What Are Scope 3 Emissions? Big Business Is Responsible for More Emissions Than You Think

Scope 3 emissions are a serious environmental problem, but how are companies able to mitigate the damage they’ve already done?


Sep. 2 2021, Published 2:04 p.m. ET

What are scope 3 emissions?
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After years of warnings about the dangers of carbon emissions, our planet has reached a point of serious environmental instability. As the world readies itself for inevitable and destructive changes, businesses are finally becoming cognizant of their role in climate change, and the potential reality of a global economic collapse due to migration, flooding, heat, or famine. And the first mistake that many of these businesses must undo involves the passive damage caused by their scope 3 emissions.

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What are scope 3 emissions?

As explained by Greenhouse Gas Protocol, scope 3 emissions are "all indirect emissions ... that occur in the value chain of the reporting company, including both upstream and downstream." Basically, scope 3 emissions are all of the emissions a company produces indirectly that they do not "own," and that are not accounted for by scope 1 and 2 emissions.

As per Plan A Academy, scope 1 emissions refer to a company's direct emissions, produced by categories such as fuel, heating, and vehicles. Scope 2 emissions are a company's owned indirect emissions, such as those produced by energy purchased from a utility company.

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According to the EPA, scope 3 emissions fall into several distinct categories — keep reading for a look into some of them.

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Scope 3 emissions caused by waste:

According to Plan A Academy, upstream activities are those activities that involve waste, travel, and fuel emissions created by the main organization itself. Waste emissions include any that are created as a result of the production of goods or services the main organization has purchased in a given year. Usually, this waste comes from worn-out office supplies like furniture, computers, and the like, or the actual materials, components, and parts used in production.

Physical waste that is sent to landfills or wastewater treatment plants also contributes to greenhouse gas emissions. According to Plan A Academy, disposing of waste emits methane and nitrous oxide, two compounds that do even more damage to the atmosphere than carbon emissions.

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Scope 3 emissions caused by travel:

Travel is perhaps the most significant source of scope 3 emissions, as explained by Plan A Academy. These emissions are the result of business travel either by car, rail, or air. Air travel, in particular, is a huge source of carbon emissions in the modern age. Mileage accrued through employee commuting is also considered to be a part of an organization's scope 3 emissions totals.

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Other travel emissions that are considered part of a company's scope 3 emissions include the emissions created by customers, as well as warehousing by third-party companies.

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Scope 3 emissions caused by fuel production:

The fuel that an organization uses is accounted for when tallying scope 1 and 2 emissions, but scope 3 emissions take into account the amount of fuel burned to create the parts, pieces, or equipment organizations use in the course of their business.

For example, if the company that makes the conveyor belts for the main organization uses coal power to make those belts and dumps its waste plastic into a nearby river, the emissions caused by those actions are considered scope 3 emissions of the main organization. This would also account for how the emissions caused in the production of said coal, oil, or natural gas.

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Scope 3 emissions caused by franchises:

Though franchises or leased assets of the main organization will likely have their own travel, waste, and fuel emissions, those emissions are often counted as scope 3 emissions of whatever large organization happens to own them, as per Plan A Academy.

How do scope 3 emissions affect the climate?

Scope 3 emissions affect the climate in the same way that other CO2 and greenhouse gas emissions do: they damage the ozone layer and warm the atmosphere. According to a 2017 study, as covered by the Business & Human Rights Resource Centre, 100 of the world’s biggest companies account for more than 70 percent of the planet’s greenhouse gas emissions.

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With major companies accounting for so many scope 3 emissions, it's clearer than ever how much power big business has in the climate crisis.

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Why should businesses be aware of their scope 3 emissions?

These days, companies are measuring their scope 3 emissions in order to find out how they can reduce their environmental impact. According to Carbon Trust, measuring these emissions can help organizations to address problems in their supply chain, assist suppliers in fixing any environmentally destructive processes, improve energy efficiency, and assist employees in reducing their own emissions.

It might seem like a tall order for some businesses, but our climate can ill-afford for businesses to continue to turn a blind eye to the damage they are currently doing to the environment, even if that damage is dealt through indirect means.

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