Scope 3 emissions, which encompass all greenhouse gases generated by indirect activities upstream and downstream of an organization, are a critical decarbonization concern. This emissions category can often account for as much as 70% of corporate emissions and includes everything from manufacturing supplies to business travel. But because scope 3 emissions aren’t generated directly by an organization’s activity, they can be difficult to track and address.
Of course, the first step in addressing your scope 3 emissions is understanding how they’re generated and calculating your scope 3 footprint requires a deep dive on upstream and downstream activities. However, once your organization understands its scope 3 footprint, it can move on to the next step of developing a strategy to decarbonize.
Scope 3 Decarbonization Requires Deep Analysis & Strategic Thinking
Scope 3 strategy can be completed together with scope 1 and/or 2 strategies, but your organization may prefer to tackle scope 3 separately if that footprint is significantly larger or more complex than your other scopes (often the case). Either way, a good strategy will help you understand the solutions available to reduce scope 3 emissions and identify near-term, actionable steps.
Coho typically begins strategy work by surveying all the options appropriate for a given organization. We narrow down the list of potential solutions through feasibility assessments which identify the most impactful and economically attractive solutions. This often focuses our work on your most significant sources of emissions, like purchased electricity or transportation.
In many cases we also discover that the most substantial opportunities require working closely with value chain partners. Large organizations depend on their value chains to support their operations, and those same partners are key to addressing scope 3 emissions at scale. Knowledge sharing, aggregated procurements, and other collaborations can help your organization and partners move towards a greener future.
Once you’ve identified the solutions best aligned with your organization’s goals (on your own or with the help of an advisor), you can begin implementation through value chain partner engagement, competitive procurement, and more.
This Shortlist of First Steps Can Get You Moving
The best actionable, near-term scope 3 decarbonization solutions will depend on your organization’s footprint and priorities. The following tactics have been good places to start for Coho’s clients:
Supply Chain Renewable Energy Procurement
Renewable energy procurement is often one of the most impactful levers available to upstream and downstream partners to reduce their greenhouse gas emissions. But smaller partners and suppliers might struggle to access renewable energy on economically feasible terms.
Your organization can help value chain partners access renewable energy through aggregated procurements, which leverage economies of scale to pass better terms and pricing on to smaller buyers. Coho can support these procurements by educating partners, identifying opportunities for mutually beneficial procurement aggregations, and guiding all parties through competitive procurements to implement the best available renewable energy solutions.
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Collaborative Electric Vehicles and Charging Infrastructure Strategy
Organizations that rely heavily on upstream and downstream transportation and distribution services will likely find that supporting those partners’ fleet electrification, especially in combination with their renewable energy procurement, is an attractive and powerful scope 3 decarbonization option. This may entail an aggregated electric vehicle (EV) procurement where your organization and your partners purchase or lease a large fleet of EVs together, thereby taking advantage of economies of scale, similar to the renewable energy aggregation tactic described above. This would also reduce the cost of addressing your organization’s scope 1 emissions through fleet electrification. Alternatively, you can accelerate your transportation and distribution partners’ EV transition by educating them about electric vehicle procurement, coordinating charging infrastructure planning, and providing incentives to nudge them to make the switch.
The electric vehicle market is rapidly developing, and procurement can be complex and expensive, so organizations often do well to work with partners to procure and operate electric vehicle fleets sustainably. This might include joint outreach to manufacturers and exploration of long-term infrastructure planning to improve network efficiency and share the costs of charging infrastructure. The team at Coho can support these engagements by facilitation, impact modeling, and supporting implementation planning based on long experience.
Carbon Offset Procurement
Many organizations look to carbon offset purchases to address scope 3 emissions in the short-term in areas where there are no alternative solutions, like employee business travel. Although offsets cannot be used to comply with all decarbonization target verification programs, they can provide a vector for supporting real, additional greenhouse gas emissions reductions. As with other solutions, there are opportunities to scale impact by collaborating with value chain partners. A joint offset procurement can provide financing for innovating decarbonization projects. Coho can support offset procurements with your organization’s priorities in mind.
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Deploying the Clean Up Crew: How to Buy Carbon Offsets
The best approach to scope 3 decarbonization for your organization will depend on your footprint, partners, and the solutions available. Addressing scope 3 emissions requires building trust across your value chain and identifying mutually beneficial opportunities. Coho can help your organization diagnose its scope 3 opportunities and implement tailored solutions to reduce emissions.
