Wow, the nonprofit Environmental Investment Organization (EIO) lists 38 large companies that publicly report at least four of the Scope 3 categories. Sustainability leaders should continue to learn from these early pioneers as they evaluate the benefits and cost of Scope 3 reporting for their companies.
Thousands of firms around the world already use
the well-accepted methodology for calculating Scope 1 and Scope 2
emissions, which include a company's direct emissions and its indirect
emissions from energy that it buys. Supplier scorecards from such
companies as Walmart and IBM, as well as third-party reporting groups
such as the Carbon Disclosure Project, rely on calculations for Scope 1
and Scope 2 emissions.
Scope 1 and Scope 2 emissions, however,
often represent only a small percentage, perhaps 10 to 15 percent, of a
company's total greenhouse gas emissions. It is misleading to
communicate to stakeholders that a company's environmental efforts focus
only on Scope 1 and Scope 2. Computer maker Dell was slammed in a 2008
Wall Street Journal article that detailed Dell's attempt to base its carbon neutrality marketing claim
on just Scope 1 and Scope 2 emissions. In fact, Scope 3 emissions at
Dell were by far the dominant driver of its total emissions.
called the "Corporate Value Chain (Scope 3) Accounting and Reporting
Standard," the methodology for Scope 3 emissions was finalized last year
after years of work. This standard is ambitious because Scope 3
activities are so diverse and involve a company's supply chain and
customers' use of products. The Scope 3 standard is divided into 15
categories that include both upstream and downstream aspects of their
Reactions to the new Scope 3 standard have been mixed.
While sustainability practitioners all cheer the availability of a
common methodology, the data collection challenge is massive and often
Many large companies are just now, after years
of work, automating their data collection for their vast global
facilities for Scope 1 and Scope 2 reporting and simply can't justify
the cost of data collection for Scope 3 emissions calculations.
the newness of the standard and data collection cost, the EIO Global
800 Carbon Ranking List is impressive because it lists 38 large companies that report at least four of the 15 Scope 3 categories. The complete list tracks emissions for 800 large companies.
is definitely moving in the right direction by basing recognition on
level of scope 3 disclosure", wrote Cynthia Cummis, Manager, GHG
Protocol Supply Chain Initiative, World Resources Institute and one of
the developers of the Scope 3 standard.
Global telecom equipment supplier Alcatel-Lucent
reports 8 categories and would like to report more. "I was surprised
that only one company EIO analyzed reported all 15 Scope 3 emissions
categories. This shows that calculating Scope 3 emissions is going to be
challenging for many companies. My approach at Alcatel-Lucent is to
continue pushing on our systems and functions to gather more and more
data. Once we are able to calculate a new category (we reported 8
categories last year), we'll go ahead and publish it," Rich Goode,
Director of Sustainability, Alcatel-Lucent wrote in an email.
leaders who are committed to reducing overall greenhouse gas emissions
need to understand their Scope 3 emissions and can learn from these
early pioneers who are publicly reporting such emissions.