Sustainability & Diversity

Tackling the Challenge of Scope 3 Emissions: What You Need to Know

Based on our video, "How to reduce Scope 3 emissions? Simply Explained", this blog will walk you through the steps necessary to tackle scope 3 emissions. 

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Updated: Apr 15, 2024

The world is facing a climate crisis and it is imperative that companies and governments act fast to reduce greenhouse gas emissions.

Hear the full story by watching the video below: 

This is why today, half of the largest companies have made commitments to reduce their emissions. However, despite these commitments, only a few of these companies have a clear plan on how to do so.

This is because measuring emissions is a difficult task, especially when it comes to scope 3 emissions.

So, what are scope 3 emissions? To put it simply, scope 3 emissions are all the indirect emissions that come from the production and consumption of goods and services.

This includes purchased goods and services, business travel, waste management, and more. 80% of a company’s emissions come from its supply chain, which makes the data on scope 3 emissions broad and scattered.

In order to measure and reduce scope 3 emissions, companies must first have a road map in place. This road map would include the following steps.

 

Steps to tackle scope 3 emissions

Let's break down the diagram below. Notice the 3 phases, commitment, data & analytics, and finally, making an impact.

 

Tackle scope 3 emissions



  1. Sustainability Ownership: Appointing a person or team within the company to take ownership of the project and ensure that its goals are achieved.
  2. Baseline Calculation: Determining the current level of the company's emissions. This can be done by analyzing all spending data to understand what the company is purchasing and from whom. The process can be time-consuming, but external partners are available to assist in this step. This information can be combined with data from external databases that provide information on emissions from specific products or services.
  3. Hotspot Identification: Identifying the suppliers or categories that contribute the most to the company's emissions.
  4. Precise Supplier Emissions Collection: Collecting accurate emissions data from suppliers.
  5. Reduction Initiatives: Implementing programs and strategies aimed at reducing emissions.

Scope 3 emissions: simply explained

The first step to calculate the baseline is to classify all spend data to understand what the company is buying and from whom. This can be a big task, but there are partners who can help with it.

This data can then be combined with external databases that have information on the emissions from certain products or services.

Once the baseline is calculated, companies can identify hotspots and start collecting more precise supplier emissions data. This data can then be used to implement reduction initiatives and track progress.

 

What to look for in a software partner

The best way to measure and manage scope 3 emissions is through software solutions.

There are several providers that offer software solutions specifically designed for this purpose. These software solutions can help companies track emissions, identify hotspots, and implement reduction initiatives.

The key components of the best software providers are:

Automated data collection 

The software should automatically collect data from various sources and allow companies to track emissions over time.

Supplier engagement

The software should provide tools for companies to engage with suppliers and help them reduce emissions.

Reporting and transparency

The software should provide reporting capabilities and transparency, allowing companies to communicate their progress with stakeholders.

Integration with existing systems

The software should be able to integrate with existing systems, making it easy for companies to implement and use.

CO2 Analytics dashboard EY verified and Calculations by GHG protocol

Learn more about Sievo's CO2 Analytics Solution

 

Conclusion

In conclusion, measuring and reducing scope 3 emissions is a difficult but important task. Companies must have a roadmap in place and start collecting data in order to make a difference.

The best way to do this is through software solutions that provide automation, supplier engagement, reporting, and integration capabilities.

So, if your company has made a commitment to become net zero by 2030, don’t panic.

There are solutions out there that can help you achieve your goals. Whatever method you choose, just start, because everything is not lost yet.

Alexander Duray

Alex is Sievo's VP of Value Enablement. He leads customer value creation with a focus on cross-functional collaboration, challenging the status quo, and growth. Alex has his backround in strategic sourcing and procurement data management.

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