Scope 3 carbon emissions, which make up the majority of an organization’s greenhouse gas (GHG) emissions, are the result of indirect activities that occur in a company’s supply chain. Because they’re not directly under a company’s control, there are misconceptions that companies can do little to make a positive impact on that class of emissions.
I have a different view.
While the effort may be more challenging than Scope 1 and 2 reporting, there are many things a company can do to reduce Scope 3 emissions.
The World Resource Institute’s Greenhouse Gas Protocol breaks down Scope 3 into 15 categories covering an organization’s upstream and downstream activities. They include purchased goods and services, waste generated from operations, employee commuting, and the processing of sold products, to name a few. Not every category is relevant to all organizations, so your first task is to determine your baseline.
To start, collect data related to your Scope 3 activities in all relevant categories and determine the most appropriate emission factors to apply to these activities. Once your initial baseline is known, develop an action plan that outlines areas for improvement and how you will implement changes. Continue to refine your calculation methodology, striving for use of primary data wherever possible.
You’ll need to think differently about your manufacturing processes and logistics decisions, resulting in changes to the way in which raw materials are acquired and products are packaged. Following are some practical steps that you can take.
Collaborate with suppliers. Companies must actively engage and collaborate with suppliers to align on sustainability goals. You need to set clear expectations and joint targets. With a strategy in place, emission reductions become measurable and achievable. Such improvements made by suppliers are then reflected in an organization’s Scope 3 accounting.
Encourage your suppliers to implement an energy-management program and use renewable energy. If they don’t know where to start, share your own best practices and coach them along. By managing energy consumption and generating their own renewable energy, suppliers can manage risks against the volatility of fossil fuel prices and can even achieve energy independence. For those with larger energy loads or limited space onsite, an off-site agreement such as a green tariff, direct power purchase agreement or virtual power purchase agreement may be the right fit. Some organizations may wish to bring new renewable energy capacity online — a principle referred to as “additionality” — which many regard as a best practice as it supports further development of renewable energy markets.
Choose logistics and transportation partners that have demonstrated a commitment to decarbonizing their services, by re-evaluating logistics routes to optimize material moves, and minimize air freight by choosing ground or sea transportation where possible. When air freight is needed, talk to your partners about low-carbon options and explore the use of sustainable aviation fuels. Having a discussion sends a market signal that there’s interest in these options.
Modifying your logistics processes will enable a decrease in Scope 3.4 and 3.9 (upstream and downstream transportation and distribution), which for many companies is a significant portion of their footprint.
Tackle product design and manufacturing. Investigate how you can improve processes and products to become more sustainable. Internally, push teams to understand the interdependencies between product design and manufacturing, and how changes within design can have a ripple effect through several Scope 3 emissions categories.
Take a lifecycle approach to design thinking, and keep sustainability at the forefront. Businesses can also begin transitioning towards circular economy principles, such as exploring product-as-a-service models, reducing overall demand, and promoting a more resource-efficient economy.
In the manufacturing process, investigate whether sustainable raw materials can be used. For example, a company that utilizes solvents could explore sourcing and integrating bio-based solvents into its processes. These solvents have a much lower Scope 3.1 footprint than their petroleum-based counterparts.
Your efforts may result in the creation of a more sustainable end product that incorporates recycled or renewable raw materials (Scope 3.1), requires less energy during its use (Scope 3.11), is easier to recycle at the end of its life (Scope 3.12), reduces energy consumption during manufacturing (Scope 1, 2 and 3.3), or reduces waste in your manufacturing (Scope 3.5).
Rethink packaging. Packaging impacts your Scope 3.1 (purchased goods and services) and Scope 3.12 (end of life) emissions, and can be designed in a way that minimizes its impact on your upstream and downstream emissions.
Find ways to right-size packaging to fit the need. Explore innovative designs, such as refillable or reusable packaging to allow you to extend its life and reduce single-use waste.
Explore switching to packaging with recycled content, as packaging made of virgin materials increases the environmental footprint. Consider increasing the use of alternative materials with lower environmental impacts, such as Forest Stewardship Council (FSC)-certified fibers and plant-based polymers, and reduce or eliminate the use of plastics produced with chemicals of concern. For instance, although expanded polystyrene (EPS) has good insulating and cushioning properties, it’s difficult to recycle. Because it’s a petroleum-based material, it takes hundreds of years to degrade naturally, and is problematic once it enters marine environments.
Finally, inform your customers about the recyclability of your packing materials by clearly displaying recycling guidance.
Change employee habits. Aside from these strategic changes, adjusting your employee’s daily habits can also significantly impact your Scope 3.6 (business travel) and 3.7 (employee commuting) emissions. Look into remote work opportunities, consider normalizing virtual meetings, and commit to making them more engaging. Investigate on-site electric vehicle charging, incentives for owning electric vehicles, and providing bus or train passes to commuters.
When analyzing how to best reduce Scope 3 emissions, you need to look both inside and outside your organization. Every little bit helps — fostering change can start at the micro or macro level, as actions such as aligning your product-development roadmap with the United Nations’ Sustainable Development Goals (SDGs), or actively engaging with suppliers, are excellent places to start.
And don’t forget: It all starts with establishing your baseline, identifying decarbonization levers you can focus on, and setting targets to bring your ambition to life. Don’t be afraid to challenge your team — and your suppliers — and evaluate the interdependencies that exist in the supply chain related to product design, manufacturing and packaging.
Reducing Scope 3 emissions is a marathon, not a sprint. While immediate results are desirable, significant emission reductions take time. Whether it’s collaboration with suppliers, optimizing product design or rethinking packaging, you have numerous options at your disposal to get you started on reducing your Scope 3 footprint.
Chris Famolare is global head of sustainable operations with MilliporeSigma.