What are Scope 3 emissions?

Scope 3 emissions are all indirect greenhouse gas emissions that occur across the value chain of an organisation. These are measured as the consequence of activities that are not owned or controlled by the reporting organisation but are relevant to its operations. Simply put, Scope 3 emissions encompass all indirect emissions generated by an organisation’s upstream and downstream activities.

Examples of Scope 3 emissions

• Purchased goods and services
• Business travels
• Employee commuting
• Water disposal
• Use of sold products
• Transportation and distribution (upstream and downstream)
• Investments
• Leased assets and franchises

Scope 3 emissions account for a significant component of a organisation’s total carbon footprint and often exceed emissions from direct operations (Scope 1) and purchased energy (Scope 2). According to the US Environmental Protection Agency (US EPA), Scope 3 emissions can account for up to 80 per cent of a company's total carbon emissions, thus making them a critical component in developing climate change mitigation pathways.

Supply chain management

Engaging with suppliers to encourage sustainable practices and reduce emissions throughout the supply chain can have a big impact. This effort can include setting emission reduction targets, employing energy-efficient processes and supporting the use of renewable energy sources.

Product design and lifestyle analysis

Companies can reduce Scope 3 emissions by considering environmental factors when designing their products. Life cycle evaluations help identify opportunities for improvement, such as minimising material waste, extending product lifespan or utilising recycled resources.

Transportation and logistics

Cutting down carbon emissions associated with transportation is a critical area for reduction. For example, organisations can reduce emissions from long-distance transportation by optimising routes, promoting the use of low-carbon transportation options and considering local sourcing.

Company travel behaviour

Several ways to reduce employee commuting emissions include encouraging sustainable commuting options such as carpooling or taking public transit, as well as enabling remote work arrangements. Implementing virtual meeting technologies can also help reduce business travel-related carbon emissions.

Waste management and circular economy

Adopting waste reduction techniques, increasing recycling rates, and promoting the circular economy can significantly cut emissions associated with waste disposal and end-of-life products.

Understanding the importance of Scope 3 emissions is a critical first step for businesses as they strive to curb their environmental impact, altogether contributing towards carbon footprint reductions and sustainability goals. To this end, businesses can employ tactics such as supply chain management, product life cycle analysis, transportation optimisation, waste management and collaborative projects. We can develop a more resilient and sustainable future through joint efforts and integration of sustainable practices across the value chain. 

We are committed to setting a net-zero greenhouse gas emission through the Science Based Target initiative (SBTi). GHD will work with SBTi to set a net-zero-based target, as well as a near-term science-based target, to help reduce value chain emissions in alignment with 1.5°C pathways. SBTi is the leading worldwide standard for establishing ambitious corporate emissions reduction targets based on the most recent climate research. It is a collaboration between the United Nations Worldwide Compact, CDP, the World Resources Institute and the Worldwide Fund for Nature (WWF).

"GHD's commitment to sustainability is fundamentally aligned with our company's purpose: that together with our clients, we create lasting community benefit," says Ashley Wright, CEO, GHD. Two years ago, we officially set a goal of becoming carbon neutral by 2025. Read about this initiative here: GHD commits to set net-zero targets - GHD.

Articles referenced

^{Carbon Trust n.d., ‘Briefing: What are Scope 3 emissions?’, retrieved May 17, 2023, from https://www.carbontrust.com/our-work-and-impact/guides-reports-and-tools/briefing-what-are-scope-3-emissions}

^{National Grid n.d., ‘What are scope 1, 2 and 3 carbon emissions?’, retrieved May 17, 2023, from https://www.nationalgrid.com/stories/energy-explained/what-are-scope-1-2-3-carbon-emissions#:~:text=Scope%203%20encompasses%20emissions%20that,dispose%20of%20products%20from%20suppliers}

^{US EPA 2023, ‘Scope 3 Inventory Guidance’, retrieved May 17, 2023, from https://www.epa.gov/climateleadership/scope-3-inventory-guidance}