"carbon footprint" of a company or organization is a measure of the total greenhouse gas emissions that are caused directly and indirectly by an activity or accumulated over the life stages of a product. These emissions are typically quantified and reported in terms of equivalent carbon dioxide (CO2e).
When measuring an organization's carbon footprint, greenhouse gas emissions are categorized into three "scopes" as defined by the Greenhouse Gas (GHG) Protocol, a widely used international standard:
Carbon Footprint Scope 3
Scope 1: Direct emissions from owned or controlled sources. For example, emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc., as well as emissions from chemical production in owned or controlled process equipment.
Scope 2: Indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company.
Scope 3: All other indirect emissions that occur in a company's value chain. This includes both upstream and downstream emissions not covered in Scope 2. For example, emissions from the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, outsourced activities, waste disposal, etc. It also includes emissions from the use of sold products or services.
How to use GHG protocol to reduce Carbon Footprint Scope 3?
The Greenhouse Gas (GHG) Protocol Corporate Standard, including its Scope 3 Standard, provides a framework for organizations to measure, manage, and reduce their carbon footprint. Here are some steps to apply the GHG Protocol to reduce Scope 3 emissions:
- Understand Scope 3 Emissions: The first step is to understand what Scope 3 emissions are. As defined by the GHG Protocol, Scope 3 emissions include all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.
- Identify and Categorize Scope 3 Emissions: Scope 3 emissions are typically divided into 15 categories, including purchased goods and services, capital goods, fuel- and energy-related activities, transportation and distribution, waste generated in operations, business travel, employee commuting, and more. Identify which categories are relevant to your organization.
- Collect Data and Calculate Emissions: Collect data for each relevant category. This might involve gathering information from suppliers, estimating emissions using industry averages, or using economic input-output models. The GHG Protocol provides specific guidance and calculation tools to help with this process.
- Set Targets and Develop a Reduction Plan: Based on your emissions data, set targets for reducing your Scope 3 emissions. This might involve working with suppliers to reduce their emissions, changing procurement practices, improving the energy efficiency of products, or encouraging more sustainable behavior among employees.
- Implement, Monitor, and Report: Implement your reduction plan, and monitor and report on progress. Regularly update your emissions calculations to track how well you're doing against your targets. Transparent reporting of Scope 3 emissions can enhance your organization's reputation and contribute to global climate change mitigation efforts.
- Review and Improve: Climate action is an ongoing process. Regularly review your Scope 3 emissions, targets, and reduction strategies, and look for opportunities to make further reductions.
How to collect information from suppliers according to The Greenhouse Gas (GHG) Protocol Corporate Standard?
- Communication and Engagement: Start by informing your suppliers about your intentions and why you are collecting this data. Explain the importance of sustainability and how their cooperation will lead to mutual benefits such as improved efficiency, cost savings, and enhanced reputations.
- Define Information Needs: Clearly define what information you need from your suppliers. This will typically be data that allows you to calculate their GHG emissions, such as energy use, fuel consumption, and business travel.
- Supplier Questionnaires/Surveys: One common method for collecting data from suppliers is through questionnaires or surveys. These can ask for specific emissions-related data. The GHG Protocol provides guidance on what kind of questions to ask. For suppliers who may not be familiar with GHG emissions reporting, providing guidance on how to calculate or estimate their emissions can be beneficial.
- Use Industry-Specific Calculation Tools: If direct data collection from suppliers isn't feasible, consider using industry-specific tools or databases that provide estimates of emissions for specific types of suppliers or products.
- Utilize Supplier Sustainability Reports: If your suppliers have their own sustainability reports, these can be a valuable source of emissions data.
- Establish Regular Reporting Mechanisms: Encourage suppliers to report their emissions data on a regular basis. This could be annually, semi-annually, or on a timeline that aligns with your reporting needs.
- Build Capacity: If suppliers lack the knowledge or resources to report their emissions, provide support where possible. This might involve training sessions, workshops, or providing resources on how to calculate GHG emissions.
- Supplier Agreements: Consider incorporating GHG reporting requirements into supplier agreements or contracts. This can help ensure that suppliers are committed to providing the necessary data.
What are the instructions of the Greenhouse Gas Protocol for Supplier Questionnaires?
- Data Collection Process: The GHG Protocol recommends using a systematic process to collect data. This could involve creating a standard supplier questionnaire that is sent to all suppliers.
