Greenhouse gas (GHG) emissions are categorised into three different scopes. Scope 1 refers to the direct GHG emissions, such as the fuel consumption in company vehicles or emissions associated with company facilities, and scope 2 relates to the indirect GHG emissions, such as the purchase of electricity.
Scope 3 emissions are the GHG emissions that are not directly produced by a company’s own operations but come from other sources outside of a company’s direct control, such as the activities of suppliers, customers, and other partners. This can include emissions from the production and transportation of goods, as well as emissions from the use and disposal of products.
Scope 3 includes 15 different categories, both upstream and downstream. The first 8 categories are upstream and include purchased goods and services, capital goods, fuel and energy-related activities (that are not included in Scope 1 or Scope 2), upstream transportation and distribution, waste generated in operations, business travel, employee community, and upstream leased assets.
Categories 9 to 15 are downstream and include downstream transportation and distribution, the processing of sold products, the use of sold products, end-of-life treatment of sold products, downstream leased assets, franchises, and investments.
A great way for a business to reduce their carbon footprint and reduce negative environmental impact is to tackle scope 3 supply chain emissions by working with suppliers. To do this, businesses need to address the emissions that occur outside of their own operations, including the emissions from raw materials, transportation, and other activities related to the supply chain. By working closely with suppliers to identify areas of improvement and implementing solutions, businesses can significantly reduce their greenhouse gas emissions and improve their overall sustainability.
Being a scope 3 supplier means that a company’s products or services are used by another company, and the emissions associated with these are considered part of the purchasing company’s scope 3 emissions. By working to reduce the emissions associated with its products and services, a scope 3 supplier can help its customers reduce their overall carbon footprint.
The supply chain is important for reducing greenhouse gas emissions as much of the environmental impact associated with the business sector is part of the supply chain. By improving the supply chain, businesses, consumers and other stakeholders can reduce this environmental impact.
Furthermore, sustainability practices have also been found to account for 19% of the factors that impact the commercial performance of a business, according to research by Supply Pilot. Therefore, focusing on supplier collaboration and becoming more environmentally friendly can impact the financial performance of a business in a positive way.
At EESG, we measure our scope 3 missions. This means we record and analyse emissions across our whole supply chain and are responsible for the greenhouse gas emissions that occur outside our own operations, and we take great pride in ensuring that these are kept to a minimum.
