CO2 emissions aren’t just what comes out of a tailpipe or when you burn fossil fuels. In the industry, we have emissions broken down into three different dimensions: these are Scope 1, Scope 2, and Scope 3.
Scope 1 is what most people think of when they think of a company’s emissions because these are essentially direct emissions that produced by a company when manufacturing their products. For example, their own vehicles’ emissions (trucks or cars) or so-called fugitive emissions, like gas emitted by pressurised machinery. Scope 1 emissions, because of their nature, can feasibly be measured without too much difficulty.
Scope 2 can be considered indirect because they are emissions that result from the generation of electricity, heat or steam needed for Scope 1 activities. When you buy electricity for instance, the utilities measure how much you use so they know how much to charge you. This also means that you can measure how much you used and what percentage of the energy was produced by wind, solar, nuclear, coal, etc. This is more difficult to set up, but once you have the calculations it can be relatively straightforward.
Scope 3 is where it gets difficult
Scope 3 emissions and management is where the whole thing gets tricky. Scope 3, like Scope 2, can also be thought of as indirect, but Scope 3 are all other indirect emissions that aren’t Scope 2! This includes all emissions generated all the way along the supply chain, that can be emissions associated with getting components and bringing them into the manufacturing process, aka “upstream emissions” and any emissions generated by moving products where they need to be once they leave the factory, aka “downstream emissions.” This is a very difficult set of emissions to measure, more so for companies with complex supply chains, but it is incredibly important because it can be more than 85% of the total CO2 emissions for any given product. Nike’s 2020 impact report states that 98.2% of their emissions were Scope 3.
To reduce emissions, manufacturing companies must take responsibility for the CO2 produced all along their supply chain. It’s crucial to measure and evaluate upstream activities for savings potential, as upstream activities contribute a large part to any product’s carbon footprint.
You have to look beyond your company
In order to really reduce your CO2 emissions as a company, it is not enough to only look at your own factory. We were just talking apparel, but let’s take chocolate as an example: The creation of chocolate bars in a factory and transporting them to astore is only a small fragment of the CO2 produced throughout the whole process. Getting the peanuts and cacao into the factory is no mean feat; and these long trips taken from cacao- and peanut-growing parts of the world count toward the total CO2 imprint of every single bar.
But Scope 3 is more than just the transport of the manufactured goods. There are sub-suppliers and sub-sub-suppliers that also need to be taken into consideration. The chocolate bar has ingredients from sub-suppliers, who in turn might have their own suppliers, and forth it goes along the supply chain.
We are not going to be able to reduce the worldwide emissions if Scope 3 emissions are not properly measured and disclosed, as a report by Smart Freight Centre shows. Tracks has found and developed methods to streamline data sharing between companies in the supply chain and we’ve made it easier for companies to disclose their Scope 3 emissions.
Tracks has been empowering transport providers in the road freight industry (‘carriers’) and transport buyers (‘shippers’) to monitor and report on emissions since April 2020. We have now expanded and Tracks can now monitor emissions and create GLEC Framework-accredited reports for all modes of transport. By offering automated data sharing companies get a precise picture of the CO2 emissions from the freight and logistics activities all along their supply chain.