- Data Quality: The GHG Protocol emphasizes the importance of data quality. It recommends using primary data (data collected directly from suppliers) wherever possible, especially for significant Scope 3 categories. Where primary data isn't available, it recommends using secondary data (industry averages or other generic data).
- Significant Scope 3 Categories: The GHG Protocol recommends focusing data collection efforts on significant Scope 3 categories. This could mean targeting questionnaires to suppliers that contribute to these categories.
- Tiered Approach to Data Collection: The GHG Protocol suggests a tiered approach to data collection where more precise methods (like supplier-specific data) are used for significant Scope 3 categories, and less precise methods (like industry-average data) are used for less significant categories.
- Supplier Engagement: The GHG Protocol recommends engaging with suppliers to improve the availability and quality of data. This could involve providing support or training to suppliers to help them complete the questionnaire.
- Verification: The GHG Protocol recommends verifying data where possible. This could involve asking suppliers to provide supporting documentation or third-party verification statements.
Carbon Disclosure Project (CDP) Supply Chain Program
- This global system allows companies to measure and manage the environmental impacts of their supply chains. Many companies disclose their greenhouse gas emissions data through this platform, including Scope 3 emissions, in response to requests from their customers.
- The CDP is recognized as the gold standard for carbon disclosure methodology and process, and its data is often used by regulatory and governmental bodies, as well as by other businesses.
Carbon Disclosure Project (CDP) utilizes an annual questionnaire to collect data from companies about their greenhouse gas emissions and other environmental impacts. The questionnaire covers a range of topics, including:
Governance and Strategy: This section asks about the organization's governance around climate-related issues, the incentives for managing climate-related issues, and the organization's strategy to address climate-related risks and opportunities.
Risks and Opportunities: This section asks about the risks and opportunities related to climate change that the organization has identified over the short, medium, and long term.
Targets and Performance: This section asks about the targets the organization has set to reduce its GHG emissions, and its progress towards achieving these targets.
Emissions Breakdown: This section asks for a detailed breakdown of the organization's Scope 1, 2, and 3 emissions.
Supply Chain: For companies participating in the CDP's supply chain program, there are additional questions about the emissions of their suppliers.
Verification: This section asks about the steps the organization has taken to verify its emissions data.
In general, it's true that some companies do face challenges in getting their suppliers to respond to the CDP questionnaire. Suppliers may lack the resources or knowledge to complete the questionnaire, or they may not see a direct benefit to their own business.
However, there are also many examples of companies achieving high response rates from their suppliers. This often involves a combination of clear communication about the importance of the questionnaire, support for suppliers in completing it, and integrating sustainability criteria into procurement decisions.
According to CDP's Global Supply Chain Report 2020, suppliers disclosed 14% more emissions in 2020 compared to 2019, showing a positive trend in participation. However, the report also notes that many suppliers are still not disclosing their emissions.
LCA Problems
- Not all suppliers may have conducted a full LCA:
Conducting an LCA can be resource-intensive and requires specific expertise. Not all suppliers may have this capacity.
- LCAs may not cover all relevant emissions
While LCAs can provide detailed information about the emissions associated with a specific product or service, they may not cover all the emissions that are relevant for Scope 3 reporting. For example, they may not include emissions from business travel, employee commuting, or waste generated in operations.
- LCAs may not be comparable:
If different suppliers have conducted LCAs using different methodologies, their results may not be directly comparable.
Good Use Industry-Specific Estimates
1- Greenhouse Gas Protocol Tools: The Greenhouse Gas Protocol offers a variety of calculation tools that can help you estimate GHG emissions from specific industries or activities. These tools are available for free on the GHG Protocol website.
2- Life Cycle Assessment Databases: Life Cycle Assessment (LCA) databases provide emissions data for a wide range of products and services across their entire life cycle. Examples include the U.S. Life Cycle Inventory Database and the European Life Cycle Database.
3- Governmental and International Agencies: Many governmental and international agencies provide emissions data and calculators for specific industries. Examples include the U.S. Environmental Protection Agency (EPA), the International Energy Agency (IEA), and the United Nations Framework Convention on Climate Change (UNFCCC).
4- Industry Reports and Studies: Many industries have studies or reports that provide average emissions data. These can often be found by searching online or through industry trade associations. This category doesn't have a specific website as it varies by industry. It's recommended to search directly for reports or studies related to your specific industry or consult with relevant industry associations.
Ahmed Sakr
Product Compliance Consultant
ComplyMarket UG (haftungsbeschraenkt)
