This article is provided by BRC Associate Member and Partner, Amber.
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According to the Science Based Targets Initiative (SBTi) when it first launched, only a handful of companies had meaningful Scope 3 targets. Since then, the importance of Scope 3 is on the rise as we approach the UK’s Net Zero goal of cutting carbon emissions by 45% by 2030. What we can see now is an increased focus on gathering and measuring the necessary emissions data to plan for Scope 1, 2 and 3 reduction strategies.
Unsurprisingly, Scope 3 remains the biggest hurdle for businesses, and this blog serves as an overview of the overall challenge of Scope 3 and the value of setting the groundwork early in the process.
How is Scope 3 so different from Scope 1 and 2?
While there are challenging aspects for each one, Scope 3 remains the most difficult to navigate. This is because many aspects of the value chain are out of a business’s direct control and require partnerships to make a full impact. Conversely, the Greenhouse Gas (GHG) emissions associated with Scope 1 and 2 can be controlled and measured directly by the business itself.
Scope 3 encompasses all the indirect up and downstream emissions that occur in a company’s value chain. The GHG Protocol Scope 3 standard is a useful resource available to all businesses embarking on the Scope 3 challenge and was designed to provide guidance on internationally-recognised methodologies used to calculate Scope 3 emissions.
Why is measuring Scope 3 emissions so complex?
Scope 3’s level of difficulty stems from the significant variety in the type of data that needs to be collected and analysed (e.g. supply chain emissions, distribution, business travel and employee commuting), the methodologies to calculate emissions, and the sheer quantity of data points.
One of the main barriers for businesses is that suppliers may not have the resources to support Scope 3 requirements from the outset. However, adopting accurate carbon accounting and management early can put businesses on the right path, allowing for accurate targets to be set and strategies put in place to decarbonise Scope 3.
What role do suppliers play in the Scope 3 challenge?
Suppliers play a crucial role in addressing the Scope 3 challenge. Since Scope 3 emissions encompass all the indirect emissions within a company's value chain, collaboration with suppliers becomes essential. Suppliers are often the primary source of these emissions, whether through the production of raw materials, transportation, or disposal of waste generated. However, obtaining accurate and comprehensive data from suppliers, as well as verifying the methodologies to maintain consistency, could be seen as a significant hurdle.
Conversely, this is also an exciting opportunity and, by building stronger relationships with product suppliers, it becomes easier to collaborate and align goals and strategies to reduce emissions. This can include incorporating sustainability criteria into procurement processes, and even providing resources and support to suppliers to help them measure and manage their emissions.
Is the key to Scope 3 success setting effective Scope 1 and 2 targets?
Successfully managing Scope 1 and 2 emissions lays a strong foundation for tackling the complexities of Scope 3. The processes and systems developed to measure and reduce Scope 1 and 2 emissions can be adapted and expanded to address Scope 3. This includes establishing accurate data-collection methods, regular reporting, and continuous improvement mechanisms.
Developing robust systems and methodologies from the very beginning will lay stronger foundations for success during the most difficult part of the process. It is imperative that the data collected is accurate and that baseline data gives a true reflection of a company’s emissions, as this will shape the target-setting process from start to finish.
Once tangible results are achieved during the Scope 1 and 2 processes, a positive example is likely to be set for suppliers and other stakeholders, and by doing so you are also supporting your supply chain with their Scope 3 – creating a positive ripple effect across your sector.
How powerful can good partnerships be when it comes to Scope 3?
The experience gained in managing Scope 1 and 2 emissions will provide valuable insights and expertise needed to approach Scope 3. This includes understanding the nuances of carbon accounting, identifying effective reduction strategies, and engaging stakeholders. While the Scope 1 and 2 foundations are essential for Scope 3 success, establishing the grounding for effective partnerships should not be overlooked as a major factor in achieving Scope 3 targets. By working together to effectively overcome the challenge as a business community, we all become part of the solution.
How can Amber support?
We offer a range of services that will develop, support and improve your business’s Net Zero strategy. If you are interested in carbon consulting or carbon reduction roadmaps, please get in touch.