Scope 3
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Notable News
Business Scope 3 Action and Goals
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UNILEVER — Announced new emissions reduction targets, including a 100% absolute reduction in Scope 1 and 2 emissions by 2030 (baseline 2015); a 42% absolute reduction in Scope 3 energy and industrial emissions (baseline 2021); and a 30.3% absolute reduction in Scope 3 forest, land, and agriculture emissions (baseline 2021). (March 2024)
DHL GLOBAL FORWARDING / SCHNEIDER ELECTRIC — Partnered to design and launch an industry-first multi-modal shipping model using a combination of sea and air transport (supported by sustainable aviation fuels) that is expected to reduce Scope 3 carbon emissions by up to 40% compared to normal air fulfillment. In a 2023 pilot, two “shipping bridges” were created (one between Singapore and North America, and one between India and North America) and reduced emissions by up to 20%. Schneider Electric plans to design and execute eight of these bridges globally. (Feb 2024)
HOME DEPOT — Announced new climate goals, including a target to reduce Scope 1 and 2 emissions by 42% by 2030 and Scope 3 emissions from the use of its products by 25% by 2030 (baseline 2020). This is in addition to its earlier announced target of 85% of sales of outdoor lawn equipment being battery electric by 2028. Home Depot also set a new goal to help customers save $600 million in energy costs and reduce water use by 100 billion gallons by 2026 (with a start year of 2023). (July 2023)
DUPONT — Increased its 2030 Scope 1 and 2 GHG emissions reduction goal to 50% from a 2019 baseline (after surpassing the initial goal of 30% in 2022). It also set a new goal to reduce Scope 3 GHG absolute emissions by 25% from purchased goods and services (Cat. 1) and end-of-life treatment of sold products (Cat. 12) from a 2020 baseline. Science Based Targets initiative (SBTi) validated both targets. (May 2023)
TOTALENERGIES — Announced new climate targets, including reducing scope 3 oil emissions by 40% by 2030, up from its prior goal of 30% (2015 baseline). It also aims to reduce the carbon intensity of the energy mix sold to its customers by 20-25% by 2030 (2015 baseline). However, TotalEnergies’ total scope 3 global emissions goal of 400 Mt of CO2 equivalent (CO2e) is only a small reduction from its 2015 emissions (410 Mt CO2e) and is actually higher than its 2022 Scope 3 emissions of 389 Mt CO2e, as the company aims to grow its LNG production. (March 2023)
DEUTSCHE POST DHL GROUP — Announced the launch of GoGreen Plus, a new DHL Express service that will allow customers to reduce CO2 emissions associated with their shipments through the use of sustainable aviation fuel (SAF). This will allow customers to reduce Scope 3 emissions, “insetting” emissions directly rather than offsetting them through offset programs. This is a first for global express carriers and will initially launch in the UK, before becoming available to all customers in coming months. (Feb 2023)
LYONDELLBASELL — Announced it will increase its 2030 GHG emissions reduction target for Scope 1 and 2 emissions from 30% to 42%, relative to a 2020 baseline. The company will also establish a 2030 Scope 3 emissions reduction target of 30% (2020 baseline). The company aims to secure at least 75% of its electricity from low carbon power by 2030, and make other efficiency enhancements. It is also phasing out the use of coal in its Wesseling, Germany site and developing recycled and renewable-based polymers. (Jan 2023)
BORGWARNER — Automotive supplier BorgWarner announced a new target to reduce its absolute Scope 3 emissions by at least 25% by 2031 from a 2021 baseline. This follows its previous announcement to reduce Scope 1 and 2 emissions by 85% by 2030. (Dec 2022)
H&M Group — Set a goal to reduce its absolute Scope 1 and 2 emissions and its Scope 3 emissions by 56% by 2030 from a 2019 baseline. H&M implemented an annual budget of around SEK 3 billion ($289 million) to achieve this goal and support projects to reduce emissions across its value chain. The budget will be used to phase out coal and increase the share of more sustainable materials, among other investments. (Nov 2022)
VIRGIN MEDIA O2 (VMO2) — Committed to achieving net zero emissions across operations, products, and supply chain by 2040, subject to the standards and certification processes of the Science Based Target initiative (SBTi) and the Carbon Trust. Interim targets include (May 2022):
- 60% reduction of Scope 1 and Scope 2 emissions by 2025, and 90% reduction by 2030.
