A recent blog contributed by Keith Deinert, Global Program Manager, Circular Economy Initiatives at manufacturing solutions provider Jabil, looked at the challenges confronting companies who are seeking to reduce their Scope 3 greenhouse gas emissions. As Deinert points out, organisations are increasingly prioritising the reduction of their scope 3 emissions because of impending carbon taxes and other upcoming regulations. How to achieve this is a different matter entirely.
In the discussion about a company’s greenhouse gas emissions, a distinction is made between Scope 1, 2 and 3 emissions, where Scope 1 refers to all direct emissions from owned or controlled sources; Scope 2 to all indirect emissions from the generation of purchased energy, electricity, heat, and steam; and Scope 3 to all indirect emissions not included in scope 2 that occur in the value chain of the reporting company, including both upstream and downstream emissions. While Scope 1 and even Scope 2 emissions are relatively straightforward to calculate, Scope 3 emissions are notoriously more elusive to grasp, as they are generated across the value chain. This makes it necessary to gather information and to collaborate along that value chain.
Collecting this data - an essential step to gain an accurate measure of current emissions - is a challenging task. Deinert emphasises that to measure the current footprint of an organisation, primary and secondary data should be collected from the various repositories that exist along that organisation's value chain. “In this context, primary data is considered known, specific emissions data for a particular product — meaning your organisation or a supplier can use existing data to calculate exactly how much carbon was emitted throughout the complete lifecycle of a product or commodity or at a specific step in the lifecycle,” he writes. Secondary data is when this figure must be extrapolated from known data or estimated with equations that use emissions factors and energy usage data.
Companies should rely as far as possible on primary data, engaging with their vendors and customers to obtain their actual emissions data instead of using industry averages, says Deinert — “a process that takes time, effort and relationship building”.
After the current footprint has been established, the next step is to compile a heat map - a data visualisation tool that uses colour to determine areas of carbon intensity within the organisation's value chain, enabling these to be addressed in a targeted fashion.
However, reporting standards and regulations are still lacking in this area. This implies that the measurements compiled by an organisation are presented as that organisation sees fit. The dearth of guidance on how to interpret and calculate Scope 3 emissions is an issue that remains to be tackled. Another factor hampering the assessment of the Scope 3 emissions generated by a company is the lack of transparency that exists between supply chain partners.
“There are many legal barriers to sharing certain data outside of an organisation. Without a standardised method for reporting, information security could be a major impediment to reporting and measuring Scope 3 emissions,” Deinert points out. These challenges notwithstanding, the benefits of reducing Scope 3 GHG emissions, he says, offer a considerable return on investment.
