Supply Chain Sustainability Reporting Series by Emma Woodberry
Part 2 - Scope 3 visibility and measurement
What is Scope 3 and why is it so complex to measure?
Scope 3 emissions are all emissions not accounted for in Scope 1 and 2 – that is, all emissions which are generated both upstream and downstream of your direct operations. It includes how your products are used once they are no longer in their control, through to their end-of-life treatment. For example, if you’re a t-shirt manufacturer, then the emissions generated when that t-shirt is either thrown away into landfill or recycled will count toward your scope 3 emissions. This is driving more organisations to think about how their product is used, and support and enable customers to engage in circularity to find a second life for their products. If we look upstream, the carbon footprint of our textile suppliers, as well as the transport into our operations is counted towards our Scope 3 too – driving the emphasis on visibility, transparency and supplier collaboration.
This is what makes Scope 3 complex, particularly when we’re looking at physical supply chains. A truly transparent supply chain will have traceability of all raw materials from harvest/extraction to processing and manufacturing, retail and consumption.
How to increase/improve visibility
The complexity of Scope 3 emissions means it has yet to become an embedded focus and activity for most organisations – emerging regulatory requirements will push organisations to put the spotlight on their emissions, and understand where the greatest contributors are in their supply chain. 50% of you told us that Scope 3 emissions are not on your mind yet, but making up over 70% of all emissions, it’s becoming increasingly clear that we need to know how big our Scope 3 footprint is. Customers are starting to place greater importance on aligning themselves with brands who are sustainable and conscious, shifting the need for understanding your emissions from a regulatory and commercial driver to a brand loyalty and reputation driver.
When reporting on your footprint, The Greenhouse Gas Protocol is one of the most common frameworks guiding carbon emissions understanding, measurement and reporting. You can’t accurately report on your wholistic carbon footprint without knowing you Scope 3 emission, and to know these, you must know your supply chain. Without reporting on Scope 3, it’s likely that you're not seeing the whole picture, which can lead to reputational and commercial risks.
How do I measure scope 3?
Measuring scope 3 starts with mapping your supply chain, including upstream suppliers and processes, through to consumer use and end of life. Boundary setting is an important feature in measuring Scope 3 emissions – it allows an organisation to determine how far their own measurement and disclosure of Scope 3 will reach. For example, a t-shirt manufacturer can decide it will include all entities within it’s operational control, to Tier 1 suppliers. From here, you can attribute emissions to the activities within the supply chain and develop an understanding of your Scope 3 emissions.
Now what?
Measuring emissions is the first step to baselining your activity. It’s critical to set targets and develop an action plan in how you will work towards reduction. Once targets are in place, specific reduction activities can be implemented to support overall reduction. These activities and reduction efforts can be reported in an annual Sustainability Report.
Where we can help
At Trace, we can support you in understanding where your Scope 3 emissions come from. Our carbon emissions measurement approach (link to first article) lays out the practical steps to measuring Scope 3 emissions. From here, it’s critical to identify initiatives and programs of work that will support your organisation in reaching targets.
Get in touch today to see how we can help your supply chain sustainability journey.
Emma Woodberry
Senior Manager