Scope 3 Emissions – Definition, Types, and Importance
Scope 3 emissions are all indirect greenhouse gas emissions not included in Scope 1 or Scope 2, arising throughout an organization’s value chain—for example, from suppliers, third-party distributors, the use of sold products, and waste disposal.
Why Understanding Scope 3 Emissions Matters
Scope 3 emissions are a crucial piece of the climate change puzzle, capturing the often-overlooked indirect environmental impacts of an organization’s operations. They were first formally classified and standardized by the Greenhouse Gas Protocol, a widely recognized and adopted framework for measuring and managing greenhouse gas emissions. The framework divides emissions into three “scopes” to help companies understand, quantify, and reduce their environmental footprint. While Scope 1 covers direct emissions from owned or controlled sources (like company vehicles or on-site fuel combustion) and Scope 2 covers emissions from purchased energy, Scope 3 goes much further upstream and downstream.
This broad category encompasses a diverse range of emission sources. These can include everything from the raw material extraction for products, manufacturing processes conducted by suppliers, and transportation logistics arranged by third parties, to the ultimate disposal of products at the end of their lifecycle. It also covers activities like business travel, employee commuting, and outsourced services. Essentially, if activities indirectly connect emissions to a company’s operations, those emissions likely fall under Scope 3.
The importance of these emissions lies in their scale. For many organizations, these indirect emissions represent the majority of their total greenhouse gas profile. Ignoring them would provide an incomplete picture of a company’s true environmental impact. They provide a more complete picture of a company’s true environmental impact. By understanding and addressing these emissions, organizations can identify hot spots of high carbon intensity and engage suppliers and partners in joint improvement efforts. This approach ultimately leads to more sustainable products and services that support long-term climate targets.
Common Sources and Types of Scope 3 Emissions
- Upstream emissions from raw material extraction and manufacturing
- Transportation, logistics, and distribution
- Product use and end-of-life disposal
- Business travel, employee commuting, and outsourced services
Real-World Examples
Retail Example:
A clothing retailer might examine its Scope 3 emissions by analyzing various points in its supply chain. The process involves considering farms where cotton is grown and factories where the fabric is produced. This evaluation also includes examining the ships and trucks that transport garments to stores. The retailer would further analyze disposal or recycling methods for clothing at the end of its useful life. Reductions could be achieved through several measures. For example, the company could encourage suppliers to use renewable energy. Additional actions might involve optimizing shipping routes and educating customers about eco-friendly disposal.
Technology Example:
A tech company producing smartphones might calculate Scope 3 emissions at multiple stages. These could include the mining of minerals for batteries and the assembly of components by a third-party manufacturer. They would also consider the energy consumed while customers use the smartphones. Addressing these emissions might require several strategies. The company could select sustainable suppliers and improve product energy efficiency. They might also implement recycling or buy-back programs.
