14 November 2023

How to reduce Scope 3 emissions

Road with cars going on the water between islands. Profile image of Johanna Forseke.

Around the world, the race is on to achieve net zero. That is, a position where the amount of greenhouse gases we add to the planet is no more than we take away. Transport accounts for nearly one-quarter of global energy-related CO2 emissions and, as a result, large companies are already focused on reducing and reporting their direct (Scope 1 & 2 emissions). But, to advance climate goals, it’s time for companies – of all sizes – to find a way to reduce Scope 3 emissions.

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What exactly are Scope 1, 2, 3 emissions?

The Greenhouse Gas Protocol classifies an organization’s CO2 emissions into three scopes:

Scope 1 emissions

Scope 1 emissions are direct emissions from owned or controlled sources. They are the easiest to address, in terms of measuring, reporting, and acting on. If you have at-work drivers, Scope 1 emissions incorporates business travel in work vehicles.

Scope 2 emissions

Scope 2 refers to indirect emissions from purchased energy. This includes the electricity used to charge your company’s electric vehicles (EVs).

Scope 3 emissions

Scope 3 emissions can make up 90% of a company’s CO2 emissions. But they are less clear, which is one of the reasons that reporting wasn’t initially made mandatory. Scope 3 emissions include all other indirect emissions that occur in the value chain of your company. This includes emissions from employees commuting in their private vehicles, the transportation of goods bought by your company and the emissions generated through your products’ lifecycle (even after the products have left your company).

Why do companies need to report Scope 1, 2, and 3 emissions?

Almost every government in the world has signed the Paris Agreement, committed to addressing climate change. Since then, many countries have also joined the “Race to Net Zero”, an official United Nations campaign dedicated to achieving a net-zero carbon economy by 2050.

To achieve the goals, many governments have introduced reporting regulations that require companies (currently mainly large or listed companies) to include Environmental, Social & Governance (ESG) related items in their annual reports.

The reporting of Scope 1 and 2 emissions is mandatory, while the reporting of Scope 3 emissions has remained voluntary. However, the standards-setting body, the International Sustainability Standards Board (ISSB), which heavily influences regulations around the world, included mandatory Scope 3 emissions reporting in its latest framework.

Are Scope 3 emissions difficult to measure?

Managing Scope 3 emissions is the most challenging, since it involves activities that take place outside of your control. However, it is possible. And it’s a necessary aspect of ESG reporting. If your company is large enough to be subject to mandatory ESG reporting and you need to measure Scope 3 emissions, it’s a case of working with your supply chain partners to help them implement a program in which they collect and share their CO2 emissions data with you.

If you are one of the smaller companies that supplies to a large company, it’s important that you start collecting this data, even if you don’t have to submit ESG reports yourself. Without it, large companies might not be able to work with you, since it’s mandatory for them to obtain this information about their Scope 3 emissions.

Reporting CO2 emissions brings additional benefits

Being transparent about your company’s impact on the environment can be empowering for companies of all sizes. And tracking your Scope 1, 2, and 3 emissions can have many associated business benefits. This includes:

Employee satisfaction

Employees that feel looked after are more inclined to be loyal and productive. Helping them to prioritize their safety and reduce their CO2 emissions from driving by being transparent about their (and your company’s) environmental and social impact is an important part of a driver wellbeing program.

Customer demand

Customers are increasingly looking for brands that align with their sustainable values. It therefore makes sense to be transparent about your impact on the planet and open about your climate goals.

Investor satisfaction

It’s no secret that investors are placing more importance on sustainability when making investment decisions. Being transparent about your company’s climate and societal impact (including road safety performance) is likely to be regarded favorably by potential investors.

Competitive advantage

Companies are increasingly having to consider sustainability throughout the supply chain, so climate impact transparency (including Scope 3 emissions) can give you a competitive advantage when it comes to partnerships and tender processes.

Uncovering Scope 1, 2, 3 emissions data from a connected fleet

At Greater Than, we convert existing GPS data into a climate impact score to quantify drivers’ environmental impact. This provides standardized climate impact data (including EV battery savings) for Scope 1 and 2 emissions reporting.

If your at-work drivers have a telematics device, connected vehicle, or already use a company safety program through a mobile phone app, it’s quick and easy to share your data with us to access these new insights. The same technology can be used by your supply chain partners to meet your Scope 3 emissions reporting requirements. We’re happy to meet with you and your partners to explain how the technology works, and how easy it is to get started.

To discover more about how we help you uncover data to report Scope 1, 2, 3 emissions using only GPS data, please contact us or book a meeting.