Scope 3 emissions reporting key to achieving net-zero targets

Greenhouse gas emission. FILE PHOTO | POOL

Net-zero targets for organisations are specific targets for reducing greenhouse gases (GHG) scope 1, 2 and 3 emissions towards achieving societal climate goals.

As organisations employ best practices such as the science-based targets initiatives (SBTi) using near-term and long-term science-based targets, organisations must focus on reporting emissions because it is critical to understanding and delivering on the net-zero commitment set by organisations.

Increasingly, organisations have started measuring and reporting their Scope 1 and 2 emissions with little attention and urgency being paid to the verifiable measurement and reporting of Scope 3 emissions. This is common as the measurement of scope 3 emissions can be complex depending on the industry. Therefore, for organisations to set their net-zero targets and develop strategies to achieve them, it is essential to capture and report on scope 3 accurately.

Scope 3 emissions cover all indirect emissions in an organisation's upstream and downstream activities. It differs from Scope 1, direct emissions from owned or controlled sources, and Scope 2, indirect purchased emissions.

Scope 3 emissions comprise 15 categories defined by the GHG protocol corporate value chain comprising upstream and downstream emissions. Upstream emissions are those produced by external parties involved with the organisations' raw materials, including employee commute (including travel), waste generated and leased assets. Downstream emissions are from the use and disposal of products, including logistics, and could include franchisees and investments, depending on the industry.

As a result of the numerous touch points across the value chain, scope 3 emissions can be complex to measure and report.

In addition, organisations must solve numerous data quality issues, including data inconsistency, making it quite challenging to capture. Therefore, organisations should begin to assess their value chain, engaging with their suppliers through their procurement teams and providing support to suppliers where necessary.

Organisations should also plan for investment in systems and tools that will help with data processing and scaling for the future.

It will ensure a cost-effective approach that provides the whole business transformation. Where scope 3 emissions form a significant part of an organisation's total emissions, it is pertinent for organisations to make the required investment to measure and report on them accurately in a verifiable manner.

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