Scope 3 and Corporate Sustainability: The Importance of Measuring Scope 3 Emissions

For organizations looking to make serious strides in decarbonization, scrutinizing their value chain and quantifying their Scope 3 emissions becomes a necessary task. Sustainability leaders are looking for ways to prioritize and understand their full emissions footprint, and understanding how to better optimize the largest group is a major challenge for those leading corporate sustainability projects.

This article breaks down the importance of Scope 3 metrics and what organizations can do to minimize their Scope 3 emissions.

Table of Contents

• How Scope 3 Emissions Impact Corporate Sustainability
• The Outsized Impact of Scope 3
• The Benefits of Understanding Scope 3
• Strategies for Minimizing Scope 3 Emissions
• Scope 3 and Corporate Sustainability FAQs

How Scope 3 Emissions Impact Corporate Sustainability

As corporations continue to report on their greenhouse gas emissions for sustainability and legislation reasons, it’s important to understand where those emissions are coming from. By doing so, organizations can adapt and optimize their operations to minimize their emissions.

Measuring Scope 1 and Scope 2 emissions is a fairly simple process. Scope 1 emissions are those directly created by assets owned and operated by the reporting organization. Think emissions directly related to the production of your business. For example, fueling power equipment is a Scope 1 emission.

Scope 2 emissions are also straightforward to track. These emissions result from purchased energy consumption, including purchased electricity from a utility company. The easiest way to quantify these emissions is to refer to the energy consumed listed on your utility bills.

Scope 3 emissions often comprise the bulk of an organization's carbon emissions, but they are the most complicated to track. If an organization is truly looking to reduce carbon emissions and impact, understanding how to measure and calculate these emissions is imperative to minimizing emissions.

The Outsized Impact of Scope 3

According to a study completed by the Task Force on Climate-Related Financial Disclosures in 2021, 83% of people surveyed state that obtaining relevant data for Scope 3 emissions is hard. Scope 3 emissions are often the majority of a company’s total greenhouse gas emissions.

When looked at alone, scope 1 and 2 provide just a small fraction of a company’s total greenhouse gas emissions. Finding ways to measure and address Scope 3 emissions is essential for maximizing the efforts of corporate sustainability programs.

As investors, regulators, and consumers press for meaningful emissions reductions, identifying how to measure Scope 3 emissions becomes more necessary.

The Benefits of Understanding Scope 3

Beyond external obligations, comprehensively quantifying Scope 3 emissions enables organizations to:

• Identify all high-impact emissions hotspots across their value chain.
• Assess product and supply chain vulnerabilities to impending carbon costs and regulations.
• Engage partners on decarbonization initiatives.
• Develop credible net zero and science-based emissions reduction plans.
• Uncover eco-efficiency improvements and circular economy opportunities.
• Meet rising sustainability expectations of investors, customers, and employees.
• Future-proof growth for the coming zero-carbon economy.

Strategies for Minimizing Scope 3 Emissions

Identifying major sources of Scope 3 emissions is just half of the battle—your organization also needs to know how to minimize those emissions. Here are a few examples of what your organization can do to minimize their Scope 3 emission:

• Analyze supplier emissions and choose to partner with suppliers with similar sustainability goals
• Provide sustainability benefits such as a Carbon Savings Account to employees to offset Scope 3 emissions
• Find opportunities to use sustainable energy sources, such as solar energy or recycled water
• Develop more sustainable product packaging
• Find ways to implement recyclable materials in production

Scope 3 and Corporate Sustainability FAQs

Is corporate travel a scope 3 emission?

Corporate travel is considered a scope 3 emission. It is considered “employee commuting” which is a specific category within Scope 3 emissions. To reduce emissions created by employee commuting, minimize the travel employees must do to complete day-to-day business.

What are the 3 pillars of corporate sustainability?

The three pillars of corporate sustainability are environmental, social, and governance—often referred to as ESG. Learn more about ESG.

Minimize Scope 3 Emissions with Scope Zero

Provide employees with opportunities for financial wellness while minimizing Scope 3 emissions. Schedule a demo to learn how you can measure, reduce, and report Scope 3 work-from-home and commute emissions while reducing spend on sustainability goals.