- 15% reduction of Scope 3 emissions by 2025, and 50% reduction by 2030.
TOTALENERGIES — Added new initiatives toward its goal of net-zero status by 2050. Updates include plans to (March 2022):
- Reduce Scope 3 emissions related to sales of petroleum products by at least 30% by 2030 (2015 baseline).
- Reduce methane emissions 50% by 2025 and 80% by 2030 (2020 baseline).
- From 2022‒2025, dedicate 30% of investments to the development of decarbonized energies.
MARATHON PETROLEUM — Committed to reducing absolute emissions for the use of its sold products (Scope 3) by 15% by 2030 (2019 baseline) and reducing the methane-emissions intensity from its natural gas gathering and processing operations by 75% by 2030 (2016 baseline). (Feb 2022)
Research
Scope 3 Research
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While 92% of emissions disclosed by European companies in 2022 were Scope 3, only 37% of these are being addressed with current decarbonization measures, according to a new report by Capgemini and CDP. Companies reduced direct emissions (Scope 1 and 2) by an average of 14% between 2019 and 2022 even as revenues increased 8%. The report also found that while 47% of analyzed firms have near-term science based targets, just 8% have net-zero targets to decarbonize their entire value chain by 2050 (though another 14% have validation pending). (July 2023)
SBTi published findings of its stakeholder survey to better understand challenges companies face when baselining, setting, and delivering scope 3 targets. Main findings include (Feb 2023):
- Key challenges on baselining scope 3 emissions include data access (85% of respondents), along with limited time, resources, and comparability of baselines between peers;
- Despite 96% of validated science-based targets including a scope 3 commitment, 90% of respondents believe the process for setting a scope 3 target is challenging;
- 67% of respondents consider low confidence in their ability to deliver scope 3 decarbonization as a barrier to target setting;
- 50% self-report being “off track” for delivering their scope 3 target, and find purchased goods and services and use of sold products (which together make up more than 70% of CDP reported scope 3 emissions) the hardest to decarbonize;
- Six solutions to help address these challenges include: improved data collection and supply chain traceability, enhancing accounting frameworks, target-setting guidance, collective value chain action, continued engagement of financiers and regulators, and increased internal efforts.
Global Sector Strategies: Recommended Investor Expectations for Food and Beverage
(Ceres, PRI) — Concludes that
Scope 3 land-based emissions in the food and beverage sector must be cut by 85% to meet the IEA’s
Net Zero by 2050 scenario.
Outlines investor expectations of companies, as well as priority actions for the industry, companies, and investors, to improve engagements and accelerate decarbonization across the sector. (Aug 2021)
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The Time to Green Finance (CDP) — Finds the GHG emissions associated with financial institutions' investing, lending and underwriting activities are on average over 700 times higher than their direct emissions. Only 25% of the 332 financial institutions who disclosed to CDP in 2020 reported portfolio emissions, and only 27% of insurers reported actions to align portfolios with a well below 2 °C world. (May 2021)
The Scope 3 emissions of banks, including their supply chain and broader impact, are about 400 times higher than their Scope 1 emissions, according to CDP’s Financial Services Climate Change and Forests Pilot Questionnaire. (March 2021)
“Powering Sustainability” (Capgemini Research Institute, October 2020) assesses the state of sustainability progress in the energy and utilities sector. Select key findings included the following:
- More than six in ten organizations have driven an increase in revenues from sustainable operations.
- 37% of energy and utilities companies have slowed down the pace of investments in sustainability considerably due to COVID-19.
