How we can support you

About Carbmee & Decarbonization

All questions

Our Product

Our product can be used by customers interested in measuring and reporting their carbon emissions. However, it goes beyond that. It was designed for reduction – helping customers to make data-driven decisions based on factual information about their value chain emissions and achieve net-zero targets in a cost-efficient way.

Most of our competitors’ platforms use spend-based calculation alone, which isn’t precise enough to include primary, operations data or provide results that can help companies identify actionable hotspots. Our approach is to use both spend-based and activity-based calculations for the most thorough and precise results possible. 

We provide spend-based calculation to set a baseline for Scope 1 and 2 as well as to identify hotspots if needed. At the same time, we guide our users towards collecting and growing their emissions data within the organization and increasing activity-based data coverage. 

We provide activity-based calculation to tackle emissions that can be the most difficult to measure throughout the value chain, i.e. Scope 3. While many competitors avoid using activity-based calculations due to their complexity, carbmee has streamlined the process, to deliver on results that are 30% more accurate and actionable insights for carbon reduction strategies. 

What makes carbmee different from its competitors?

We have developed our own categorization for how we break down all of your company’s emissions, which are:

      Company Carbon Footprint...

calculates CO2e emissions across your entire company, i.e. all suppliers, internal processes and products;

covers all phases of the company, i.e. Scope 1, 2, and 3;

fulfills regulatory and sustainability reporting requirements;

enables identification of strategic reduction opportunities.

Product Carbon Footprint...


enables carbon reduction along the product development process;

commonly required to win tenders, report on progress, and comply with regulations.

Supplier Carbon Footprint...


calculates climate impact across all suppliers;

covers all phases of the supply chain, i.e. Scope;

identifies cross-supplier/category reduction opportunities;

enables collaboration with suppliers for joint carbon reduction.

What kind of carbon footprints do you calculate?

Yes, our solution is system-agnostic and can integrate with any ERP system.

Can we integrate our ERP system data directly into carbmee’s EIS™ platform?

Yes, our solution provides precise information for compliance with major sustainability reporting standards like GRI, CDP, and GHG Protocol.

Can I use international reporting frameworks?

While Excel is the classic solution for formatting, organizing and calculating data, it is also entirely manual – not at all optimized for the complexity of corporate carbon management. 

Carbmee’s EIS™ Carbon Management Solution automates carbon management, not only making carbon management easier but also delivering on: 

calculations 80-90% faster than with Excel;

the opportunity to collaborate on data collection – streamlining data from multiple sources (e.g. suppliers, various internal teams, etc.);

a variety of features built for reduction like analytics for easy hotspot identification, an initiative planner for planning reduction path and high ROI initiatives, as well as automated reporting.

Why is carbmee better than my company’s internal excel solutions?

We use a variety of databases, including comprehensive activity-based databases such as ecoinvent, as well as industry specific ones such as carbon minds and Exiobase for clients in need of spend-based carbon calculations.

Which database do you use for emission calculations?

Yes, all of our 3rd party database partners provide transparent and auditable data on request.

We have different packages that can be set-up based on customer’s needs and value chain complexity. Talk to one of our decarbonization experts to get a quote for your company.

Our team is composed of industry experts specialized in procurement, business consulting, technology, and more. This means we have the domain knowledge to understand our customers’ challenges and needs – and the know-how to solve them.

To ensure our customers are able to have the greatest impact on their net-zero journey, we also provide:

one-on-one guidance and recommendations on how customers can start and level-up their decarbonization;

online courses that explain what net-zero is and how to use our product from end-to-end of your enterprise;

webinars and events with industry experts, focused on net-zero for both the planet and your company’s sustainable business performance.

How does carbmee support teams from end-to-end of your enterprise?

Yes, our Consultancy Partners are key in supporting our joint customers to eliminate implementation barriers, maximize low-carbon capacity, and achieve breakthroughs in sustainable business performance. 

We are a consultancy firm interested in EIS™ Carbon Management for our clients’ projects. Can we partner with carbmee?

Yes, carbmee provides both personal support from our Customer Success Managers but also through our interactive learning platform, carbmee Academy. Customer Success Managers ensure that every customer is guided through:

their decarbonization journey, i.e align use of Carbmee with business goals and strategy;

how to leverage EIS Carbon Management to achieve meaningful carbon reduction goals;

mapping challenges to match for solutions, i.e. product discovery and co-development.

