Greenhouse gas emissions are categorised into three groups or ‘scopes’ by the most widely-used international accounting tool, the Greenhouse Gas (GHG) Protocol.

While scope 1 and 2 cover direct emissions sources (e.g., fuel used in company vehicles and purchased electricity), scope 3 emissions cover all indirect emissions due to the activities of an organisation. These include emissions from both suppliers and consumers.

Why should an organisation measure its scope 3 emissions? There are a number of benefits associated with measuring scope 3 emissions. For many businesses, the majority of their greenhouse gas (GHG) emissions and cost reduction opportunities lie outside their own operations.

By measuring scope 3 emissions, organisations can:

  • Assess where the emission hotspots are in their supply chain.
  • Identify resource and energy risks in their supply chain.
  • Identify which suppliers are leaders and which are laggards in terms of their sustainability performance.
  • Identify energy efficiency and cost reduction opportunities in their supply chain.
  • Engage suppliers and assist them to implement sustainability initiatives.
  • Improve the energy efficiency of their products.
  • Positively engage with employees to reduce emissions from business travel and employee commuting.
  • Demonstrate leadership.