- Only 3% are actively scaling some initiatives across regions or have comprehensive initiatives in place globally to reduce emissions from the use of their products (Scope 3 emissions).
- Only 6% said that they are on track to meet Paris Agreement targets.
- 93% of organizations do not have validated science-based targets.
Fast Moving Consumers (CDP, 2019) assesses 16 publicly listed companies in the consumer packaged goods sector on their business readiness for the transition to a low-carbon economy. Select key findings included the following:
- The sector’s key carbon exposures exist in the value chain driving large Scope 3 emissions, which make up 90% of lifecycle emissions.
- Unilever, Danone, Nestlé, and L’Oréal received high scores.
- 56% of Food & Beverage companies have no Scope 3 emission reduction targets, with Household & Personal Care companies performing better at 29%.
- 63% of companies are investing to advance depolymerization and recycling infrastructure.
- Almost 60% of the top 10 revenue generating brands for each company have failed to deliver low carbon innovations to market in the last 5 years.
- 75% of companies have acquired smaller, environmentally conscious brands to create strategic optionality.
Value Change in The Value Chain: Best Practices In Scope 3 Greenhouse Gas Management (SBTi, Gold Standard, and Navigant) — Outlines the seven most effective emissions reduction levers companies can use to reduce emissions in the value chain. Features case studies from Danone, HPE, Tennant, IKEA, and Provenance. (December 2018)
Tools
Scope 3 Tools
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Addressing Scope 3: A Start Here Guide (Embedding Project) — Helps companies understand the basics of Scope 3 emissions and how they should begin to take credible action, including: explaining how to get started on conducting a carbon inventory, setting credible Scope 3 targets, developing a value chain emissions data management strategy, collaborating with suppliers and customers to reduce Scope 3 emissions, and disclosing progress. The guidance is anchored in the real-world experience of companies that are already navigating this journey. (Jan 2024)
Value Chain Navigator (Economist Impact and Infosys) — This open digital platform is designed to help companies understand, manage, and reduce their Scope 3 emissions. The platform allows users to explore Scope 3 data, as well as conduct self-assessments, track Scope 3 regulation trends and media coverage, and view a film series of Scope 3 emissions case studies. (Oct 2023)
SALESFORCE —
Announced it has become a “Net Zero company across
its full value chain and has achieved 100% renewable energy for its operations.”
The company says it reached Net Zero by identifying “the most impactful opportunities to lower its carbon footprint” and “[c]ompensating for any remaining emissions by purchasing renewable energy and carbon credits of high credibility, impact, and co-benefits.” To support other companies on their net-zero journeys, Salesforce also released its
Climate Action Plan and unveiled
Sustainability Cloud 2.0—a new suite of carbon-accounting tools to assist with
Scope 3 reporting and climate action planning. (Sept 2021)
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Sustainability Cloud Scope 3 Hub (Salesforce) — A new edition of the Salesforce Sustainability Cloud to help companies track supply chain carbon footprint data to engage with suppliers to align on sustainability efforts effectively. (April 2021)
Collaboration
Scope 3 Collaboration
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Together for Sustainability (TfS) — Announced a collaboration with the Partnership for Carbon Transparency (PACT) to enable better exchange of Scope 3 emissions data in the chemical sector. TfS will lead PACT’s liaison with the chemical industry, using TfS resources and its expertise on Scope 3 emissions calculations. (Sept 2023)
The Supplier Cascade — The We Mean Business Coalition, in collaboration with the Science Based Targets initiative (SBTi) and other partners, has launched the Supplier Cascade to accelerate the pace at which businesses reduce their Scope 3 emissions. The Supplier Cascade is designed to help businesses encourage their own direct suppliers, known as Tier 1 suppliers, to make credible, science-based, net-zero commitments; publicly report their progress against those targets; and “cascade” the approach to their own Tier 1 suppliers. Early adopters of the Supplier Cascade program can receive support and have key metrics collected to track the impact of the approach. (Sept 2023)
Technical Specifications for PCF Data Exchange (Version 2.0.0) (Partnership for Carbon Transparency (PACT)) — PACT has released updated technical specifications for the standardized exchange of emissions data, enabling organizations to exchange Product Carbon Footprint (PCF) information. Technology solutions, ranging from procurement and supplier management systems to carbon management software, can now exchange product-related carbon emissions data using the same standardized technical language. Enabling such data sharing represents a significant step towards carbon transparency and supply chain decarbonization at scale. The specifications include a data model to exchange PCF information between systems; the data quality of PCF information; and information related to the assurance and verification of the PCF. (Feb 2023)
Pathfinder Framework: Guidance for the Accounting and Exchange of Product Life Cycle Emissions Version 2.0
(World Business Council for Sustainable Development) —
This second version of the Partnership for Carbon Transparency’s Pathfinder Framework updates the 2021 edition.