Is there support available when using EIS™ Carbon Management?

Carbmee sits at the nexus of technology, digitization, and sustainability, with the vision of driving the sustainable transformation of businesses with environmental intelligence in order to achieve net-zero by 2050. Carbmee’s Environmental Intelligence System ™ (EIS) is an enterprise software solution for value chain carbon management, specializing in Scope 3 emissions analysis and reduction potential.

Carbmee’s EIS™ Carbon Management Solution is not just a reporting tool or an offsetting platform – our Solution is about integrating operational ERP data to identify where to abate emissions at their source and managing carbon reduction initiatives as effectively as possible. By linking emissions from materials, transactions, logistics, and supplier data to globally recognized standards and methodologies, our Solution calculates carbon footprints down to a supplier-specific level. 

What is carbmee’s EIS™ Carbon Management solution?

We’re trying to make the biggest impact we can and that means working with some of the world’s largest companies, which also have complex supply chains (i.e. companies with significant Scope 3 emissions). We also work directly with suppliers to analyze and verify their carbon footprint.

What kind of companies does carbmee work with?

The climate crisis is intensifying and with it so is the need for companies to comply with regulations, but also to develop more resilient supply chains, lower their climate risk, and continually make their operations more sustainable overall. Our Solution gives companies the chance to not only fulfill their emissions reductions pledges, but to truly operate carbon-aware now and far into the future.

Why should my company decarbonize its value chain?

Scope 1 emissions are direct emissions from owned or controlled sources.
Scope 2 emissions are indirect emissions from the generation of purchased energy. 
Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

The CSRD marks a watershed moment for corporate sustainability with far-reaching implications for how companies assess their own climate impact, as well as for the future of sustainability reporting in both Europe and globally. Organizations will need to devote significant time and resources to prepare for implementation of the directive within a short timeframe.

We’ve created a quick guide to help industry enterprises understand the most important points of the CSRD and how they can best prepare for it.

Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) is an amendment and extension of the current Non Financial Reporting Directive (NFRD), under which large companies, banks and insurance companies with more than 500 employees are required to disclose information on their environmental and social impacts. The European Commission adopted a proposal for a CSRD in April 2021, with the aim of improving the quality of sustainability reporting and increasing transparency on the non-financial performance of companies for external stakeholders.

As the climate crisis has progressed, the EU is increasing its efforts to drive forward its transition to a sustainable economy. The CSRD strengthens the existing rules on non-financial reporting introduced in the Accounting Directive by the 2014 non-financial reporting directive (NFRD). The new regulations under the CSRD will bring important changes regarding scope and reporting requirements.

The scope of companies affected by the regulations will significantly be extended to apply to: 

All large companies, that is companies fulfilling 2 out of the three following criteria:
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All companies listed on EU-regulated markets (except listed micro-enterprises)

This nearly quadruples the number of companies required to publish reports on the environmental and social impacts of their operations from 11,700 to about 50,000. 

What are the main differences between the CSRD and the existing NFRD? 

The CSRD will include more comprehensive sustainability reporting requirements and significantly expand the number of EU and non-EU companies subject to the EU sustainability reporting framework. Enterprises will provide detailed environmental and climate change information, but will now also be held accountable for reporting on a wider range of topics such as environmental rights, social rights, human rights, and governance factors.

The CSRD is mandatory for companies that meet in-scope criteria, which includes: 

Large companies that have:
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Non-EU companies with at least one subsidiary in the EU and a net turnover of more than EUR 150 million

Reporting requirements for the CSRD will be fully phased in before the end of the decade as follows:

reporting in 2025 on the financial year 2024 for companies already subject to the NFRD

reporting in 2026 on the financial year 2025 for large companies that are not currently subject to the NFRD

reporting in 2027 on the financial year 2026 for listed SMEs (except micro undertakings)

reporting in 2029 on the financial year 2028 for third-country undertakings with net turnover above 150 million in the EU if they have at least one subsidiary or branch in the EU exceeding certain thresholds.

