting detailed

Once you’ve found your hot spots there are several next steps that can be taken to develop your insight, target your interventions and ultimately start to reduce emissions.

If you want to track your scope 3 emissions over time, getting hold of reliable data from your suppliers is a good place to start, and will help to go beyond the simple hot-spot analysis described above. This is going to be particularly important if you have a Science Based Target, as good data quality will add confidence to your progress and reporting.  Opening direct discussions with your supply chain, or at the least, keystone suppliers, is a great place to start down this track. You can also revisit your procurement strategy so future suppliers meet certain criteria or review whether you have the opportunity for contract renegotiation. Starting to build supplier relationships based on sustainability will help to drive good practice through your supply chain, broadening into other priority areas such as resource efficiency and biodiversity protection.

With good data at your finger-tips opportunities for creative thinking start to proliferate. Comparing the impacts of competing low-carbon interventions, weighing up the merits of different material choices, looking at any scope 3 emissions associated with company waste, reporting to customers the benefit of choosing your product or service, or demonstrating to shareholders the progress your organisation is making, all this becomes possible.

At Eunomia we have supported both public and private sector clients answer these questions with expertise in developing a strategy, and building in the detail via procurement, target setting and reporting, behaviour change, training and life cycle analyses. Holistic systems which incorporate some or all of these aspects mean an organisation can reach their environmental aspirations – whatever they may be.