As the Peter Drucker quote goes: “If you can’t measure it, you can’t improve it”.
And that’s certainly true about Scope 3 Emissions, which are greenhouse gasses indirectly produced by an organization, the most challenging emissions sources for organizations to measure.
Because they’re not directly created by an organization but produced by customers, employees and vendors, many organizations have no idea about their output—or how to go about reducing it. And that’s a big deal because, according to Deloitte, Scope 3 Emissions account for more than 70% of an organization's carbon output.
Most leaders who are thinking about their organization’s environmental impact want to know: what are Scope 3 emissions, how can they be measured and, most importantly, how can they be reduced?
Read on and gain comprehensive guidance and clarity of Scope 3 emissions.
What are Scope 3 Emissions?
According to the EPA, “Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain.”
In other words, these are emissions produced not by the company but by customers using their products/services, vendors who supply the business or even employees getting to and from work. It’s everything used to produce a product, consume a product and, eventually, dispose of that product.
For example, Scope 3 emissions can include:
- Items or services purchased by the organization
- Fuel or energy emissions
- Logistics and transportation
- Employee commuting
- Business travel
- Leased or rented assets
- Investments
- Waste from operations
- Energy used by customers for product/service
These differ from Scope 1 and Scope 2 emissions, which include direct emissions from controlled sources and indirect emissions from purchased energy, respectively. A company could cut Scope 1 emissions by installing efficient machinery and reduce Scope 2 emissions by switching from carbon-based energy to wind or solar.
However, even if a company makes these worthwhile changes, they’ll still be churning out substantial Scope 3 emissions.
In the context of IT and technology, Scope 3 emissions are present at every stage of the device lifecycle; mining, manufacturing, transport, use and even disposal are all sources of GHG.
For example, Scope 3 emissions in technology and IT can include:
- Energy consumption of a third-party data center
- Trucks transporting devices to retailers
- Employee laptops, cell phones and tablets
- Customers watching promotional videos on their devices
- Carbon generated by equipment when mining for raw materials
- Prematurely disposing of still-functional equipment
- Not recycling broken or outdated IT assets
With technology contributing as much as 4% of greenhouse gasses globally (and rising), putting a sharp focus on how your IT assets and technology influence your Scope 3 emissions makes good sense.
The Challenge of Scope 3 Emissions
Get Scope 3 Emissions under control and your company can seriously limit its negative impact on climate change. However, the challenge in quantifying how much your customers and suppliers produce is that they are external factors.
You might know exactly how much CO2 your manufacturing plant churns out or the impact of your office building’s HVAC system, but anything upstream or downstream is difficult to assess.
However, that doesn’t mean it’s impossible to track—or reduce.
How to Measure and Track Your Organization’s Scope 3 Emissions
First, determine all the possible sources of Scope 3 emissions, anything produced by your employees, suppliers or customers and beyond your direct control.
By understanding what data to gather (or estimate), you begin to build a picture of not only what to measure, but areas to improve upon.
There are several ways to gather and analyze data, including spend-based methodology, which looks at the cost of goods and services and gives an approximate estimate of GHG emissions, or supplier-based methodology, which uses primary data from suppliers. You can also refer to the Carbon Disclosure Project's (CDP) resources to build an understanding of how companies in your industry typically perform.
Alternatively, you can leverage a hybrid method, which takes into consideration CDP data and both spend-based and supplier-based methodologies for an accurate but resource-intensive option. If you’re looking for a place to start, try Brightest’s helpful Scope 3 emissions calculator.
Or, if you’re looking for concrete numbers and easier ways to gather data, check out solutions like WatchWire and Supply Shift, two solutions that help you collect data to assess suppliers’ impact and identify improvement areas.
When it comes to tracking the Scope 3 emissions of your IT and technology, GreenTek Solutions helps in a major way. As a data-driven organization, GreenTek collects dozens of data points for its clients, from the amount of raw material diverted to reuse to the number of devices refurbished to total GHG emissions reduction as well as the amount of toxic metals diverted from landfill. Organizations have full access to this information to understand how properly disposing of, recycling or refurbishing IT assets is shrinking their carbon footprint.
After partnering with GreenTek Solutions on IT asset disposition, recycling devices, decommissioning operations or a variety of important tasks, your organization gets access to a treasure trove of data. By working with a supplier making a positive impact on GHG emissions, both through their own operations and by helping clients, it’s an easy way to make a large dent in your Scope 3 emissions.
In 2022 alone, GreenTek Solutions helped clients extend the life of 100,000+ devices…
How to Reduce Your Organization’s Scope 3 Emissions
Although Scope 3 emissions are not directly controlled by your organization, hundreds of companies across all industries are investing in improvements.
A French company, Schneider Electric, is working to cut 50% of emissions from its suppliers’ operations over the next 2 years, training 1,000 vendors in decarbonization methods. Instead of writing off Scope 3 emissions as beyond their control, the company is taking action and getting noticed; they’ve won plenty of awards for their efforts and who doesn’t like good press?
So, what can you do?
From choosing to work with companies aligned with Science Based Targets, which helps private organizations establish fact-based emissions reduction goals, to analyzing and discussing your vendors’ operational efficiency, there are many ways to ensure your suppliers are doing their best. Some organizations even create a supplier code of conduct to hold suppliers to certain standards or, like Schneider Electric, work directly with suppliers and ecosystem partners to share best practices, provide technical support and set goals.
Internally, organizations can reduce Scope 3 emissions created by employees through effective policies. Whether it’s offering reimbursement for public transportation costs, choosing sustainable 401(k) investments, implementing a paperless organization or removing single-use items from the office, leaders have options. Importantly, organizations should consider their company culture, building incentives, awards and performance reviews around sustainability; rewarding employees for identifying GHG-reducing actions is an easy place to start.
Downstream, helping customers efficiently use your products and services helps, too. From creating recyclable packaging to more efficient logistics to donating revenue to reduce emissions, customers are part of the solution. Communicating your organization’s commitment to earth-friendly causes and initiatives not only builds goodwill with consumers, it also encourages end-users to do the right thing.
Importantly, you’ll need to build buy-in from internal stakeholders; these efforts may take budget allocation, time and talent resources or major changes to supply chain, marketing and logistics. Helping influential stakeholders understand why Scope 3 emissions matter in terms of investments, customer and employee perception and long-term viability or valuation should be a key part of the strategy discussion.
Ready to reduce your Scope 3 emissions?
Focusing on your technology’s impact on GHG emissions offers a quick, significant positive impact. Learn more how GreenTek Solutions can help reduce your Scope 3 emissions through refurbished equipment sales, IT asset disposition, recycling, e-waste disposal and more, gaining actionable insights you can use to measure and reduce your organization’s Scope 3 emissions.
