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News 2010 Detail

Carbon Leaders disclose Scope 3 emissions – What’s the point?

In early November, the CDP released the CDP 2010 Europe 300 Report. With an overall response rate of 82 percent, 74 percent of those responding disclosed at least one source of indirect emissions that occur outside of the companies own operations (Scope 3).

On a global level, all companies in the Carbon Disclosure Leadership Index (CDLI) report some Scope 3 emissions. The majority of these organizations focused on emissions from business travel. Only a few of the top-scoring companies such as Bayer, Cisco, Iberdrola, Munich Re and Nokia disclosed supply chain emissions or emissions from the use and disposal of their products.

 

The business reasons for analyzing Scope 3 emissions vary. Francesco Tramontin, associate director of global issues management at Kraft Foods, said in a recent article on Greenbiz.com that the company was tracking Scope 3 emissions because it is a logical extension of the company's approach to climate change, and a natural step following Kraft's achievement of GHG reduction targets within its own operations. According to Tramontin the company's R&D team led its Scope 3 management efforts with the aim of collecting and interpreting data for strategic purposes and for internal decision making. The Scope 3 emissions tracking also provided Kraft Foods with an impetus to take a more careful look at their internal management systems.

A case study by the World Resource Institute (WRI) illustrates how a subsidiary of Deutsche Post, DHL, which operates its own fleet but makes almost all deliveries by third-party contractors, discovered that emission from third-party contractors account for 94 percent of its total GHG emissions. To reduce these emissions, DHL collected information about its contractors’ environmental performance, including activity data such as fuel type, fuel usage and engine class, loading capacity and loading factors. Each contractor’s performance received a score, and since then, DHL works only with those contractors receiving scores above a certain number. In this way they ensure that all contractors are operating efficiently and have an incentive to improve fuel-efficiency and other metrics.

 

According to the CDP 2010 Global 500 Report the Scope 3 emissions disclosed in 7 out of 10 sectors are higher than Scope 1 and Scope 2 emissions[1]. Naturally, those indirect emissions will play an important role in businesses’ climate strategy going forward. For companies who are just starting to evaluate Scope 3 emissions, Hannes Partl, Principal Consultant at PE INTERNATIONAL, recommends: “Start with a quick screening to identify the most relevant Scope 3 categories and then go deeper only where it really matters. Most importantly, learn as you go and keep your business goals in mind”.

 

For more information please contact Hannes Partl


[1] In the CDP 2010 Global 500 Report, only 50% of companies provide information on Scope 3 emissions and many of them only include some of the 15 categories from the newly proposed GHG reporting standard