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How to control your Scope 3 impact

Scope 3 emissions are the hardest to control, yet this does not mean you cannot influence these categories and significantly reduce their impact…

Matt from Carbon Responsible's Team

Matt Paver

COO

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Employee Mobile Emissions – Category 6 and 7: Business Travel and Employee Commuting

Many companies recognize business travel and employee commuting as their highest Scope 3 impacts. You can reduce this by encouraging behavioral changes to prevent the necessity for commuting such as working from home. Although, it must be accepted that some businesses cannot operate online. There are low carbon schemes you can implement, such as incentivising use of public transport over driving into work or participating in grants such as the Government’s tax-free Cycle to Work scheme. To reduce business travel, companies can implement internal management systems for booking business travel so that employees must justify their reason for travelling and are informed about the impact of their decisions. Promoting hybrid and electric vehicles through an employee company car scheme has also proved to be a useful tool in decarbonising business travel and employee commuting simultaneously.

Scope 3 Site Operations – Category 2, 3, 5: Waste, Energy-related Well-to-tank, Capital Goods

Water and waste are Scope 3 impacts, but reducing emissions is limited by them usually being provided by local monopolies. However, you can reduce consumption and improve your recycling rate through employee awareness programmes. which informs them about sensible consumption and recycling practices. Meanwhile, if the option of different waste providers presents itself, research and select the one with less carbon-intensive disposal methods. For instance, does your waste operator dispose of commercial and industrial waste via landfill or through combustion methods that retrieve some of this energy.

Other Scope 3 impacts related to your owned sites include energy related well-to-tank impact. These are the indirect emissions from the production, processing and delivery of fuel and electricity prior to its consumption. The reduction of this impact goes hand-in-hand with reducing your Scope 1 (direct fuel) and 2 (direct electricity) emissions. Reduction strategies can vary from installing Solar PV for onsite electricity generation to replacing natural gas with biofuels. Any of these initial direct changes will in turn affect your Scope 3 energy-related activities impact.

There are also ways to reduce the impact of capital goods such as extending the life cycle of products where possible, researching embodied carbon in products before purchasing, and reviewing calculations of carbon impact of replacing new equipment and machinery – for example if you are looking to replace your HGV fleet with electric vehicles (EVs) you must weigh up where the HGVs are in their lifecycle against buying a new electric fleet with heavy extraction and manufacturing emissions.

Suppliers and Buyers – Category 1: Purchased Goods and Services

It is important to engage with all types of suppliers, to use buyer power to influence emissions reduction in suppliers who depend on your purchases. For example, if suppliers are freighting goods overseas, companies should assess whether these require high emitting services (air freight) that are needed for items like fresh produce or could endure less expensive and carbon-intensive transport methods (shipping freight). If a supplier is not dependent on your business and is not meeting your expectations to reduce its emissions, there is always the option of choosing a more cooperative business. Large companies can gain a competitive advantage by supporting decarbonisation projects of their suppliers through financial aid, while also reviewing compatibility with publicly disclosed emissions reports and reduction targets of large suppliers like DHL. As displayed, mapping out the supply chain can help identify areas for reduction and the mutual-benefit of limiting climate-related risk.

Category 15: Investments

How much one can influence their investments depends greatly on the equity share percentage they hold. However, investors are being held accountable for carbon-intensive operations from companies that only comprise a small percentage of their portfolio. Like selecting suppliers, it’s important to assess emission reduction efforts, and whether they are aligned with your own trajectory. Frameworks, such as the EU’s Sustainable Financial Disclosure Regulations and the UK Task-force Climate-related Financial Disclosures, offer financial market participants increasing insight into climate-related risks. As regulations tighten around these evolving sustainable funds, this lends investors control over listed companies that aspire to be allocated to these funds. For different types of investments, such as project finance, you can be more direct about where you allocate your money, by recognising the expected longevity of the project and its projected yearly emissions. This could be as specific as financing a retrofitting project for energy efficiency.

Conclusion

Undeniably companies cannot exert direct control over their associated Scope 3 emissions. However, this does not impact their ability to influence and significantly reduce the Scope 3 impact. By implementing an effective value chain emissions reduction initiative, companies can lessen the impact of emissions falling outside of their control and help to mitigate the negative impact of business operations.

Please get in touch with our team if you require guidance with your emissions reporting.

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