Scope 3 emissions: what all counts and why are they critical?

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Calculating a company's carbon footprint is one of the tasks that comes with changing European legislation and the implementation of the CSRD, which significantly expands mandatory reporting for companies. The legislative requirements respond to the slow pace of implementation of the commitments set out in the Paris Agreement and the accelerating impacts of climate change. The previous article introduced the issue of calculating the carbon footprint of companies in Scope 1 and 2 categories - i.e. emissions that a company can directly influence. So have you won? 

Real impact: Scope 3 emissions as the key to carbon neutrality 

In practice, a firm's carbon footprint, which is calculated in Scope 1 and 2, is only a small part of the total emissions associated with the firm's operations. Scope 3 emissions, the measurement and reduction of which are considered key to achieving carbon neutrality, include all indirect emissions that are associated with a company's operations and its value chain. In most cases, these emissions account for up to 70 percent of a company's total carbon footprint. 

What parameters are essential to monitor? 

Green0meter uses the GHG protocol, which is the most widely used standard to calculate the carbon footprint of companies, to perform calculations for its clients. This standard specifies a total of 15 areas that must be monitored to calculate the carbon footprint. Unlike Scope 1 and 2 emissions, these emissions are associated with a company's activity, but the company does not own or control the sources of these emissions. For ease of reference, it is useful to divide them into input and output emissions. 

Input-related emissions: 

Purchased goods and services - for example, emissions associated with the purchase of office equipment or the extraction of resources needed for production - it is appropriate to separate and account for these categories separately. 

Capital goods: These are the durable final products that a company uses to produce products, provide services or store, sell and deliver goods - for example, emissions associated with the construction of a production hall. 

Transportation of employees to the workplace, business travel, including air travel. 

Waste generated as part of the company's operations. Even landfill waste is a source of powerful greenhouse gases such as methane. 

Transportation of goods within the supply chain.

Activities related to fuel and energy production not covered under Scope 1 and 2.

Emissions associated with outputs:

Investments: calculating the carbon footprint of investments is primarily relevant for financial institutions, however other organisations may include them in their reporting.

Franchises and their operations. 

Leased property and assets. 

Customer use of products or services. This calculates emissions associated with the use of specific products by end users, such as mobile phones during their life cycle 

End of product life cycle: This tracks impacts similar to the "Waste generated by company operations" category - i.e. how the end customer will dispose of the end-of-life product. In the future, this may, for example, provide an incentive for a company to produce products that are easily recyclable. 

Clearly, developing your first Scope 3 company carbon footprint calculation is a much more complex process, where gathering the necessary data is a challenging task. Therefore, we recommend focusing first on a narrower range of stakeholders with significant influence and starting the data collection process gradually. Green0meter thus works with a range of internationally recognised databases of emission factors, whether they are emissions related to energy production or emissions from transport. We can also calculate emissions if you do not receive information from your suppliers of goods or services. Here we use a method based on the analysis of financial data - the cost of the company - which is a less accurate method, but which is the only way for many companies to have a comprehensive view of emissions at the moment.  

 The important thing is to take the first step 

Green0meter guides you through the data collection process, where all the required parameters from the list above are described in detail. Using our platform, expert support from our specialists and artificial intelligence, you can easily produce your first report. We will also make your job easier for large-scale tasks such as surveying employees - for example, if you are interested in a comprehensive overview of your employees' transport and travel emissions.  
Importantly, all data and access to the platform will remain yours. So not only will you be able to monitor and manage your emissions, but also produce additional reports that meet current legislative requirements.

author avatarAuthor: Karel Kotoun

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