Managing scope 3 emissions: Frequently asked questions
Verco is a specialist energy and carbon advisory and software business. Our services are designed to support companies transition to zero carbon. Through working with clients, we know that scope 3 emissions is a key topic of interest for businesses wishing to do this. Here are some of the questions we are often asked:
What are the pros and cons of managing scope 3 emissions?
In addition to helping mitigate climate change, benefits can include:
- Managing climate change risks (e.g. impact of future carbon-based legislation and customer/investor expectations)
- Brand impact
- Improving relations with the supply chain
- Providing a platform for innovation and potential efficiency gains through reduced resource intensity across the supply chain.
A key consideration is time and effort to manage the emissions. Compared to reducing scope 1 and 2 emissions, the business case is not automatically enhanced by the reduction in its own energy and resource costs. Engagement across a wider set of internal and external stakeholders will be required, for example colleagues in procurement, marketing, communications, product design and business strategy. It may take time to bring colleagues up to speed on the issues and secure their support. Overall, a greater level of foresight and corporate leadership is required.
How much time and effort is required to manage scope 3 emissions?
A materiality assessment typically takes a few days of analysis. It is greatly facilitated by familiarity with the industry and access to standardised datasets to minimise primary data gathering.
A GHG Protocol compliant scope 3 assessment is a more substantial activity and will probably take a few weeks of analysis over a period of months to complete, depending on complexity and the ease of obtaining data.
Emission reduction pathways, target setting and reporting are more bespoke activities, and can be done to varying levels of detail.
Are scope 3 emissions double counting?
Yes, it is true that scope 3 emissions are simply someone else’s scope 1 and 2. However, corporate leaders are often in a critical position within the value chain to drive change. An extreme example would be a fossil fuel energy supplier switching to renewables (e.g. as Denmark’s Orsted has already done) or car companies switching to producing electric and hybrid vehicles (e.g. Volvo by 2025). Even less carbon-intensive industries can still be hugely influential in driving decarbonisation, such as food / drink manufacturers and property management companies.
How can Scope 3 or value chain emissions be reduced?
Approaches can cover many aspects of a company’s operations. These typically include actions relating to procurement policies, supply chain engagement, product and service design, investment strategy, business models and customer engagement.
For further information on scope 3 emissions and target setting, see our recent webinar:Webinar: The challenge of setting value chain targets
For a free consultation to review your approach to managing scope 3 emissions and how Verco may assist you in your company's journey to net zero, please contact us.