[Author's Note -- Warning: Possible political incorrectness ahead.]
We believe in the importance of considering Scope 3 emissions.*
EMC [disclosure: the writer's employer] was a sponsor of the WRI/WBCSD Scope 3 work. We have been reporting on emissions from business travel for six years, we have been collecting and examining emissions data from Tier 1 suppliers for three years, and we have been calculating emissions from the electricity to run our products for two years (and estimate it to be on the order of 8 times our operational emissions including losses from power and cooling).
We even made a conscious decision to increase our Scope 2 emissions from electricity to power a hybrid cooling system for our environmental chambers because of the much bigger reduction in the Scope 3 emissions from the production of LN2. It doesn't help our metrics, but it's the right thing to do.
We believe in the importance of considering Scope 3 emissions.
To a point.
Recently, I attended the 2012 Climate Leadership Conference in Fort Lauderdale. Scope 3 was a common subject on panels and in the hallway. In fact, the very first morning I got into a debate with a very dear friend over whether companies should be expected to report on all 15 categories of Scope 3.
He was adamant they should report on them all (14 anyway, if they don't have franchises). I was -- am -- equally adamant that I would be remiss in my duties to EMC if I were to divert money, people and time to reporting in non-material categories over which we have minimal influence; scarce resources that could be put toward driving action to reduce emissions. I don't want to impugn his motives -- he's someone for whom I have great respect. But he is looking at it from the point of view of a consultant with one of the Big Four (five?), which is about nothing if it isn't about measuring and reporting.
The more I thought about it, the more I realized that for someone in a job that is executed almost entirely through influence rather than authority (i.e., me), perhaps the most precious resource that this takes is social capital. Virtually every category of Scope 3 requires data and support from other organizations. Part of my job is to determine whether it's really worth the opportunity cost of putting every category of reporting ahead of using my and my teammates' influence capital to create other systemic changes.
* For those not steeped in greenhouse gas emissions accounting, the key definitions for the scopes are: Scope 1 is direct emissions from your operations. Scope 2 is indirect emissions from the grid electricity that your operation is consuming. Scope 3 is indirect emisisons from everything else related to your business. The recently published specs delineate 15 categories of Scope 3, including emissions from the supply chain, production of purchased capital equipment, employee commuting, use of logistics services, etc. For more information, see the GHG Protocol.
Next Page: The need to exercise restraint and judgment.
The value of scope 3
The value of scope 3 reporting
Finding business answers in Scope 3 data is an opportunity for CSR to move beyond compliance and reporting.
Reporting is currently driving many companies to quantify scope 3. An iterative top down hybrid approach eases the burden of data collection and reduces the cost of finding a comprehensive number.
Value is derived by looking beyond reporting and connecting the scope 3 data with a corporations many different dimensions. The result is environmental factors can be viewed and understood by the cross section of company functions (Finance, Marketing, Sales, R/D etc)and drive top/bottom line.
I totally agree with Kathrin.
I totally agree with Kathrin. What's needed here is similar in process to a materiality analysis we do on the CSR issues to help prioritize the (few) things a company is going to work on that impact sustainability AND the business.
The difference here being that there may be 3 dimensions to take into consideration:
1. Ability to measure/report
2. Expected size of emissions
3. Ability to influence
Even a simple Low, Medium, High filter applied to the above 3 dimensions would surface the key Scope 3 categories to report on.
On behalf of the GHG
On behalf of the GHG Protocol, we agree with the suggestion that “reporting every single category of scope 3 is [not] the right thing to do for every company,” and the Scope 3 Standard (http://www.ghgprotocol.org/standards/scope-3-standard) does not suggest that it should be. The standard is designed to help companies account for their value chain greenhouse gas emissions in a consistent yet flexible manner, and to enable companies to focus on those categories of emissions that offer the most opportunities for emissions reductions. Some companies may choose to measure all 15 categories, but if certain categories are not relevant to a company, the standard allows for these to be excluded, as long as an explanation is provided.
A scope 3 inventory should begin with a screening of all categories to quickly get a complete picture of a company’s climate impacts. The company can then identify the most relevant areas to prioritize data collection efforts (see Scope 3 Standard, Chapters 6 and 7). When the scope 3 standard is applied in this way, it provides a framework to help companies focus their measurement efforts in the right places and – most importantly – manage their value chains to drive innovation and achieve emissions reductions.
Wonderful Explanation. I
Wonderful Explanation.
I totally agree with your use of "social capital". Our time and that of our partners is one of the most precious things. So I agree that we must think where we can invest to get the biggest returns.
Thanks for your excellent
Thanks for your excellent summary of the issues with Scope 3. With companies oftern struggling to make the business case for our sustainability initiatives, we cannot afford to calculate each and every category of Scope 3 emissions simply to satisfy our own or someone else's curiousity. There has to be a sound business reason for undertaking the expense and effort and at least some potential value at the end of the exercise. The rule of thumb has always been, if you are not prepared to deal with the results, do not make the assessment. You've offered several examples that do not make sense for EMC and that is likely the case for most of us. One of the easiest examples if employee commuting; it is difficult to track and for a manufacturer or OEM, the emissions from commuting will generally be a small fraction of the footprint. I sincerely hope our stakeholders and other participants in this discussion will understand and act accordingly.