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Uncovering the impact of Scope 3 emissions

The fact that carbon emissions significantly influence our environment is quite well-known. And if you're part of a company that cares about sustainability (high five!), you may already be tracking your Scope 1 and 2 emissions. But have you heard about Scope 3 emissions? They may be the missing puzzle piece to your net-zero journey, and here's why:

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What are Scope 3 emissions?

Simply put, Scope 3 emissions are indirect emissions that occur in a company's value chain, including activities such as producing purchased goods and services, employee commuting, and waste disposal. These emissions are not under the company's direct control but are still related to its operations, making them a crucial consideration in any comprehensive sustainability strategy.

To give a few more examples, Scope 3 emissions can come from various activities like:

  • The extraction and production of raw materials for products, such as oil, minerals, and metals.
  • The manufacturing and transportation of products and services, including transportation of goods, packaging, and shipping.
  • The use of products and services, such as the emissions from cars, refrigerators, or other appliances used by customers.
  • The end-of-life treatment of products, such as the emissions from recycling, landfilling, or incineration of products and waste.

Each industry and value chain has different emissions sources, making it essential to identify and prioritise emissions sources based on their relevance and impact. In fact, they're often the most significant contributor to a company's carbon footprint, making up around 80% of its total emissions on average. 

By tracking Scope 3 emissions, businesses can gain a more comprehensive understanding of their environmental impact, which can help them identify areas for improvement, set reduction targets, and make informed decisions about suppliers and operations. While it may seem challenging to track these emissions, the benefits of reducing a company’s carbon footprint and creating a more sustainable future are well worth the effort.

Measure your environmental impact

Why should Scope 3 emissions be tracked?

There are several reasons why it is important to track Scope 3 emissions. Here are a few:

Transparency

Transparency is a critical component of any sustainability strategy, and tracking Scope 3 emissions can help companies achieve this goal. By understanding the full extent of their environmental impact, businesses can identify areas for improvement and set realistic emissions reduction targets. 

Read more: The 3 pillars of corporate sustainability

Moreover, tracking Scope 3 emissions can provide transparency to stakeholders, including customers, investors, and employees, who increasingly demand accountability from companies regarding their environmental impact. Consumers are becoming more environmentally conscious and are willing to pay a premium for products that are sustainably produced. By disclosing their Scope 3 emissions and sustainability initiatives, companies can build trust with their customers, demonstrating their commitment to reducing their environmental impact.

Similarly, investors are increasingly looking for companies that are environmentally responsible and have a long-term sustainability strategy. By disclosing their Scope 3 emissions and their plans to reduce them, businesses can attract investors who are interested in funding sustainable ventures.

Employees are also increasingly demanding transparency from their employers regarding their sustainability initiatives. By disclosing their Scope 3 emissions and their sustainability targets, companies can build a culture of sustainability, encouraging employees to adopt sustainable practices both at work and in their personal lives.

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Risk management

Tracking Scope 3 emissions helps companies identify potential risks and opportunities associated with their supply chain. For example, if a company relies heavily on a supplier with a high carbon footprint, it may face supply chain disruption in the future as environmental regulations and carbon taxes become stricter. By identifying these risks, companies can take preemptive action to mitigate them and ensure the resilience of their operations and reduce their exposure to potential supply chain disruptions due to environmental regulations.

Read more: Carbon neutral vs carbon positive: What is the difference and which is better?

Cost savings

Reducing Scope 3 emissions can also lead to cost savings for companies. By optimising transportation routes and reducing unnecessary transport, companies can decrease the associated fuel and energy consumption, ultimately saving money on transportation costs. For instance, businesses can switch to more fuel-efficient modes of transportation or reduce the number of trips taken, resulting in significant emissions reductions and cost savings.

Similarly, minimising waste generation and reducing the amount of waste sent to landfills can reduce the associated waste disposal costs. By implementing waste reduction strategies such as recycling, composting, and reusing materials, companies can not only reduce their carbon footprint but also save on landfill and disposal fees. Moreover, by reducing waste and reusing materials, companies can improve resource efficiency and reduce costs associated with purchasing new raw materials.

Competitive advantage

With consumers and investors becoming increasingly environmentally conscious, companies that can demonstrate their commitment to reducing their carbon footprint may gain a competitive advantage over those that do not. They could showcase their commitment to reducing their carbon footprint to stakeholders, including environmentally conscious customers and investors. This can lead to increased customer loyalty, positive brand perception, and even increased sales. Investors are also increasingly taking environmental performance into account when making investment decisions, so a company that can demonstrate its commitment to sustainability may have better access to capital and investment opportunities.

DGB Group supports companies in achieving their net-zero goals

Scope 3 emissions have the potential to complete the journey towards net-zero emissions. At DGB Group, we are dedicated to supporting companies to achieve their sustainability goals. Our large-scale projects generate high-quality carbon credits perfectly fit to offset emissions that cannot be abated. DGB works together with many stakeholders to ensure the impactfulness of our projects, but also that they benefit the environment and local communities. To ensure a sustainable, healthy future, global action and collaboration are needed to reduce emissions. Taking action on Scope 3 emissions is a great way to show your company's commitment to environmental responsibility and win over eco-conscious consumers and investors. Your sustainability journey starts with measuring your company’s carbon footprint. 

Start tracking your emissions with DGB today!

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