What are Scope 3 emissions, how can they be measured and what benefit is there to the organizations measuring them?

The Greenhouse Gas Protocol – which provides the most widely recognized accounting standards for greenhouse gas emissions, categorizes GHG emissions into three ‘scopes’.

Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the purchase and use of electricity, steam, heating and cooling. By using energy, an organization is indirectly responsible for the release of these GHG emissions. Scope 3 includes all other indirect emissions that occur in the upstream and downstream activities of an organization.

The GHG Protocol’s Corporate Value Chain (Scope 3)

Why should an organization measure its Scope 3 emissions? Measuring Scope 3 emissions has several benefits. For most businesses and public bodies, the majority of their GHG emissions and cost reduction opportunities are outside their operations. Addressing Scope 3 emissions can help advance an organization’s decarbonization and sustainability journey.

Next to meeting changing regulatory requirements, measuring Scope 3 emissions allows businesses to: Assess where the emission hotspots are across their value chain to prioritize reduction strategies; identify which suppliers are leaders and which are laggards in terms of their sustainability performance; inform decision-making across procurement, product development and logistics teams regarding which interventions can deliver the most significant emission reductions; encourage product innovation to create more sustainable and energy-efficient products; advance their climate strategy to create genuine, quantifiable, and visible change; and positively engage with employees to reduce emissions from business travel and employee commuting.

The benefits to public sector organizations

By measuring Scope 3 emissions, in particular those across the supply chain, public sector bodies can – Prioritize decarbonization efforts where they can make the biggest difference; collaborate with suppliers to reduce emissions and demonstrate community-level benefits of supply chain decarbonization; leverage significant buying power to act as a catalyst and drive change; encourage employees to reduce emissions from business travel, commuting, waste, and water; communicate a comprehensive footprint and progress with stakeholders, such as constituents and communities; and contribute to national efforts towards achieving Net Zero.

During the 5th edition of the Sustainable World conclave awards a panel discussion on the scope 3 emissions was chaired by Tanya Singhal, Founder, Mynzo Carbon and Solarise.

Different speakers shared their views on different aspects of scope 3 emissions.

Bipin Odhekar, Head – Sustainability, Marico, said, “In 2015, Marico embarked on the measurement of Scope 3 emissions, revealing that a substantial 80% emanates from raw materials and packaging. Recognizing the integral role of these components in product formulation, we meticulously devised a sustainable packaging strategy encompassing eight diverse facets. Through the implementation of 37 projects, we directed our efforts towards elevating material quality, enhancing design, and fortifying durability, yielding commendable outcomes”.

Sanjay Khare, Vice President-Sustainability, Former Member of the Executive Board-Skoda Auto Volkswagen India emphasized, “We have converted over 18 Gw of solar energy capacity in a huge way that covers 30 per cent of what was permissible, we have also worked on our water methodologies, we are a zero liquid discharge company, we are also zero waste to landfill company and currently we are working on electrification globally we have done it in the U.S, China and European markets but for India, it Is not a cost-effective strategy so we are trying to focus more on value chain in India as 60 per cent of Indian industries comprises of MSMEs and small plants so to tackle that we collaborated with CII and our other  18 partners across India to build a capability on 4 broad areas, decarbonization, Circular economy, health safety and human rights”.

Dr Pradeep Panigrahi, Head – Corporate Sustainability, Larsen & Toubro asserted, “The measurement of Scope 3 emissions presents itself as a formidable task. At L&T, the intricate challenge lies in material consumption, constituting a staggering 90 per cent. Despite the presence of dedicated teams, the impact of personal choices, such as transportation preferences, cannot be overstated. It is imperative for organizations to scrutinize these nuanced choices, aligning individual decisions with the overarching sustainability objectives, for instance, what kind of transport I’m using to come to the office and other small choices also become crucial in that regard.”

Surya Valluri, Chief Sustainability Officer, Grasim Industries highlighting the importance of policy regulation regarding carbon emissions in India said,“ There are a lot of regulatory changes happening regarding carbon emission currently, like C bank and also the government is also proactively taking different measures to keep carbon emissions in check and is continuously working towards carbon emissions roadmap in the country but at the same it all zeros down to how organizations are taking it as ultimately the onus is on the organization to check those boxes without losing significantly on the profit side, so it is a major challenge for firms  to balance on both these aspects especially in today’s competitive era, another aspect is consumer awareness which has increased significantly in recent times, so now as an individual firm we have to take tough choices to redefine actual usage of certain products as a whole”

Tanya Singhal, Founder, Mynzo Carbon and Solarise (chair) concluded by saying, “Inevitably, the pursuit of sustainability demands collaborative endeavours, innovative thinking, and an unwavering commitment to harmonize environmental imperatives with the exigencies of the business realm. I extend my gratitude to all the speakers for illuminating this panel discussion on unlocking Scope 3 emissions”.