To comply with the CSRD, companies will need to prepare a non-financial statement that includes information on their sustainability policies, risks, and results. This statement must be auditable by an independent third-party and be included in the company’s annual financial report.The specific content of the statement will vary depending on the size and sector of the company but could include policies and performance details, such as: 

a brief description of the company’s business model, strategy and sustainability risks and opportunities; 

implementation plans as they relate to the transition to a sustainable economy, measures taken to achieve climate neutrality by 2050 ( in line with the Paris Agreement), and exposure to coal, oil and gas-related activities;

double materiality, i.e. both the sustainability matters that affect the company and the impact of the company on the environment, market, and people; 

greenhouse gas emission reduction targets; 

policies in relation to sustainability (including incentive schemes); 

and the processes the undertaking used for due diligence in relation to sustainability issues, as well as the current and future negative effects of the business' operations and value chain.

What information will need to be disclosed?

Companies will need to compile their ESG disclosure information in accordance with the CSRD with guidance from the European Reporting Sustainability Reporting Standards (ESRS). During the drafting process, the ESRS referenced various ESG reporting frameworks and standards, including CDP, GRI, SASB, and others.

The ESRS will incorporate both universal and industry-specific standards, like many other comparable frameworks. The first set of ESRS reporting standards is expected to be adopted by June 30, 2023, and publication of ESRS sector-specific standards is anticipated by June 30, 2024.

Which reporting standard applies to the CSRD?

While the full extent of sanctions is not known, as penalties are defined at a member state’s discretion, organizations found to be in violation of the CSRD can expect serious administrative sanctions, with possible penalties including significant fines.

In the case of NFRD implementation by member states, fines in Portugal ranged from €50 to €1,500, while in Germany companies are fined up to either €10M, 5% of the annual turnover, or twice the amount of the profits gained/losses avoided because of the breach.

Other consequences of CSRD non-compliance could also include damage to brand reputation, a loss of investor and stakeholder confidence, as well as legal action taken by non-governmental organizations.

Will there be penalties or sanctions for not complying with CSRD?

While some details are in development, it is clear that implementing CSRD it will require significant resources, and most crucial for multi-national enterprises, will overlap in scope and diverge in content from region to region. Regardless of size, companies should prepare for CSRD by:

ensuring that key stakeholders across your company are familiar with CSRD sustainability disclosure requirements; 

staying up-to-date on EFRAG announcements and ESRS guidance for CSRD;

assessing how your company identifies and gathers sustainability-related information;

setting targets and KPIs with planned periods to evaluate progress and relevance;

utilizing the right tools to help you quantify and report your relevant sustainability information.

How can your company start preparing for CSRD?

Carbmee’s EIS Carbon Management solution can help you to plan for success and prepare for the CSRD. Our platform provides you with everything you need to understand your baseline, set targets for emission reduction, develop transparent benchmarks, and report your progress through:

centralized and automated data collection from your existing ERP system;

industry-specific databases of emission factors that guarantees the highest accuracy;

hotspot-assisted target setting, benchmarking and gap analysis so you have the best data to create compliant reports;

real-time and impact-oriented insights to help you deliver on targets in good time.

To learn more about EIS Carbon Management and what carbmee can do for your company, get in touch with one of our industry experts. 

How carbmee can help your enterprise to report in good time and in compliance?

What is the Corporate Sustainability Reporting Directive? What will it mean for your industry? How can your enterprise prepare for compliant reporting? Check out our quick guide to find out.

Corporate Sustainability Reporting Directive (CSRD): Quick Guide

Corporate Sustainability Reporting Directive (CSRD): A Quick Guide

For the fourth year in a row, Spend Matter analysts have highlighted five start-ups that excited them the most and proven to be potential future trend setters. While explaining why carbmee was selected for the Future 5 list, Nick Heinzmann, Spend Matters VP of Research, said:

"Carbmee immediately stood out as a Future 5 candidate due to its strong underlying technology, its ability to quickly find traction, its smart positioning in and partnership approach to the market and its compelling vision.

Compared against other carbon management specialists and adjacent players that are building their own capabilities to estimate and reduce carbon emissions, Carbmee already stands out with its deep support for primary emissions data collection and collaborative calculations approach that draws in data owners and experts to confirm data points, including internal engineers, ESG-employees, external suppliers or even customers. The firm embodies both deep procurement and lifecycle assessment (LCA) expertise, and the Carbmee team includes a set of experts who can both help implement the system and assist in knowledge transfer for how to get the best data out of the deployment."

