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As the global community faces the gravity of climate change, companies are stepping up and taking responsibility for their carbon emissions. However, simply accounting for scope 1 and 2 emissions isn’t enough – it’s critical to also understand the impact of scope 3 emissions. Taking the time to truly understand and address these emissions is crucial in creating a sustainable future for both our planet and our businesses.

While scope 1 and 2 emissions are relatively easy to track and manage, scope 3 emissions can be more difficult to quantify. That’s because they often involve complex supply chains, and they can vary significantly from one company to the next. However, despite these challenges, it’s important to try to quantify your company’s scope 3 emissions so that you can identify opportunities for improvement.

What are Scope 3 Emissions?

Scope three carbon emissions are indirect emissions that result from activities related to your business, but that occur outside of your direct control. This includes things like:

  • Use of raw materials
  • Purchased goods or services
  • Employee Commuting
  • Leased assets
  • Use of sold products
  • Investments
  • Franchises

Because Scope 3 is so general, it can be difficult to precisely measure all the emissions that fall under this category. However, it’s important to try to get an accurate estimate of your company’s Scope 3 emissions so that you can work on reducing them.

Scope 3 emissions can be further broken down into two categories: upstream (purchased goods and services) and downstream (sold goods and services).

How do Scope 3 Emissions Differ from Scope 2 and 3?

The main difference between scope 1, 2, and 3 emissions is that scope 1 and 2 emissions are direct and indirect emissions from a company’s activities, respectively. Meanwhile, scope 3 emissions are more broadly defined and can be harder to track due to their indirect nature.

What are Scope 1 and Scope 2 Emissions?

Scope 1 Emissions: These are direct greenhouse gas (GHG) emissions from sources that are owned or controlled by the company in question. For example, if a manufacturing company uses natural gas to power its factory, the resulting GHG emissions would be considered scope 1 emissions.

Scope 2 Emissions: These are indirect GHG emissions that result from the electricity consumption of a company. In other words, if a company purchases electricity from an outside source—such as the grid—the GHG emissions associated with producing that electricity is considered scope 2 emissions.

So why should a company Track their scope 3 emissions if they are miscellaneous and a challenge to measure?

There are several reasons. Measuring scope 3 emissions can be extremely beneficial for companies, as they will find that most of their excessive greenhouse gas emissions aren’t occurring within their scope 1 or scope 2 emissions. Ultimately, taking the time to accurately measure a company’s scope 3 emissions can lead to opportunities to reduce operational costs while also lowering their carbon footprint.

Other benefits of a company measuring their scope 3 emissions include assessing where the strongest carbon dioxide emissions are being produced in their supply chains, the opportunity to reduce those energy-sucking sectors and seek renewable energy resources instead and improving overall energy efficiency.

Additionally, companies who take the initiative to measure and report on their scope 3 emissions will be viewed favourably by investors and stakeholders alike. This is because such reporting demonstrates a commitment to sustainability and transparency—two qualities that are highly valued in today’s business world.

How Can Auditel Help?

If reading this article about scope 3 emissions has made you interested in reducing your carbon emissions – Auditel can help you! Contact us through our carbon solutions page.