Page 182 - CW E-Magazine (9-4-2024)

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Table 1: Methods of calculating Scope 3 emissions However, if the emissions associ- uniform data collection formats and that corporations currently collaborate dardise the exchange of carbon emis-
Calculation method Description ated with the purchased goods are maintaining data quality across diverse with offer a one-time summary of sions data.
Spend based method Calculating a fi rm’s indirect emissions from its reduced and accurately accounted for, suppliers. Efforts to address this chal- spend-based Scope 3 computations. It Scope 3 Emissions Decision Tree
lenge include industry initiatives that is imperative for companies to lever-
the company can demonstrate an in-
purchased goods/services. crease in production concurrent with standardise methodologies for calcula- age this as a benchmark for analysing The GHG Protocol provides a Scope
Fuel based method Calculating emissions by identifying fuel types and a decrease in emissions. This scenario ting product carbon footprint. top suppliers for targeted data collec- 3 Emissions Decision Tree to navigate
quantities used, and applying relevant emission underscores the importance of accu- tion, rather than confi ning the estima- the intricacies of supplier data. The tree
factors. rate emissions accounting in achieving GHG Protocol for scope 3 emissions tion-based data solely for reporting prioritises the use of supplier-specifi c
Activity based method Calculating emissions through value chain activity sustainability targets while maintaining The GHG Protocol offers guide- purposes. Obtaining precise emissions methods, emphasising their reliability
analysis and relevant emission factor application. business growth. lines for calculating Scope 3 emissions, data can pose a challenge, and the arti- and accuracy, ultimately positively infl u-
Supplier specifi c calcula- Calculation by gathering product-level GHG data delineating two types of data applicable fi cial intelligence capabilities promised encing the brand image. Following the
tion method from all suppliers. Accurate, supplier-specifi c data is to this process: primary and secondary by software companies cannot replace steps outlined in the GHG Protocol
Hybrid method Calculated with a combination of various Scope 3 pivotal for such decisions, encompass- data (GHG Protocol team, 2011). data directly procured from your own decision tree empowers companies to
methods using supplier-specifi c and secondary data. ing factors like the use of recycled raw Primary data, directly furnished by suppliers. make informed decisions that faithfully
(Terrascope Team, 2023) materials, energy sources, and other suppliers or other sources, pertains to represent the emissions of their supply
unique considerations. As Tier-1 sup- specifi c activities within the company’s Nonetheless, by instituting an effec- chain, contributing meaningfully to
which intends to expand its business sions associated with procuring the raw pliers increasingly base their purchas- value chain. For instance, PepsiCo tive procedure for gathering and verify- the overarching goal of reducing their
and augment the production of Product material required for its manufacture ing decisions on carbon footprint, this utilised primary data to comprehend ing data from your suppliers in accor- carbon footprint.
X. This company has set a target, are also likely to rise, given that the infl uence permeates through the sup- the actual emissions of Tropicana and dance with international standards, you
approved by the Science-Based Targets emissions methodology is intrinsically ply chain, establishing a feedback loop monitor the progress of supply chain can ensure access to dependable and Confi dentiality of supplier data
initiative (SBTi), to reduce its Scope linked to the quantity of material pur- that accentuates the demand for precise decarbonisation. Conversely, secondary precise information. This will aid in As companies delve into the collec-
3 emissions by 20% by the year 2030. chased. This correlation renders the data. While gathering accurate data data encompasses industry aver- making informed decisions regarding tion of detailed, supplier-specifi c data
As Company A continues to increase achievement of the SBTi target increas- from the supply chain is a critical step, ages from databases like GaBi and your sustainability initiatives. Further- for Scope 3 emissions, safeguarding
the production of Product X, the emis- ingly challenging. the broader challenge lies in ensuring EcoInvent, or fi ndings from literature more, this could have a direct infl uence confi dentiality emerges as a paramount
studies available online. The GHG Pro- on your future fi nancial performance, concern. This data holds strategic busi-
tocol’s decision tree underscores a criti- particularly in light of the escalating ness insights and must be handled with
cal challenge for companies employing tax implications associated with carbon care to prevent misuse. However, with
supplier-specifi c methods: ensuring the emissions. the implementation of appropriate mea-
Co 2 CH 4 N O HFCS PFCS SF 6 NF 3 availability and quality of data to align sures, companies can strike a balance,
2
with business objectives. Balancing specifi city and accuracy ensuring accessibility for accurate
When gathering data from suppli- emissions calculation, while preserving
Scope 2 Scope 1 While many companies effectively ers, there’s a delicate balance between confi dentiality. Establishing trust with
INDIRECT DIRECT assess emissions using industry-ave- specifi city and accuracy. The specifi - suppliers becomes pivotal in navigat-
rage databases, complications arise city of the collected data, tailored to the ing these challenges. This involves for-
when a substantial part of the inventory purchased product or service, hinges malising agreements through legal con-
is comprised of suppliers with limited on the reliability of the supplier’s data tracts and aligning internal data usage
Scope 3 Scope 3 resources to provide data. The 80-20 sources and the level of detail in the in- policies with the interests of suppliers.
INDIRECT INDIRECT
rule posits that 80% of Scope 3 emis- formation gathered. Ensuring the accu- It is noteworthy that as more companies
purchased sions stem from 20% of suppliers; how- racy of collected data requires substan- seek supplier-specifi c data, reciprocity
goods and transportation
services purchased electricity, and distribution ever, in numerous instances, this 20% tial effort to validate that the supplier’s in legal agreements can be encouraged
steam heating & cooling leased investments can represent over 50 suppliers, making allocation method aligns with industry when sharing data as a supplier.
for own use assets company
capital facilities it a formidable task to monitor emis- standards. The risk of the data not truly
goods franchises sions from each one (Laoyan, 2022). representing the emissions of the sup- Leveraging technology for primary
employee processing of
fuel and commuting sold products ply chain underscores the need for a data sharing
energy related
activities business According to the Greenhouse Gas robust process to guarantee data qua- Corporate sustainability teams
travel company use of sold leased assets
transportation vehicles products (GHG) Protocol, there exist four metho- lity. In this landscape, initiatives like the across organisations strive to concen-
and distribution waste end-of-life
generated in treatment of dologies for emissions calculation. Partnership for Carbon Transparency trate their initiatives in areas where
operations sold products
However, organisations have predomi- (PACT) hosted by the World Business the return on investment is substantial.
Upstream activities Reporting company Downstream activities nantly concentrated their efforts on Council for Sustainable Development However, the process of gathering sup-
the spend-based method. The majority (WBCSD) play an important role in plier-specifi c data for the calculation of
Fig. 1: Scope 1, Scope 2 and Scope 3 emissions
(GHG Protocol Team, 2013) of consultants or software providers creating a global standard that can stan- Scope 3 emissions can be both labour-
182 Chemical Weekly April 9, 2024 Chemical Weekly April 9, 2024 183

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