Scope 3: Worth Tracking?

by | Feb 13, 2013

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Those of you who have a fair degree of familiarity with greenhouse gas (GHG) emissions reporting are likely familiar with Scope 3.  For those of you who are not familiar with Scope 3, here’s a brief overview.

International standards, such as ISO 14064-1, divide GHG emissions into three groups, based on the level of control the subject organization has over them.

Direct Emissions, informally known as Scope 1, are those emissions that occur as the result of activities occurring on premises controlled by the organization or using mobile assets controlled by the organization.  These can include
–natural gas combustion for space heating

–on-site waste incineration

–fuel consumption by company-owned vehicles

In the vast majority of internationally recognized standards, reporting of Direct Emissions is mandatory.

Indirect Energy Emissions, informally known as Scope 2, are emissions occurring offsite as the result of activities which produce energy that is used on-site.  In practice, consumption of electricity purchased from the power grid accounts for almost all Scope 2 emissions reported.  Reporting of Scope 2 emissions is also mandatory in most standards.

Other Indirect Emissions, informally known as Scope 3, in a nutshell, are those emissions not falling into either of the two scopes above.  These are emissions from sources not owned or controlled by the organization, and which do not produce energy used on-site by the organization.  Common examples include

–business travel on commercial airlines

–utility water

–municipal solid waste disposal

–employee commuting

In the majority of cases, reporting of Scope 3 emissions is optional.

So, if reporting of Scope 3 emissions is optional, should you even bother to measure them at all, especially if they’ll make your organization’s GHG footprint larger?  Furthermore, if your organization is purchasing carbon offsets to achieve carbon neutrality (see Carbon Industry Terminology Trouble on our Noesis channel for more information), including your Scope 3 emissions will certainly drive up the cost.  Then, there’s the added effort of measuring these emissions.  So why do it?

Truthfully, for some organizations, measuring and reporting Scope 3 emissions may be both impractical and unhelpful.  However, there are potential advantages, as well.  The following are some points you may want to consider when planning your carbon footprint reporting and reduction strategy.

Utility Water

Water use at your facility can be a great way to give your carbon footprint report exposure to Scope 3 emissions, without grossly increasing your overall carbon footprint.  In North America, access to fresh water in most locations means that water consumption doesn’t incur the high energy use (and associated GHG emissions) associated with desalinization.  The energy intensity associated with wastewater treatment also tends to be low.

Consequently, reporting emissions from utility water allows an organization to expand ownership of its emissions without drastically increasing the overall value.  Moreover, for most organizations, measurement of utility water is relatively simple.  It can usually be accomplished simply by reading water bills or meters.

Business Travel

Inclusion of business travel in your organization’s footprint should be considered more carefully, especially if your organization includes a large team of people who are always on the road.  It has the potential to add several tonnes of carbon dioxide equivalent (CO2e) to your total footprint, largely due to the associated fossil fuel consumption, over which your organization will have little or no control.  That having been said, if GHG reporting for your organization is motivated by shareholder interest or public relations, inclusion of this type of Scope 3 emissions is worth considering, even if it initially makes your footprint larger.

You see, if you’re planning reductions to your GHG emissions, it’s important to have verifiable and justifiable information on what your emissions were before you began implementing reduction strategies.  In most cases, internationally GHG reporting standards require organizations to establish a base year.  People looking at your yearly GHG emission reports later will compare your current emissions with those from your base year, to determine whether your carbon footprint decreased, remained the same, or increased.

So, if you know that you can reduce your business travel emissions by a significant amount, it makes sense to begin reporting them at the outset.  That way, in later reports, you’ll be able to legitimately demonstrate reductions in these emissions.

To that point, there are numerous ways organizations can reduce their business travel footprint.  Companies large and small are leveraging teleconferencing and web technology to replace business trips, thereby eliminating emissions and saving money.  Some companies may also apply logistic principles in order to consolidate several business trips to decrease miles travelled.  Some commercial airlines now offer customers the option of paying a premium to carbon neutralize their flight.  NOTE: In a formal GHG report, carbon neutralization should be kept separate from GHG quantification.

Employee Commuting

In the context of a GHG footprint, employee commuting refers to trips to and from company-owned or operated facilities using a vehicle not owned or controlled by the company.  Examples include personal cars, carpooling, cycling, and mass transit.  This Scope 3 activity is sometimes overlooked.  However, it has the potential to help your organization showcase real reductions with minimal costs, since it involves assets the company doesn’t have to pay for.  Furthermore, tracking employee commuting is an excellent option for companies looking to engage their staff in issues of environmental sustainability.

Many companies use carpool signup boards or preferred hybrid vehicle parking spaces as means to reduce GHG emissions from employee commuting.  The value of these types of initiatives is that they cost the company virtually nothing.  Companies with a dedicated budget for GHG reductions might consider subsidizing mass transit passes.  Some companies are now allowing their employees to work remotely once or twice a week, thereby eliminating the commuting footprint for those days, altogether.

As with business travel, it often makes sense to initially report these emissions, even if they are high, so that you can demonstrate legitimate reductions later.

Also, collecting data on employee commuting isn’t as difficult as it may seem.  Companies with online project management portals can usually collect information from employees on their commuting habits using a communal spreadsheet or an online form.  e3 Solutions offers a PDF form as part of its carbon accounting software, enabling employees to enter and periodically adjust commuting data without even having to log into the system.

Next Steps…

If you’re planning to move forward with any type of formal or public GHG footprint reporting, inclusion of Scope 3 emissions is worth considering.  If this report will be your first, plan on including relevant Scope 3 emissions as part of your organization’s footprint, especially if you are planning reductions.

An important consideration in formal GHG reporting is consistency between years.  If you decide in a later report to include certain Scope 3 emissions that were not included in your base year report, you will be required to go back and account for the same types of emissions that occurred during the base year, and then adjust accordingly.  It can be much more difficult to acquire data on Scope 3 emissions years after the fact, so it’s almost always easier to include them in your very first report.

Finally, when you’ve established legitimate reductions in Scope 3 emissions through successive reports, publish the results.  Not only will you be demonstrating measurable action in reducing your organization’s GHG footprint, but your audience will see how your organization went above and beyond requirements in taking responsibility for its carbon footprint.

J.P. Brown is a Sustainability Analyst with e3 Solutions, a Toronto-based environmental software company.  He also sits on Seneca College’s Environmental Committee, and assisted in the preparation of its Sustainability 2020 whitepaper.

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