Addressing scope 3 emissions for sustainable future

Reducing greenhouse gas (GHG) emissions is a major challenge for businesses on the path to sustainability. While companies focus on emissions they directly control (Scope 1) or those from purchased energy (Scope 2), most emissions come from the supply chain—known as Scope 3 emissions.

Tackling Scope 3 emissions is key to building a sustainable supply chain and meeting global climate goals. But why are these emissions so important, and how can businesses manage them? Let’s take a closer look.

Scope 3 emissions

Scope 3 emissions include all indirect emissions across a company’s value chain, excluding direct emissions (Scope 1) and purchased energy emissions (Scope 2). These emissions come from various activities, such as:

• Purchased goods and services
• Transportation and logistics
• Use of sold products
• Waste from operations
• Employee commuting
• End-of-life product disposal

For many businesses, Scope 3 emissions make up the largest share of their carbon footprint, making them a key focus for sustainability efforts.

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Why are Scope 3 emissions important?

Scope 3 emissions play an important role in a company’s overall environmental impact. Addressing them is essential for sustainability efforts, regulatory compliance, and long-term business success. Here’s why they matter:

• Majority of emissions: Scope 3 emissions often make up over 70% of a company’s total GHG emissions. Ignoring them can undermine sustainability efforts. For example, while a food company may cut emissions at its own facilities, the biggest impact comes from agriculture, processing, and transportation.

• Driving industry-wide change: Reducing Scope 3 emissions requires collaboration across the supply chain—from suppliers to customers. This fosters innovation, promotes sustainable practices, and creates a ripple effect across industries.

• Regulatory and stakeholder expectations: Governments, investors, and consumers increasingly demand transparency and action on Scope 3 emissions. Reporting frameworks like SBTi and CDP highlight their importance for credible climate commitments.

• Enhancing reputation and competitiveness: Companies that prioritize sustainability stand out. Addressing Scope 3 emissions can boost brand reputation, attract investors, and create long-term value.

• Managing financial risks and opportunities: Neglecting Scope 3 emissions can lead to supply chain disruptions, rising costs, or regulatory penalties. On the other hand, tackling them can unlock cost-saving opportunities through improved efficiency and circular economy practices.

Challenges in managing scope 3 emissions

Reducing Scope 3 emissions comes with several challenges, as they span across complex supply chains and involve multiple stakeholders. Here are some key obstacles businesses face:

• Data collection and measurement: Tracking emissions across a vast supply chain is difficult. Many suppliers lack the necessary tools or expertise to provide accurate data, leading to gaps and inconsistencies.

• Limited direct control: Unlike Scope 1 and 2 emissions, companies have little control over supplier practices or customer behaviors, making it harder to implement changes.

• Diverse sources of emissions: Scope 3 emissions come from various activities and industries, requiring tailored strategies for different parts of the value chain.

Overcoming these challenges

To effectively manage Scope 3 emissions, businesses can:

• Leverage technology: Tools like lifecycle assessment (LCA) software, blockchain technology, and environmental intelligence platforms can help track and analyze emissions, ensuring transparency and actionable insights.

• Set science-based targets: Committing to science-based emission reduction goals that include Scope 3 emissions demonstrates accountability and aligns with global climate objectives.

Conclusion

Scope 3 emissions are both a challenge and an opportunity for businesses working toward supply chain sustainability. Reducing these emissions can lower a company’s carbon footprint, improve resilience to climate risks, and support global sustainability goals. While the process may be complex, the benefits—for both the planet and businesses—make it essential.

To learn more about calculating Scope 3 emissions, visit: IBM Environmental Intelligence.

For further insights into developing environmental intelligence solutions, check out the following resources:

• IBM Environmental Intelligence: A developer's toolkit for sustainable innovation: Stay updated with the latest developments and use cases of IBM's Environmental Intelligence APIs.

• Learning Path: Environmental Intelligence: Explore a comprehensive learning path to master environmental intelligence and its practical applications.

• Sustainable agriculture insights using Environmental Intelligence platform: Discover how to use Normalized Difference Vegetation Index (NDVI) to monitor vegetation health, enhance agricultural productivity, and apply advanced geospatial analysis in farming practices.

• Top 5 challenges faced by environmental application developers: Explores the top 5 challenges faced by environmental application developers and insights into overcoming them using innovative solutions.

• Geospatial and Environmental APIs – Hands-on projects: Learn by doing with hands-on projects designed to build your skills in geospatial and environmental API integration.

These resources provide valuable guidance for developers looking to build climate-resilient solutions and leverage the power of environmental data in their applications.

If you want to solve complex environmental problems, IBM Environmental Intelligence provides the data and tools needed to build innovative, sustainable applications. Visit the website today for a free preview.