• Graham Harris

The size of your (Scope 3) emissions footprint may surprise you.

The idea behind preparing a greenhouse gas inventory - also commonly known as a 'carbon footprint' - is a simple one. Until you have catalogued and quantified where your emissions are coming from, you can't make a meaningful plan to reduce them, or track your progress in doing so.

One of the most common frameworks for preparing a GHG inventory is the World Business Council for Sustainable Development/World Resources Institute (WBSCD/WRI)'s 'GHG Protocol'. The GHG Protocol, in fact, preceded ISO 10464-1, which is the international standard for GHG inventories and more than 9 out of 10 Fortune 500 companies reporting to the CDP use it to guide their reporting. Users of the GHG Protocol follow a systematic approach to identify sources and sinks of emissions, which are categorized into one of three Scopes.

Scope 1 emissions are direct emissions - ones over which a user has control. Typically, this includes on-site combustion of fuels for heating and hot water, mobile combustion sources (i.e. company vehicle fleets) and fugitive emission leaks from sources such as air-conditioning, process pipes, etc. (Specific industrial sectors may also see direct releases of GHG emissions as a byproduct of chemical reactions used in extraction, manufacturing or processing operations).

Scope 2 emissions are indirect emissions relating to imported energy. For most users, this means electricity from the grid. However, it can also include imported heat or cooling from sources such as district energy systems.

These two Scopes are mandatory to report under the GHG Protocol and have historically been the focus of organizational and facility-level GHG reporting in both regulated and voluntary reporting systems.

The third Scope, Scope 3, covers value-chain emission sources. This Scope is optional to report under the GHG Protocol and covers emissions associated with upstream and downstream impacts from an organization's operations. It can be the most difficult Scope to get to grips with, as by its very nature, this means emissions that are not under the reporting organization's control. Examples of Scope 3 sources are shown in the illustration below (and this is by no means exhaustive!) This can include commuting, business travel, consumption of all sorts of goods and services, waste disposal, etc.

Scope 3 is therefore comprehensive, and for many organizations, Scope 3 is actually larger than Scope 1 or 2 emissions. Thus, without accounting for Scope 3 impacts, the true picture of an organization's impact on the climate is obscured - in the same way that the annual cost of owning a property isn't fully reflected if you only consider the cost of a mortgage (as you also need to consider the cost of home insurance, maintenance, utilities, taxes, etc), the carbon footprint of your operations isn't fully reflected in a Scope 1 & 2 limited GHG inventory.

Failing to account for Scope 3 sources is likely to mean that opportunities for reducing their impact - and, often, reducing associated costs - will go undetected. It's also worth bearing in mind that for some organizations it can actually be quicker, easier and cheaper to reduce certain Scope 3 emissions than Scope 1 or 2. For example, implementing a corporate travel policy that encourages video conferencing over flights, green procurement policies for paper and IT assets, or work-from-home policies to reduce commuting emissions, is likely simpler than trying to address capital-intensive energy efficiency retrofits.

Given the breadth of a Scope 3 inventory, organizations often find accounting for these emissions sources for the first time to be an illuminating and surprising experience! For example, Firefly recently worked with an engineering services firm on their Scope 1, 2 and 3 inventory. Via accounting for Scope 3 emissions from office paper consumption, the company was shocked to discover they were using over 400,000 sheets of office paper each year, at a cost of thousands of $. The same company was also surprised to find out that the emissions associated with purchased IT assets (laptops and desktops) had a larger impact on their GHG footprint than their business travel.

Another Firefly client - a major higher education provider - was used to reporting Scope 1 and 2 emissions but had never previously accounted for Scope 3 sources. They were surprised to discover that 4 of their 5 largest sources of emissions across their operations were Scope 3, and that the two largest - the GHG footprint of their investment portfolio and that of construction emissions - were actually larger than their Scope 1 emissions.

These real-world examples show the importance of including Scope 3 emissions in your organization's carbon footprint - doing so enables decisions to be made with full information, so that you can focus on the most important areas that can have a tangible impact on your GHG emissions. And this, after all, is the point of a GHG inventory.

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