What are Scope 3 emissions?

‍Whatis Scope 1 to 3?

"Scopes" refer to the categories of greenhouse gas emissions caused by an organization. These are divided into Scope 1, 2 and Scope 3 emissions. This categorization helps companies to calculate their _carbon footprint and define measures to reduce their emissions.

The scopes were developed in 2001, when the Greenhouse Gas Protocol (GHG) created an international standard for emissions reporting. The clear division into Scopes 1, Scope 2 and Scope 3 enables companies to present a structured and comparable method for calculating and reporting their carbon _footprint. In addition, the GHG Protocol and the scopes are the first uniform standard that is recognized by both companies and environmental organizations. 

What all belongs to Scope 3 emissions?

Scope 3 emissions are often referred to as the largest part of a company's_{carbon footprint}. They are a key factor for companies that want to calculate their carbon footprint and set sustainability targets.

According to the Greenhouse Gas (GHG) Protocol, Scope 3 includes all indirect emissions. These are generated outside the company's own business activities, but are nevertheless part of the company's value chain. A distinction is made between upstream and downstream emissions. In total, these emissions are divided into 15 categories according to the Greenhouse Gas Protocol.

Upstream emissions refer to all greenhouse gas emissions within the value chain. They refer to all emissions that occur before and during the production of a product:

• Purchased goods and services
• Capital goods
• Energy and fuel-related activities
• Waste
• Upstream transportation and distribution
• Shuttle service
• Business trips
• Rented or leased property, plant and equipment

Downstream emissions refer to all greenhouse gas emissions that occur once the product has left the company's possession or control. These include:

• Downstream transportation and distribution
• Use of products sold
• Processing of products sold
• Disposal and treatment of sold products
• Franchise
• Downstream lessors
• Investments

Although Scope 3 emissions are not controlled by the company itself, they can account for the majority of emissions.

How do Scope 3 emissions differ from Scope 1 and 2 emissions?

Scope 3 emissions differ fundamentally from Scope 1 and Scope 2 emissions in terms of their origin and the influence a company can exert on them.

• ‍Scope 1 emissions are direct emissions caused by a company itself. This includes, for example, the combustion of fuels in owned or controlled sources such as air conditioning systems in companies, company vehicles or production processes. These are usually directly measurable and can be reduced through direct measures taken by the company.‍
• Scope 2 emissions are indirect emissions resulting from the generation of purchased energy. This includes electricity, steam, heat or cooling that a company purchases for its operating activities. Companies can influence these emissions, for example by switching to renewable energies or purchasing electricity from _lower-CO₂ sources.

Scope 3 by business sector: what are the differences?

In a manufacturing company, Scope 3 emissions can arise from the production of the materials it purchases, for example. The emissions here are often high, as the materials used in the production processes themselves and the associated energy consumption must be taken into account. In service companies, on the other hand, the largest Scope 3 emissions could result from business trips or employee commuting.

For companies that manufacture and sell air conditioning systems in companies or other products, Scope 3 emissions also include the use and disposal of these products by end consumers. Scope 3 also includes emissions resulting from the use of services , such as banking services or consulting services. In general, processes in the value chain that are outside the company's direct sphere of influence or take place after the sale are more difficult to determine.

Why are Scope 3 emissions so important for the_{carbon footprint}?

Scope 3 emissions are crucial for a holistic understanding and reduction of the_{carbon footprint}. They include indirect emissions along the value chain, which often make up the majority of a company's _carbon footprint. For companies where _carbon accounting is mandatory, it is essential to record and manage these emissions in accordance with standards such as ISO 14064 and the Greenhouse Gas Protocol. The correct calculation and reporting of Scope 3 emissions is essential for the sustainability strategy and compliance with reporting obligations . Tools such as _CO₂ footprint calculators help companies to effectively quantify their Scope 3 emissions.

CSRD: Will Scope 3 become mandatory?

The Corporate Sustainability Reporting Directive (CSRD) makes the calculation and documentation of Scope 3 emissions as well as Scope 1 and 2 emissions mandatory for many companies.

How are Scope 3 emissions measured?

Measuring Scope 3 emissions for a company that wants to calculate its carbon _footprint is done through a detailed analysis of the entire value chain. This involves applying the Greenhouse Gas Protocol, which defines carbon _accounting across 15 categories of Scope 3 emissions. The calculation of these emissions often involves complex data from the entire supply and distribution chain, including the use and disposal of products. 

Effective measures to reduce emissions

To effectively reduce Scope 3 emissions, companies should analyze their entire supply chain in terms of their carbon _footprint. Partnerships with suppliers to promote sustainability, investments in environmentally friendly technologies and the promotion of the circular economy are key measures. Another step is switching to renewable energy and optimizing logistics. In addition, the use of carbon footprint _calculators helps to record emissions and calculate the _carbon footprint. Companies can also work with their customers to increase the sustainability of products and thus reduce _CO₂ emissions along the value chain.

Software for measuring Scope 3 emissions

Software solutions can support companies in this:

• centralize and automate the recording of their emissions
• Comply with reporting standards
• work in a team and across locations
• Save costs and resources through faster implementation .

Planted supports companies with a holistic ESG platform for _carbon accounting, decarbonization and audit-proof CSRD reporting. The calculation of the carbon _footprint to record the scopes is intuitive within the software, is based on the GHG Protocol and is certified by TÜV Rheinland. With a personal team of experts, Planted also helps companies to reduce their internal emissions.

Would you like to get to know our software solution without obligation? Book a free demo and start your journey towards Net Zero.