Operators must improve governance in order to minimise Scope 3 emissions

Scope 3 carbon emissions commonly account for over 80% of large operators’ total carbon emissions. For most operators, 80–90% of those Scope 3 emissions come from upstream activities in the supply chain – mainly from Category 1 emissions (purchased goods and services) and Category 2 emissions (capital goods).¹

Unfortunately, Scope 3 emissions produced across the entire value chain are also the most difficult and complex to assess, and the absence of emission transparency through multiple tiers of the supply chain is a huge concern. Many operators do not have the necessary governance structures in place, in terms of emissions, and hence have limited understanding and control in how Scope 3 emissions are generated. This impairs their understanding of the scale of the problem and dramatically impedes their ability to adopt optimal strategies for making reductions.

¹ Scope 1 emissions: direct emissions from owned sources (for example, a company’s facilities, vehicles) as a result of the combustion of fuels (oils, natural gas, gasoline and diesel) on site. 

Scope 2 emissions: indirect emissions from purchased energy, including electricity, heating, steam and cooling. Emissions are generated off-site and are purchased from utility companies or other suppliers. 

Scope 3 emission: all other indirect emissions from a company’s value chain. These emissions come from both upstream activities (in the supply chain) and downstream activities (from the use and disposal of products and services by consumers).