Streamlining Emissions in Wide-Reaching Supply Chains for a More Environmentally Friendly Business Network
In the ongoing battle against climate change, businesses are increasingly focusing on reducing their carbon footprint. One crucial aspect that often goes unnoticed is Scope 3 emissions, indirect emissions that occur in a company's value chain. These emissions, as defined by the Greenhouse Gas (GHG) Protocol, are not included in Scope 2, indirect emissions from purchased energy.
The GHG Protocol separates Scope 3 emissions into 15 different categories to help businesses find and arrange their several sources of indirect emissions. These categories cover a broad spectrum of activities, including upstream activities such as purchased goods and services, capital goods, fuel- and energy-related activities, upstream transportation and distribution, waste generated in operations, business travel, employee commuting, and upstream leased assets.
Downstream activities, such as transportation and distribution of products, processing of sold products, and leased assets owned by customers, are also included in Scope 3 emissions. Ignoring these emissions results in a major piece of the puzzle missing and a great lost chance for influence.
Addressing Scope 3 emissions can lead to lower reputational risk, cost savings, identification of new business opportunities, and promotion of more sustainable behavior among suppliers. Involving suppliers is a methodology for reducing Scope 3 emissions, as is eco-friendly procurement, rethinking product design and innovation to cut lifetime emissions, and shifting customer behavior, particularly in the "use of sold products" category.
End-of-life treatment of sold products is another important aspect of Scope 3 emissions. This includes emissions from the disposal and recycling of products after they have reached the end of their useful life. Franchises are also a category in Scope 3 emissions, encompassing emissions from franchise operations that are not owned or controlled by the company but operate under its brand name.
Investments in other companies, such as equity investments and venture capital, are also part of Scope 3 emissions. By understanding and addressing Scope 3 emissions, businesses can take significant steps towards a more sustainable future, contributing to a healthier planet and a stronger bottom line.
[References] [1] Greenhouse Gas Protocol. (n.d.). Scope 3 Standard. Retrieved from https://www.ghgprotocol.org/scope-3 [2] CDP. (2020). Understanding Scope 3 Emissions. Retrieved from https://www.cdp.net/en/resources/insights/understanding-scope-3-emissions [3] World Resources Institute. (2021). Scope 3 Emissions. Retrieved from https://www.wri.org/resources/guide/scope-3-emissions-accounting-and-reporting-standard
- To combat climate change effectively, businesses need to comprehensively address Scope 3 emissions, which are categorized by the Greenhouse Gas Protocol into 15 distinct areas such as upstream activities, downstream activities, product lifecycle, and end-of-life treatment, among others.
- The approach of involving suppliers in reducing Scope 3 emissions, coupled with eco-friendly procurement, rethinking product design, and shifting customer behavior, can lead to lower reputational risk, cost savings, identification of new business opportunities, and the promotion of sustainable practices.
- By understanding and addressing Scope 3 emissions, businesses can make substantial strides towards a more sustainable future, as they contribute to a healthier planet, reduce environmental impact, and potentially improve their financial standing.
