If what really matters is reducing emissions, does the pursuit of perfect scope 3 figures really matter? Or is it (scope 3 geek pun alert) merely waste generated in operations? 

Scope 3 emissions. The very mention of them is guaranteed to get a reaction from anybody working in sustainability. An eye roll, a shudder. Maybe even a shiver of excitement?

Pity then the poor folks who’ve been told that they need to measure them in their business but don’t yet know what they are. The concept, and the effort required to measure them, can sound daunting in the extreme.

Since the introduction of the “GHG Protocol Corporate Value Chain Accounting and Reporting Standard” in 2011, the concept of scope 3 emissions has become by far the dominant topic for those working in sustainability, and those required to understand their business’s carbon footprint.

Yet, the world is still getting warmer and emissions are still rising. So, is it really worth measuring the fabled scope 3 emissions, or is the whole thing a waste of time?

Our team spends a lot of time measuring these for our customers, and there are good reasons for doing so (which I’ll get to in a minute). But we all agree that there are flaws with the concept. With that in mind, I thought I’d make an impassioned case both against and for.

The case against measuring scope 3 emissions

They’re confusing

When we introduce people to the concept of scope 3 emissions, they find it confusing to understand that they’re not one thing, but actually 15 different categories (like purchased goods and services, business travel, and capital goods). Often, many don’t apply to their business at all. It makes for an overwhelming start to the whole thing.

As an accounting principle, lumping these indirect emissions together makes some sense. As an approach to help people understand issues and gather data, it sucks.

We find that when most people talk about scope 3 emissions, they mainly mean emissions from their suppliers. Those new to the topic are often surprised to find that it also includes things (vaguely) within their control like business travel and waste generated in operations. They’re always really thrown by fuel and energy-related activities.

And then there’s the fact that, when we talk to customers, they’ll always scratch their heads and say, “Hang on, if our scope 3 emissions are someone else’s scopes 1 & 2, aren’t we double counting?”

To which the only reasonable answer is ‘sort of, yes’, although you’re not going to capture your full climate impact unless you do it.

You’re unlikely to learn anything new

On the face of it, the concept of measuring indirect emissions makes some sense. However, I’ve yet to come across a result that was a surprise. If your company buys and sells goods, it isn’t usually a surprise to find that doing this is your greatest source of emissions.

If we already know which activities are likely to produce the most emissions, is it really worth putting a number against them? Or is it just a way of putting off taking action?

I always liken it to me eating ten cream cakes a day. I don’t necessarily need to know the exact calorific value of these – I just need to eat fewer of them.

They’re a ton of work

Calculating scope 3 emissions is challenging (and infinitely more so than calculating scopes 1 and 2). But the real headache is gathering the data required for the calculations – now that’s hard.

Much though I like the clear examples that GHG Protocol gives when explaining how to calculate the various categories of scope 3 emissions, almost all of them are unrealistically simplistic for most businesses.

Real businesses don’t have nice clear data from suppliers and transport companies to hand. This data sits in a load of different systems and spreadsheets, if it exists at all. Gathering it involves a lot of people, who are already busy with their day job, asking some quite abstract questions of other busy people.

They can be wildly inaccurate

Measuring emissions from energy (scope 1 & 2) isn’t an exact science but at least there’s a rigour to them. Scope 3 emissions can be rather woollier.

We work with primary data, but not everyone does. That can mean that the data used to measure scope 3 is estimated which, in turn, relies on emission factors that are also often highly estimated. The results can be so inaccurate they need to be taken with a pinch (or bucket) of salt.

Even using primary data, most companies still use ‘spend-based’ emission factors to calculate their emissions from purchasing, usually their largest emissions source. These factors are basically a broad estimate of the amount of carbon produced by a certain activity per unit of spend. This means the result can vary tremendously based on inflation, currency conversion rates, and the way in which data is categorised into different activities.

A study from Kings Business School (with whom we’re currently working on a separate study) highlights this extremely well. It compared the emissions from purchased goods and services for an example company using methodologies based on either the amount spent or the volume purchased. The results showed that the difference in magnitude between these was anywhere between 4,6 and 6.7 times!^[1]

They can distract us from tackling the real issue

The obvious solution to the point above is to gather more accurate data. This seems to be where we see most people, very nobly, concentrating their time. And you can gather more accurate data (for example, by using Environmental Product Declaration data in your carbon calculations).

But if we already know where the issues lie, shouldn’t we be spending more time looking at reducing emissions instead? Surely the aim is to drive the numbers downwards, regardless of how accurate they are.

In truth, reducing scope 3 emissions relies on one simple thing – getting your suppliers, and their suppliers, to use more renewable energy. Maybe we should be concentrating our efforts on that instead?

The case for measuring scope 3 emissions

It makes people think

Daunting and confusing they may be, but the concept of scope 3 emissions really makes people think. When we explain to people that their business is not only responsible for the carbon footprint of their offices, but that they also bear some responsibility for the emissions indirectly produced as a result of their activities, it generally sparks an interesting discussion.

The structure of the scope 3 categories, along with the process of determining which ones are relevant, adds some useful structure to the discussions. There’s no doubt in my mind that this structure has helped a lot of people think hard about how emissions are produced, and the part their business has to play in this.

Then, this new found awareness drives change. We ‘ve worked with lots of clients who’ve changed their procurement choices – and even come up with clever innovations – that make a real difference as a direct consequence of measuring their scope 3 emissions. Which brings us to…

You manage what you measure

There’s something about putting a number on things that sparks action, it’s a starting point for discussions on how it can be reduced.

Putting individual numbers on scope 3 categories helps to break this down further, allowing individual departments to look at what they can do to reduce travel, purchasing, etc.

Not measuring has the opposite effect. It keeps data hidden. And no organisation will improve what it can’t see.

You’ll always learn something valuable

Haven’t I just said you won’t learn anything new from measuring scope 3? Hogwash. True, you may not be surprised by the results. They may not be exciting. And all the measuring in the world won’t make change happen unless you actually make change happen.

But whether it’s identifying new data collection and management measures, or finding specific emissions hotspots, you’ll always learn lots from scope 3 calculations.

Good things are happening

Over the past couple of years, we’ve seen a massive increase in businesses talking to their suppliers about measuring their emissions and reducing their energy. Which is, frankly, wonderful as change really tends to happen when a business’s customers demand it.

It’s likely that none of this would be happening without businesses calculating their scope 3 emissions and looking at ways to reduce it.