Broadening the scope

Anthony Ainsworth, COO at npower Business Solutions explains why Scope 3 must be on your own sustainability agenda

A t the beginning of this year, per year of major climate action there is real optimism that 2021 will be. While several key government policies were delayed, of COP26 ahead, it published its long-awaited Net Zero Strategy (i) and Heat and Buildings Strategy (ii) in October, which followed the Industrial Decarbonisation Strategy (iii) and Transport Decarbonisation Plan (iv) earlier this season.

We’ve also seen a growing amount of organisations in both private and public sectors investing in ambitious carbon reduction plans, which includes resulted in greater scrutiny with regards to how companies are measuring exactly, managing and reporting their carbon impact.

As such, while great strides are increasingly being taken to decrease the ‘direct’ emissions from power and premises supply, attention is embracing the ‘indirect’ emissions from the wider value chain now. In the private sector, many companies are aligning their plans through the Science Based Target initiative (SBTi) (v) , and an integral part of that is putting strategies set up to lessen Scope 1 (direct), 2 (power-related) and 3 (indirect) emissions as outlined in the GHG Protocol.

For facilities managers, this may impact them in a genuine number of ways, based on where their business sits in the supply chain. Being an ‘influencing’ business, they could be necessary to provide support to greatly help report emissions generated beyond their very own operations. Or, they may be within an ‘influencee’ business, in which a company they supply is currently requiring them to improve how they work therefore the ‘influencer’ company can meet their very own sustainability targets.

Or, they may be both an influencee and influencer business, wanting to reduce their very own indirect emissions while also having to meet up with the sustainability requirements of another company they provide.

Therefore, it could be easy to understand why addressing both direct and indirect emissions could be a hugely complex area to navigate.

WHICH ARE THE THREE SCOPES?

Firstly, it seems sensible to check out what the three ‘Scopes’ are. Based on the GHG Protocol, they’re thought as:

– Scope 1 covers direct emissions from owned or controlled sources, such as for example premises and buildings. This consists of fuel company and combustion vehicles.

– Scope 2 covers indirect emissions from the generation of purchased electricity, steam, cooling and heating.

– Scope 3 includes all the indirect emissions that occur in a company’s value chain. This consists of business travel in non-company vehicles in addition to employee commuting. In addition, it includes emissions due to your purchased goods and services and both upstream and downstream transportation and distribution.

Until recently, many businesses have centered on reducing emissions from their very own operations and power consumption beneath the GHG Protocol Scope 1 and Scope 2 framework because they are largely inside a business’ control. It is possible to, for instance, switch to renewable energy or invest in electrifying your fleets in reducing these emissions. When using power from the grid could have emissions connected with it still, because the grid moves to renewables, these emissions will certainly reduce.

However, the move towards net zero implies that businesses have to look beyond this and across their entire supply and value chain, that is where Scope 3 will come in.

That’s where it gets more difficult as it covers from the products purchased to the disposal of the merchandise you sell. Generally terms – precisely what happens beyond your business’ walls.

Typically Scope 3 can take into account 80-90 % of an organisation’s emissions. However, as the Scope 3 standard may be the only accepted approach to measuring value chain emissions internationally, measuring Scope 3 emissions could be complex and time-consuming.

That said, you’ll find so many reputational and commercial advantages to understanding Scope 3 emissions. For example, because they are more climate aware, individuals are now more prone to look at a company’s whole value chain with regards to brand loyalty. For businesses who form the supply chain, future contracts might be determined by having a solid sustainability plan set up.

That’s the reason collaboration is crucial. With an increase of organisations in both public and private sectors now declaring Scope 3 within their decarbonisation strategies, the significance of understanding what this signifies for the business’ net zero plans is only going to grow.

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