What is Scope 3?

In board rooms around the world, business decision-makers are having conversations about carbon. These conversations are challenging, but they are vital. Vital for the planet but also for businesses to remain compliant with both existing and upcoming carbon legislation.  

In order to effectively reduce emissions, however, we must understand where the emissions come from. Greenhouse gas (GHG) emissions are classified in three scopes by the Greenhouse Gas Protocol, the most widely used international carbon accounting framework. Categorising emissions into Scope 1, Scope 2, and Scope 3 allows and organisations to measure the GHGs associated not only with their direct operations but also the GHG produced by its suppliers and customers.

Scope 1 and 2 emissions are closely linked. Scope 1 refers to direct emissions from operating owned or controlled sources, e.g., fuel in company vehicles. Scope 2 covers to indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the company.  

Scope 3, however, includes emissions that are not directly produced by the organisation and not as a result of the assets they own or control. These indirect emissions occur in a company's value chain: the various business activities and processes involved in creating a product or service. One of the 15 categories of Scope 3 is employee commuting. Although these emissions don’t directly occur in the manufacturing of a product, they are emissions that are required for a business to operate.  

Purchased goods and services is another Scope 3 category. Let’s say your company purchased a newly manufactured server. The production of that server is responsible for around one tonne of CO2e emissions. These are known as embodied emissions – the carbon footprint associated with an asset before it becomes operational – and they would now be part of your company’s Scope 3.

Diagram of Scopes 1, 2 and 3 during th eentire product lifecycleDiagram of Scopes 1, 2 and 3 during th eentire product lifecycle
GHG Inventory Diagram. Source: GreenHouse Gas Protocol

The Challenge of Measuring Scope Three

A major challenge with Scope 3 emissions is that they are, by their very nature, difficult to measure and control. Scope 1 and 2 emissions fall more within an organisation's control. For example, an organisation can reduce gas consumption and switch to battery electric vehicles to cut its scope 1 emissions. Similarly, it could cut invest in becoming more energy-efficient and switch to a green energy tariff to reduce their Scope 2. However, in order to measure and make significant reductions across Scope 3, some organisations may need to take a deep look into their whole value chain and develop solutions for suppliers, customers, and beyond. In addition, measuring Scope 3 emissions is tricky because it can rely on data from external parties, and there are often grey areas around boundaries: where do you draw the line on what should be included?  

When we bear in mind that for many organisations, Scope 3 emissions represent the largest proportion – often over 80% – of total carbon emissions, it seems ridiculous to suggest that companies can make a tangible difference by focussing only on Scopes 1 and 2. Despite still being optional (unlike Scopes 1-2 for larger UK businesses), tackling Scope 3 has numerous operational benefits. Not least among them is that it will enable organisations to identify resource and energy risks as well as efficiency and cost-reduction opportunities in their supply chains.  

Moreover, with consumers around the world becoming increasingly conscious of their own environmental impact, sustainable products are rising in popularity. According to a recent study, 4/5 people describe themselves as likely to favour brands with a commitment to environmental sustainability. So, transparently addressing your Scope 3 emissions now is a great opportunity to create a competitive advantage in the modern marketplace.  

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Carbon Considerations and the Circular EconomyCarbon Considerations and the Circular Economy

The final and perhaps most compelling reason to begin measuring your Scope 3 emissions is to get ahead of the curve. The UK SECR regulation now requires many large businesses to report their scope 1-2 emissions every year, and this is likely just the start. As countries get closer to their legally binding net zero target dates, they will have no choice but to impose stricter regulations and demands on organisations of all sizes – and this will have to include the 80+% of emissions in Scope 3. So, getting started now is likely to be hugely beneficial in the long run.  

At Techbuyer, we are working to create a truly circular IT economy with a thriving secondary IT market. By opting for quality refurbished IT (which we have proved can outperform new with the right upgrades) you can avoid the embodied carbon that is associated with buying new hardware as no additional manufacturing has been required.  

Although it is always an important factor, we will never recommend products based solely on their environmental impact; we invest time and expertise to deliver a comprehensive view of IT solutions. We weigh up and report on several key factors including price, performance, energy draw, compatibility and sustainability to empower our customers to make decisions based on what matters most to them.