To fight climate change as a business, it’s important to assess greenhouse gas (GHG) emissions. To identify the major emission sources and areas where savings can be made, this assessment must define a precise calculation parameter.
Various methodologies exist for calculating carbon footprint:
All these tools rely on the international methodology developed by the GHG Protocol (Greenhouse Gas Protocol). This carbon accounting categorizes the different emissions of a company, product, or service into 3 different scopes. These are the famous Scopes 1-2-3.
Harmonizing the fight against climate change and having a uniform methodology for accounting for the carbon footprint of companies or organizations.
Today, in the French Bilan Carbone®, only Scopes 1 and 2 are mandatory in the accounting scope. But what is the definition of Scope 3? What emissions are included in this scope? Why isn’t it mandatory in calculating carbon footprint?
Before delving into Scope 3 in detail, it’s important to explain the framework it fits into.
When measuring carbon impact, the first step is to analyze emission sources. For this, a company can conduct a Bilan Carbone®, a tool developed by ADEME, which has become synonymous with carbon assessment.
This desire for transparency and emission measurement began in 1990 when an international standard was established to calculate corporate GHG emissions.
In 2001, the first edition of this corporate standard was published, emphasizing the importance of accounting for a company’s emissions across its value chains. This is where the familiar Scopes 1 and 2 originated. Scope 3 was introduced in 2011 with the GHG Protocol, but is still not mandatory for carbon accounting in 2021.
To calculate GHG emissions, Scopes 1-2-3 are divided into 22 different numbered categories known as “emission sources.”
Scope 1 is perhaps the easiest perimeter to calculate. It includes all emissions referred to as “direct.” These are emissions directly linked to the manufacturing of a product and/or service that the company controls.
For example:
These emissions occur directly at the company’s level, its factories, buildings, and various installations… Scope 1 is the most limited perimeter for calculating greenhouse gas emissions.
Scope 2 includes all indirect emissions related to the consumption of electricity, heat, or steam used to manufacture a product. These emissions are not directly at the company’s site but occur during product production. They include energy consumption (green, renewable, electricity…).
Simply put, Scope 3 covers all other emissions across the company’s value chain. This category can be quite broad as it encompasses everything that does not fall under Scope 1 or Scope 2.
Typically, there are two subcategories within Scope 3:
Since we’re particularly interested in Scope 3 today, let’s dig deeper to understand the scope of emissions it covers.
According to ADEME (French Environment and Energy Management Agency), Scope 3 can be understood as:
“The other emissions directly produced by the organization’s activities that are not accounted for in Scope 2 but are related to the entire value chain, such as: purchasing raw materials, services or other products, employee travel, upstream and downstream transport of goods, waste management generated by the organization’s activities, use and end-of-life of products and services sold, immobilization of production assets…”
Viewed this way, it’s quickly evident that Scope 3 encompasses the vast majority of emissions related to a company’s activities. It provides a broad overview of emissions.
So, what is considered when calculating GHG emissions in Scope 3? It’s essential to understand that the entire life cycle is considered, hence the ability to categorize emissions produced upstream or downstream of production.
There are 22 subcategories across the Scopes 1-2-3, with 16 pertaining to Scope 3, demonstrating that the majority of emissions related to a company’s activities are concentrated here.
To have a comprehensive view of its impact, one must go back before even producing the product or services. There are 9 subcategories of Scope 3 upstream emissions, which can be categorized into 4 typologies.
Energy:
Products:
Upstream freight transport (12.)
Travel:
It’s clear that upstream emissions are numerous and diverse, covering a much broader range than the simple Scopes 1 and 2, which concern:
Downstream emissions are a bit more challenging to calculate as they mainly concern the consumer’s use of the product and/or service. Here are the different Scope 3 subcategories and what they entail.
There are 6 emission sources, which can be divided into 3 typologies:
Downstream freight transport and distribution (17.)
End of life:
Consumption:
The 16th category is called “other indirect emissions”, and covers everything not included in the other 15 Scope 3 emissions items.
Today, we are increasingly aware that waste is one of the major issues in the fight against global warming. Recycling is not always the best ecological solution, especially in the digital sector.
Scope 3, strictly speaking, is not mandatory for anyone, not even for companies and organizations subject to the legal obligation of conducting a Bilan Carbone every 3 years.
Since the Grenelle II law of 2012, this situation applies to:
Only Scopes 1 and 2 are mandatory when these companies and organizations conduct carbon accounting for their emissions. In most cases, companies that choose to include Scope 3 in their accounting scope do so to demonstrate their commitment to ambitious climate change efforts.
Calculating one’s entire carbon footprint is difficult, and there are numerous data points to consider. Yet, it’s important to account for this third scope to comprehensively understand the impact of organizational activities.
Failing to consider all upstream and downstream emissions across the value chain benefits some. Since Scope 3 covers a vast majority of CO2 emissions, omitting it results in a very incomplete view of one’s impact and GHG balance.
This lack of Scope 3 regulation reveals a lack of ambition and tangible actions to combat climate change. Ignoring this perimeter presents a distorted carbon footprint, failing to address the full extent of one’s impacts.
According to a study by the Climate Action Network in 2016, emissions within the Scope 3 perimeter can easily represent 3 to 4 times those of Scopes 1 and 2.
When considering the 22 emission source categories, the scale of the work required to account for carbon footprint across the 3 scopes can be daunting.
This is also a major obstacle to including mandatory Scope 3 in GHG inventories. However, it’s necessary. To do so, data must be collected sector by sector.
Accounting for Scope 3 in carbon footprint calculations also raises questions and demonstrates certain limitations:
For example, in the digital domain, how do we measure tool consumption once they are with the consumer?
In 2021, despite digital pollution and its significant role, it’s not included in the various emission source categories of Scopes.
When Scope 3 is accounted for, digital-related GHG emissions can be inserted into the following categories:
But there are no dedicated emission sources for digital despite digital-related GHG emissions accounting for 4% of GHG and consuming between 6 and 10% of global electricity.
Several more detailed parameters need to be considered when calculating emissions based on Scope 3, including:
The role of digital in carbon footprint accounting is still ambiguous due to its recent emergence. However, ADEME explains that:
It’s also possible to approach the issue from the opposite direction and seek to calculate the avoided emissions resulting from various choices.
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Today, more and more stakeholders, whether customers or investors, seek transparency. Companies must take responsibility in the fight against climate change, which requires better management of their impact and GHG emissions.
Therefore, it’s crucial to include the Scope 3 perimeter in your carbon accounting if you aim to pursue a strong and ambitious CSR (Corporate Social Responsibility) strategy.
Do you want to reduce the carbon impact of your IT fleet? Contact us to discuss your projects.
Team WeeeDoIT & Emma