Scope 3 Emissions Reporting: Solving The Transparency Issue

What are Scope 3 emissions?‍

The GHG Protocol breaks down a company’s emissions into three ‘scopes’. Scope 1 emissions are direct emissions derived from company-owned or controlled sources. Scope 2 emissions are indirect emissions that arise from the generation of purchased energy.

Source: GHG Protocol — Corporate Value Chain Accounting Reporting Standard

What are the challenges in Scope 3 reporting?

Scope 3 emissions will typically account for the largest and most diverse share of company emissions. With emissions from fifteen different categories, Scope 3 reporting brings many challenges for companies.

  • Lack of high-quality primary emission data: A key issue for companies reporting Scope 3 is getting high-quality primary data from their suppliers. There are a number of reasons why this issue can arise. Suppliers may not have data tracking in place, for example. In these cases, companies will rely on creating secondary data based on industry averages, environmentally-extended input-output (EEIO) data, or other methodologies. This use of secondary data will result in less accurate emissions reporting. ‍
  • Complexity and inconsistency of calculation methodologies: The Scope 3 Corporate Standard outlines different methods to calculate Scope 3 emissions.‍ However, with companies using different methodologies…

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FlexiDAO

FlexiDAO

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FlexiDAO is a software provider in the energy sector aiming to accelerate the transition toward a decabornised world, leveraging on blockchain applications.