The framework addresses a key carbon accounting challenge: the exchange of consistent supplier-specific product carbon footprint (PCF) data across the value chain. It seeks to help businesses develop a better understanding of their value chain emissions by encouraging and guiding the exchange of PCF data across value chains.
The updated version incorporates further clarity and guidance in six areas: hierarchy for the application of product category rules; quality safeguards for secondary data sources; more specific accounting guidance; data quality indicators; an assurance and verification roadmap; and incorporation of PCFs into Scope 3 inventories.
(Jan 2023)
Partnership for Carbon Transparency (PACT) — WBCSD-hosted PACT announced that seven global businesses have successfully completed standardized exchanges of product-level emissions data, enabling companies to access primary data from their value chains, better meeting evolving and mandatory climate reporting requirements. These exchanges came out of two pilots, the first with CEF members BASF, Chevron, and Unilever, along with Aptar and Solvay, where the companies successfully exchanged emission data across the value chain to enable product carbon footprint calculation of a number of materials used in Unilever’s laundry products. The second pilot, between Shell and CEF member Procter & Gamble, examined chemical products supplied by Shell used by P&G to manufacture products and successfully exchanged emissions data. (Nov 2022)
Partnership for Carbon Transparency (PACT) — WBCSD announced it had achieved a major milestone in developing the Pathfinder Network (launched at COP26), a decentralized network infrastructure for sharing product-level carbon emissions data across value chains and industries: the first successful data exchange across different technology systems by CircularTree, IBM, SAP, and CEF member Siemens. PACT next plans to add new tech components, including from CEF members Amazon and Microsoft. It expects the Pathfinder Network to be available for use by the end of the year. (April 2022)
The Clean Energy Buyers Institute (CEBI, formerly the REBA Institute) launched the Decarbonizing Industrial Supply Chain Energy (DISC-e) initiative, which organizes large industrial consumers with Scope 3 GHG commitments to create demand signals in key supply chains, beginning with a focus on solar, building materials such as steel, and aluminum. Collectively, companies participating in DISC-e can leverage their procurement to make a meaningful impact through low-carbon industrial commodities. (April 2022)
WBCSD, RMI,
and the
Catena-X Automotive Network
will jointly develop in 2022 a consistent method for the auto industry to measure product-level Scope 3 carbon emissions and exchange verified, primary data across supply chains.
CEF members
BASF, Microsoft,
and Siemens
belong to the Catena-X Automotive Network.
(Nov 2021)
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Carbon Transparency Partnership (WBCSD) —
Launched to create Scope 3 emissions transparency by engaging stakeholders across a range of industries and sector-focused initiatives to combine extensive expertise and create synergies. This partnership is an expansion of the
Value Chain Carbon Transparency Pathfinder initiative. (June 2021)
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Value Chain Carbon Transparency Pathfinder — New WBCSD-led initiative to define and accelerate the wide-scale exchange of verified primary carbon emissions data between businesses to increase scope 3 emissions transparency. Over a dozen companies are involved, including BASF, Chevron, Dow, Microsoft, and Unilever. Additional partners welcome. (March 2021)