Reducing Scope 3 Emissions: Sold Products
Shoosmiths is delighted to be sponsoring United Nation Global Compact Network (UNGC) UK’s series of webinars on ‘Reducing Scope 3 Emissions’.
The event featured guest speakers: Emma Watson, Net Zero Senior Manager, CDP & Science Based Targets initiative’s (SBTi); Mark Lancelott, Consulting Director, PA Consulting; and Emma Darroch, Responsible Business Manager, Sky.
- Category 11 of the Greenhouse Gas Protocol’s Corporate Value Chain Accounting and Reporting (Scope 3) Standard addresses Scope 3 emissions associated with the use of a company’s sold products in the reporting year.
- Emissions from sold products can be categorised two ways:
- Direct use-phase emissions (required): Scope 1 and Scope 2 end-use emissions that are generated from: products that directly consume energy (fuels or electricity); fuels and feedstocks; and GHGs and products that contain or form GHGs during use. For example, a car manufacturer would count emissions from sold cars as direct use-phase emissions.
- Indirect use-phase emissions (optional) from the use of products that indirectly consume energy (fuels or electricity). Optional emissions do not count in the 66% or 90% Scope 3 boundaries when setting science-based targets. An example of a company including indirect-use phase emissions in their science-based target is Pukka Herbs, who account for emissions coming from customers boiling kettles to brew their teas.
- As per the Category 11 Technical Guidance to calculate direct use-phase emissions, the reporting company should multiply the lifetime number of uses of each product by the number sold and an emission factor per use. Companies should then aggregate use-phase emissions of all products.
- For products that indirectly consume energy or emit GHGs, the reporting company should calculate emissions by creating or obtaining a typical use-phase profile over the lifetime of the product and multiplying by relevant emission factors (DEFRA and IEA provide emission factor data).
- Sky uses various data points to calculate their sold product emissions:
- Volume of devices (leased or sold);
- Annual power consumption of devices (power consumption profiles and hours in use); and
- Lifetime of products.
- To reduce sold product emissions, the following areas can be focused on:
- Data refinement to find out what is in use. For example, Sky analyses telemetry data to define product use, which allows them to better understand how they can make changes to their products to reduce direct use phase emissions.
- Increased product efficiency through software updates and design of new products.
- Engaging customers and encouraging them to change the way in which they use products which a company sells. An example of this is Ariel’s Wash Cold Challenge.
- Lifecycle analysis allows companies to determine where significant environmental impacts of their products occur and subsequently define their strategy for reducing emissions by looking at cradle to grave emissions. Lifecycle analysis can also lead to companies viewing a leasing model as a potential reduction method for reducing overall Scope 3 emissions.
- Partnerships and coalitions are useful when reducing sold product emissions as companies across the whole supply chain can work together to reduce emissions associated with both the direct and indirect-use phase emissions. An example of this is the 50LHome coalition which addresses water security and climate change.
- According to the Greenhouse Gas Protocol, emissions from Category 11 are increased by extending the lifetime of a product. However, overall supply chain emissions would decrease, for example, emissions from purchased goods and services would likely be reduced.
- For sold services, measurement methodology is expected to evolve. Many businesses are now looking into Scope 4 (avoided emissions), which the World Resources Institute has published some guidance on.
To register for other events in the ‘Reducing Scope 3 Emissions’ webinar series, please visit our website.
Link to article