Scope 3 … the serious path towards sustainability - Smart Energy Decisions

Commercial, Energy Efficiency, GHG Emissions, Industrial  -  November 3, 2017 - By Daniel Hill

Scope 3 … the serious path towards sustainability

More and more companies are making public commitments to cut greenhouse gas emissions outside of their own operations. Why? Because compared to scope 1 and 2 emissions (from direct activities), avoiding scope 3 emissions can have the greatest impact on a corporate footprint.

The numbers are clear: the majority of GHG emissions come from indirect activities, both upstream and downstream, in the supply chain. In fact, for most of consumer goods products manufacturing, scope 3 emissions account for over 70% of overall GHG emissions. Included is everything from purchasing raw materials to end of life treatment.

But their very nature—being present throughout all stages of production—also makes scope 3 emissions the trickiest to influence. After all, companies can't see reductions without the help of suppliers.

So how one approaches setting supply chain goals is important:

  1. Before anything can be set, the proper stakeholders must be looped into the process. Understanding of how a company’s supply chain works will dictate what data needs to be collected, and from which suppliers;
  2. The goal also has to be achievable, and set specifically to a company’s own GHG footprint;
  3. A system must in place to credibly measure and report on both the environmental and business impacts;
  4. The target should be based in science.

This last point is incredibly important, because setting science-based supply chain targets has officially become mainstream: since 2015, when Walmart surpassed it's 20 million metric ton GHG avoidance goal, and the Science-Based Target initiative was launched at COP 21 in Paris, over 250 companies (including some of the Fortune 500's largest) have committed to setting science-based scope 3 goals. Now Walmart's pushing the envelope even further with its Project Gigaton initiative.

My point here? All this momentum, at such a huge scale, means that without science-based supply chain goals, your company’s sustainability plan will likely not be taken seriously. Not by your customers. Not by your shareholders. And not by your board members or employees.

Yes, navigating scope 3 can be daunting. There are a number of different methods — an absolute reduction goal versus an intensity goal — that take into account different scopes, have different benefits and are for different data needs. In other words, there are a lot of moving parts.

But the good news is there are tools and resources out there that can offer guidance on which approach is best suited for your company, helping to make the process more manageable. A webinar recording on this subject can be found on EDF's Supply Chain Solutions Center on this exact subject to help you get started.

So be taken seriously. The journey toward sustainable supply chains may contain unexpected twists and turns, but in the end, it will be well worth it … for both your business and the planet.

Editor's note: This column has been adapted from an Oct. 24 EDF + Business blog post.

Daniel HillDaniel Hill is a project manager for the EDF Climate Corps team, which orchestrates an innovative fellowship program placing top-tier graduate students in leading companies, municipalities and universities to build the business case for sustainability and energy efficiency.  By working with more than 350 organizations, Climate Corps has uncovered nearly $1.5 billion in energy savings — simultaneously improving the organization's bottom line and environmental impact. 

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