For many companies, Scope 3 emissions—indirectly controlled greenhouse gas emissions from a company’s value chain—make up most of their total emissions, more than Scope 1 and 2 combined. While each scope is important for a company to fully understand its environmental impact, Scope 3 emissions demand the most attention, as they offer the most potential to reduce the total footprint. By investing in Scope 3 emission reduction, companies have the opportunity to achieve not only substantial sustainability progress but also see a number of other benefits.
What are Scope 3 Emissions?
Scope 3 emissions encompass a wide range of indirect value chain activities, making it a miscellaneous category for indirect emissions not covered by Scope 2. Scope 2 emissions are indirect emissions from heating, cooling, steam, or electricity purchased for a company to operate. Scope 1, on the other hand, is direct emissions, meaning those that the company directly owns and generates by being in business. Scope 3, by contrast, goes beyond a company’s operational control, including emissions caused by purchasing goods and services, transportation and distribution included, and the use of sold products.
To address and mitigate these Scope 3 emissions, companies have different options of approaches to take. They can work with suppliers to promote sustainable sourcing practices, optimize transportation routes to minimize emissions during product distribution, and develop products with extended life cycles and lower environmental footprints. These types of initiatives are a tangible way that companies can show their commitment to sustainability and make a positive change in their operations.
Three Key Benefits of Reducing Scope 3 Emissions
Reducing emissions leads to environmental, business, and compliance-related benefits, making Scope 3 emissions tracking and monitoring a smart strategy from multiple angles. Here are three such benefits.
Lower GHG Emissions
The primary advantage is reducing greenhouse gas emissions in the environment, as the world continues to hear from climate change experts on the urgency of investing in sustainability. With so many sources of Scope 3 emissions, this category offers opportunities to take advantage of low-hanging fruit—relatively simple changes with little to no sacrifice that result in clear emissions reduction. By aligning their sustainability initiatives with emission reduction targets, companies can be confident their actions support their values and, in this way, even gain the secondary advantage of opening themselves up to new markets that prioritize sustainability.
Opportunities to Reduce Transportation Spend
It’s easy to associate eco-friendly with more expensive, but when reducing Scope 3 emissions, this is not necessarily the case. In many ways, sustainable options are more cost-effective — for example, regarding freight transportation. Companies that optimize their transportation and distribution processes to minimize emissions decrease their mileage, fuel consumption, and transportation costs at the same time. Streamlined and optimized supply chains can reduce inefficiencies, leading to better resource utilization and decreased operational costs. Eco-friendly transportation options — like utilizing fuel-efficient vehicles or incorporating renewable energy sources for logistics — can also mean cost savings in the long term while contributing to lower carbon emissions.
Streamlined Regulatory Compliance
Sustainability initiatives bring the added benefit of helping companies ensure they comply with regulations, including reporting requirements. This can improve a company’s overall reputation. With an increasing focus on sustainability and climate action, different governing bodies are implementing stricter regulations and standards to curb greenhouse gas emissions. A proactive approach minimizes the risk of non-compliance penalties and fosters positive relationships with customers, investors, and communities. With greater value placed on sustainability, the ability to meet requirements quickly can mean a competitive advantage for the business.
For Reduced Scope 3 Emissions, It’s All About Who You Know
Companies are realizing the importance of strong partnerships to address and reduce Scope 3 emissions. This can start with collaborating with suppliers and other supply chain partners to identify opportunities for sustainable sourcing, efficiency improvements, and more. But emerging as an option that covers a broader range of opportunities are specialized sustainability organizations that companies can work with to gain carbon emissions data, insights, and other tools. These sustainability partners bring tracking, analysis, and reporting capabilities to the table, plus the assurance of reliable emissions data from a range of sources. With insights offered by this type of partner, companies can better understand their Scope 3 emissions and more easily identify areas where reductions can be made.
Find the Right Partner for Meaningful Sustainability
With a sustainability partner on their side, companies can develop actionable strategies to lower emissions, optimize their supply chains, and invest in sustainability. Greenabl brings a digital platform, expert consulting, real-time analytics, accurate emissions measurement, and certified carbon credits to shippers to support their sustainability initiatives with the goal of a more sustainable future, one supply chain at a time.
To learn more, get started with a call with Greenabl today.