Scope 3 emissions are a significant contributor to the total carbon footprint of an enterprise, accounting for over 85% of an organisation’s greenhouse gas (GHG) emissions. To reduce their carbon footprint significantly, enterprises in the UK must understand the role of Scope 3 emissions. The UK is a front runner when it comes to fighting against climate change. In 2019, the country became the first major economy to pass laws to end its contribution to global warming by 2050.
The GHG Protocol has categorised carbon emissions into three main types - Scope 1, 2, and 3 emissions. This carbon accounting system, first introduced in 2001, is now the basis for mandatory GHG reporting.
Scope 1 covers a company’s direct emissions, such as those from boilers and vehicles. Scope 2 covers indirect emissions such as purchased electricity.
Scope 3, the largest and most complex category, includes emissions caused by a company’s suppliers and customers.
Emission Type | Definition | Examples |
---|---|---|
Scope 1 | Direct emissions from sources that are owned or controlled by the organisation | Fuel combustion in boilers or vehicles owned by the company |
Scope 2 | Indirect emissions from the generation of purchased electricity, steam, heating, and cooling | Emissions from power plants supplying electricity to the company |
Scope 3 | Other indirect emissions from across an organisation’s value chain, including those by suppliers, partners, and employees | Emissions from the production of purchased materials, transportation of goods in vehicles not owned by the organisation, waste disposal, and commuting by employees |
(Reference: GHG Protocol)
Scope 3 emissions in the UK account for the bulk of many company’s GHG emissions – depending on the industry. For instance, per the UK Parliament’s Measuring and Reporting Public Sector Greenhouse Gas Emissions report, National Highways – a public enterprise sponsored by the Department of Transport, estimated that its Scope 3 emissions were several times higher than its Scope 1 and 2 emissions. The company’s Scope 3 emissions include emissions generated in the production of cement, concrete, steel and asphalt.
The GHG protocol specifies 15 categories of Scope 3 emissions, including upstream activities such as:
The following downstream activities are also included in Scope 3 emissions:
The GHG Protocol helps enterprises understand which emission categories are relevant for them and how to estimate emissions for each category. Companies bidding for government contracts worth over GBP 5 million are required to report five categories out of the above mentioned 15 categories.
The exclusion of most types of Scope 3 emission categories in the UK means potentially significant amounts of emissions are not measured or reported to relevant authorities. Cutting emissions across all scopes, especially Scope 3, has significant benefits as regulators, investors, and consumers push towards a net zero economy.
Research from the Boston Consulting Group (BCG) conducted in 2022 has shown that many organisations still fail to measure their Scope 1, Scope 2, and Scope 3 emissions, with just 10% saying that they do so, compared to 9% in 2021. In addition, respondents to their research estimated an error rate of 25-30% in their emissions measurements. Although 92% of all emissions are Scope 3, according to the Carbon Disclosure Project (CDP), only 12% of organisations surveyed consider Scope 3 their top priority.
Terrascope enables organisations to track and measure emissions across their value chain and all GHG categories. The SaaS-based platform helps large enterprises make data-driven decisions, set ambitious and realistic reduction goals, and start the journey to net zero with confidence.
Book a demo with our emissions measurement expert now!
* Data is based on Terrascope's work and experience with clients