Scope 3 reporting: let the fun begin - Part 1

Author’s notes: This post includes comments made by people whom I approached specifically for that purpose and am grateful they responded so readily. Good manners dictate that I dial down the usual acerbity, so the following text is predominantly informative, with judgement and opinions largely reserved. They are for the second part.

I’d like to extend my thanks to Dr. Tammy Nemeth who supplied much of the research materials I sifted through to get to the bottom of Scope 3 reporting. I remain unconvinced there is a bottom but that’s beside the point.

• Overwhelming Scope 3 emission reporting is only a matter of time

• It will require massive amounts of work, meaning it will cost a pretty penny

• A whole new industry is emerging around emission reporting

In the beginning, there were emissions. Emissions were bad and had to be reduced. As the push for this emission reduction gathered momentum the pushers thought it might be a good idea to narrow things out a bit, to specify them, for clarity.

That’s how emission scopes came to be. Scope 1 emissions were the most straightforward — these were the emissions that a company generates from its operations. Scope 2 were also straightforward — the emissions that the company generates from its use of electricity and anything else it might use for heating and cooling. And then there was Scope 3 — every molecule of greenhouse gases emitted by anyone working with that company and everyone using its products.

Emission reporting was a natural step along the road to decarbonisation and, really, only a matter of time. Sometimes I wonder what took transitioners so long, to be honest. But they did get to it and now every business of any significance — small businesses will have to wait their turn — is being urged to start reporting its emissions as a necessary first step towards reducing them. And they, meaning regulators and activists, are talking about all emissions. Including Scope 3.

Here’s an illustration of what Scope 3 emissions are all about. Let’s take an oil company. They’re huge polluters and everybody hates them so nobody will get offended. They’re used to that. Also, it’s easiest with oil companies.

So, this oil company generates Scope 1 emissions from the process of pumping oil out of the ground. In that, they use things like steel pipes that they don’t produce themselves — the emissions generated during the production of these pipes are Scope 3 emissions for the oil company. They are called upstream emissions.

But that’s not all. Because the oil company also refines the oil it extracts from the ground and turns it into petrol and diesel, which it then sells to you and me, and the local deliveries company. The emissions we generate by driving are also Scope 3 emissions for the oil company. They are called downstream emissions.

The transition party are adamant that we need to start reducing all these emissions in our quest to a net-zero planet status. Even more adamant, however, are businesses that offer things like data collection and processing software or consulting services. And they are truly hyped about Scope 3 emissions.