Scope 3 emissions: It’s more than just employee commute!
Sometimes, at Greenbase, we hear the throwaway line, “Scope 3 emissions are mostly just employee commutes”, and see articles stating that employee commuting contributes significantly to a company's overall carbon footprint. However, Scope 3 reporting goes well beyond the daily drive.
Unlike direct emissions (Scope 1) and indirect emissions from purchased electricity (Scope 2), Scope 3 emissions encompass all other indirect emissions that occur within an organisation's value chain.
Those emissions are split into 15 categories:
1 purchased goods and services
2 capital goods
3 fuel- and energy-related activities
4 upstream transportation and distribution
5 waste generated in operations
6 business travel
7 employee commuting
8 upstream leased assets
9 downstream transportation and distribution
10 processing of sold products
11 use of sold products
12 end-of-life treatment of sold products
13 downstream leased assets
14 franchises
15 investments
Only when we interrogate the full life cycle of a company’s product, from the cradle to the grave, do we get an idea of the true impact the Employee Commute has or has had on the environment and the overall Scope 3 emissions.
Therefore, contrary to some people’s beliefs, these indirect Scope 3 activities involve much more than just a company’s employee commuting.
Scope 3 emissions represent a significant portion of an organisation's total greenhouse gas emissions. For many, these indirect emissions not only surpass the combined total of Scope 1 and 2 but also offer the most substantial opportunities for reductions.
Identifying which Scope 3 categories are most relevant requires a nuanced approach. Organisations must consider factors such as the scale of emissions, the potential for emission reductions, stakeholder expectations, and the financial impact. This process involves quantifying emissions and also understanding the organisation's role within its broader ecosystem, including supply chains, product life cycles, and even employee behaviours.
The significance of scope 3 emissions for an organisation
Managing Scope 3 emissions is not just about environmental stewardship - it's also about financial prudence, stakeholder engagement, and, increasingly, regulatory compliance, and understanding the full spectrum of these emissions is crucial for organisations aiming to position themselves as leaders in sustainability.
Addressing Scope 3 emissions is fraught with challenges, from collecting accurate data across complex supply chains to engaging with suppliers who may have varying levels of commitment to sustainability. A significant portion of Scope 3 emissions stems from a company's supply chain. From raw material extraction to product delivery, suppliers' practices significantly impact a company's carbon footprint. Collaborative efforts and sustainable sourcing strategies are crucial in mitigating these emissions.
The lifecycle of products, including their use and disposal by consumers, further adds to Scope 3 emissions. Designing sustainable products, promoting responsible consumption, and facilitating proper disposal methods are key to reducing these indirect emissions.
Stakeholders, including investors and consumers, increasingly demand transparency regarding a company's entire carbon footprint. Best practices involve setting clear, achievable goals, investing in robust data collection and management systems, and fostering a culture of sustainability throughout the organisation and its wider network.
As governments legislate the reporting of Scope 3 emissions and the world works towards Net Zero, company boards will need to address GHG emissions in the same way they address other major business risks.
So what about that “Employee Commute”?
Well, it all comes down to the company’s size, industry, and its core activities. While the “Employee Commute” category is important to consider and include, it is merely the tip of the iceberg and, in some cases, may be immaterial.
The organisation’s approach to it can reveal a lot about its commitment to sustainability, and it can create opportunities. Efforts to reduce these emissions by promoting remote work, encouraging carpooling, or subsidising public transport passes will contribute to emission reductions and demonstrate a commitment to employee well-being and social responsibility.
How do I get started?
Acknowledging and acting upon these indirect emissions involves understanding the entirety of a company's operations and collaborating with stakeholders at various stages. Organisations that recognise and act on this will lead in sustainability, innovation, stakeholder engagement and trust, and long-term resilience.
The first step in managing your Scope 3 emissions is measuring, and Greenbase is here to help with this. We can work with you on developing the frameworks and methodologies and provide the support necessary to navigate the complexities of Scope 3 emissions.
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