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This guide is designed to help sustainability professionals, responsible for sustainability and Environmental, Social and Governance (ESG) reporting for their organisation, to better understand scope 3 emissions and how to start reporting in this area.
Scope 3 emissions, also known as value chain emissions, are indirect Greenhouse Gas (GHG) emissions both upstream and downstream of an organisation’s main operations. This usually means all of the emissions a company is responsible for outside of its own operations—from the goods it purchases to the disposal of the products it sells.
In the past, organisations have typically focused on monitoring and documenting scope 1 and 2 emissions since they are relatively easy to interpret and data is readily accessible. However, due to a large number of organisations involved, complex logistical obligations and of course product use and disposal, it is often the case that scope 3 emissions are by far the largest proportion of an organisations’ carbon footprint. Yet, they are also the area over which businesses have the least control and have the most difficulty quantifying.
In a recent survey of 287 reporting companies, Greenstone asked the question “do you currently calculate and report your company's scope 3 emissions?”. The survey found that only 17% of companies have been reporting scope 3 emissions for over 2 years and 18% have recently started to report in this area. The survey also found that a significant 38% of companies report limited scope 3 emissions e.g. business travel only and nearly 24% of companies said that they do not currently report any scope 3 but are considering reporting in this area in the future.