CO
CH
N O
HFCs
PFCs
SF
NF
Scope 2 INDIRECT
Scope 1 DIRECT
Scope 3 INDIRECT
Scope 3 INDIRECT
Purchased goods and services
Transportation and distribution
Company facilities
Investments
Leased assets
Purchased electricity, steam, heating & cooling for own use
Capital goods
Franchises
Employee commuting
Processing of sold products
Fuel & energy related activities
Business travel
Leased assets
Company vehicles
Use of sold products End-of-life treatment of sold products
Transportation and distribution
Waste generated in operations
Upstream activities
Reporting company
Downstream activities
Figure 3 Scope 1, 2, and 3 emissions (GHG Protocol, 2013; Chacko, 2023b)
emissions has proven to be the most expedient method. However, when it comes to accounting for decarbonisation, this approach has been markedly inefficient. Take, for instance, Company A, which intends to expand its business and augment the production of Product X. This company has set a target, approved by the Science Based Targets initiative (SBTi), to reduce its Scope 3 emissions by 20% by 2030. As Company A continues to increase the production of Product X, the emissions associated with procuring the raw material required for its manufacture are also likely to rise, given that the emissions methodology is intrinsically linked to the quantity of material purchased. This correlation renders the achievement of the SBTi target increasingly challenging. However, if the emissions associated with the purchased goods are reduced and accurately accounted for, the company can demonstrate an increase in production concurrent with a decrease in emissions. This scenario underscores the importance of accurate emissions accounting in achieving sustainability targets while maintaining business growth. Accurate, supplier-specific data is pivotal for such decisions, encompassing factors like the use of recycled raw materials, energy
sources, and other unique considerations. As tier 1 suppliers increasingly base their purchasing decisions on the carbon footprint of the purchased goods and services, this influence permeates through the supply chain, establishing a feedback loop that accentuates the demand for precise data. While gathering accurate data from the supply chain is a critical step, the broader challenge lies in ensuring uniform data collection formats and maintaining data quality across diverse suppliers. Efforts to address this challenge include industry initiatives that standardise methodologies for calculating product carbon footprint. GHG Protocol for Scope 3 emissions The GHG Protocol offers guidelines for calculating Scope 3 emissions, delineating two types of data applicable to this process: primary and secondary data (GHG Protocol, 2011). Primary data, directly furnished by suppliers or other sources, pertains to specific activities within the company’s value chain. For instance, PepsiCo utilised primary data to comprehend the actual emissions of Tropicana and monitor the progress of supply chain decarbonisation. Conversely, secondary data encompasses industry averages from databases like GaBi and EcoInvent or findings from literature
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