{"id":5794,"date":"2022-12-20T12:45:00","date_gmt":"2022-12-20T18:45:00","guid":{"rendered":"https:\/\/www.mhisolutionsmag.com\/?p=5794"},"modified":"2022-12-20T13:27:43","modified_gmt":"2022-12-20T19:27:43","slug":"the-scope-3-challenge","status":"publish","type":"post","link":"https:\/\/www.mhisolutionsmag.com\/index.php\/2022\/12\/20\/the-scope-3-challenge\/","title":{"rendered":"The Scope 3 Challenge"},"content":{"rendered":"
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Feature<\/h4>\n

The climate impact from your company\u2019s direct operations is likely a fraction of the greenhouse gas emissions produced throughout your corporate value chain, including those generated by suppliers of the goods and services you buy and by customers who use the products you sell. That\u2019s why measuring and mitigating so-called Scope 3 emissions is rapidly emerging as an urgent business priority on the path to a net-zero global economy. Here\u2019s what you need to know about Scope 3 and how to make what seems like a daunting task more manageable.<\/p>\n

BY DAVID H. COBURN<\/span><\/div>\n
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W<\/span>hen Mitsubishi Electric Corporation, parent company of MHI member Mitsubishi Electric Automation, issued its environmental report for FY 2022, the numbers showed that nearly all of the greenhouse gas (GHG) emissions it produced\u201499.3%\u2014came from outside its own operations.<\/p>\n

Almost all of Mitsubishi Electric\u2019s emissions could be traced to two sources\u2014goods and services it purchased from suppliers, and emissions generated by customer use of the products it sold. Product use alone accounted for 92.2% of total emissions.<\/p>\n

For most companies, in fact, the climate impact of what takes place within the four walls of the enterprise is dwarfed by those generated throughout the corporate value chain\u2014Scope 3 emissions as defined by the GHG Protocol, the standard for measuring and reporting emissions now used by companies worldwide.<\/p>\n

Supply chain emissions are on average 11.4 times higher than operational emissions, which include direct emissions from operations, classified as Scope 1, and indirect emissions\u2014Scope 2\u2014associated with purchased electricity, steam, heating and cooling, according to the 2021 Supply Chain Report from emissions disclosure platform CDP.<\/p>\n

That\u2019s more than double previous estimates, and emerging awareness of the outsize impact of value chain emissions on a company\u2019s carbon footprint is why measuring and mitigating Scope 3 emissions is rapidly becoming a critical priority in the race to meet net-zero emissions targets by 2050 or sooner.<\/p>\n

“To understand the environmental impact of a company\u2019s economic activities, it is not enough to look at its direct emissions and risks,” CDP said in its report. “The entire value chain must be engaged to evaluate and improve its performance.”<\/p>\n

It\u2019s not happening yet. A global survey by Boston Consulting Group found 66% of respondents were not reporting any of their Scope 3 emissions, and only 9% claimed to measure their total emissions comprehensively.<\/p>\n

Turning up the heat<\/strong><\/h4>\n

If you haven\u2019t heard of Scope 3, you\u2019re not alone. Jen Bennett, technical director for sustainability in the office of the CTO at Google, says only a handful of experts in most companies understand the meaning and significance of the term.<\/p>\n

“If you were to ask the average person in an organization about Scope 3, I guarantee you even in the best of organizations, you will struggle to have everyone understand with any level of detail what that means,” Bennett told listeners on a recent webcast organized by GreenBiz and sponsored by the Environmental Defense Fund (EDF).<\/p>\n

Expect that to change as customers, regulators, investors and other stakeholders turn up the heat on businesses to accurately measure and report Scope 3 emissions\u2014and then take decisive action to squeeze them out. The challenge will take an all-hands effort from CEO and board on down. Consider:<\/p>\n