This announcement comes as the carbmee has already gained attention in the market this year with Gartner Inc. highlighting carbmee as a Cool Vendors in Sourcing, Procurement, & Supply Chain for 2022 and Frost & Sullivan recognizing carbmee with the 2022 Europe Enabling Technology Leadership Award in the Carbon Management Industry.  

Spend Matters also noted that selected Future 5 vendors are on track to qualify for the following year’s “50 Procurement Providers to Watch” list. As carbmee continues to develop its platform and ecosystem, we look forward to earning our place on the 2023 list.

Spend Matters has announced the 2022 roster for their “Future 5” list and this year, carbmee is among the five companies that have proven themselves as potential future trend setters.

Does every board need a Chief Sustainability Officer

Julia Hartmann is Professor of  Management and Sustainability at  EBS University of Business and Law. . Her research focuses on sustainable development, corporate social responsibility, sustainable supply chain management and operations. Her research has been accepted for publication in the Journal of Operations Management, Journal of Business Ethics, Journal of World Business, International Journal of Operations and Production Management, and Journal of Cleaner Production

Spend Matters recognizes carbmee as a 2022 “Future 5” start-up

Estimates can vary depending on what’s included, but approximately 51% of global emissions come from the industrial sector. This figure is one that motivates our team of industry, software, and carbon experts everyday to understand the challenges of the world's largest enterprises with some of the most complex supply chains.

While corporate understanding of emissions is still relatively new, both accounting and sustainability professionals have been familiar with LCA and Carbon Accounting for many years. These approaches are both relevant to corporate sustainability but were initially designed for different use cases. Life cycle assessment (LCA) is used to assess the environmental impacts of product systems and decisions, often driven by customer requests or regulatory requirements. Meanwhile, Carbon Accounting measures how much carbon dioxide (and CO2 equivalents) an organization emits and often fulfills requirements for non-financial reporting. This form of accounting was mostly developed in the last two decades with the intent of providing a factual basis for carbon-conscious decision-making. However, it's true efficacy until recently is unclear, given that companies had often based their carbon accounting on speculative upstream and downstream emissions (Scope 3). This means that with inaccurate information – but good optics – carbon accounting has been strongly driven by publicly listed companies for reporting purposes and not for decision-making.

LCA was developed for highly granular assessment of environmental impacts – which makes for reliable carbon footprint models. These assessments require complex data collection processes, involving a high level of manual entry as well as low level of technical innovation. Traditionally, these models were created externally through specialized consultancies or internally by LCA experts with a background in environmental engineering. Carbon Accounting has a fairly simple data collection process that can consist of information such as energy bills, vehicle mileage, or company facility needs, for example. But as this information doesn’t provide the full scope of a company’s activities or supplied goods, it is not useful when it comes to reduction planning and decision-making (beyond participating in the voluntary carbon market to buy carbon credits which is not ‘ultima’ ratio for energy-intensive industries). This is especially the case for industrial companies that rely on processes like assembly, smelting or those with extensive supply chains. Beyond that, frameworks for carbon accounting are very broad when it comes to database and methodology choices, which has often been exploited by companies that have only felt compelled to to do the bare minimum in regards to time and resource allocation. 

If we stand a chance of decoupling economic growth from emissions we need precise data and reliable processes. While addressing Scope 1 and Scope 2 emissions has been the low-hanging fruit for many companies, Scope 3 still needs to be urgently addressed and is now re-emerging as an urgent topic. Fortunately, the U.S. Securities and Exchange Commission, European Commission, and other governing bodies understand the importance of a net-zero future and are now mandating companies to disclose the carbon footprints of their entire value chains, from end-to-end. When it comes to transforming into a net-zero enterprise, companies are finding it challenging to navigate which approaches are best for them to comply with established and new regulations – and understandably find it challenging to understand the current market stance. If that wasn’t complicated enough, there’s also the question of determining whether a Product Carbon Footprint is enough for their reporting and compliance needs, or if what they need is to have a holistic measurement of their entire Corporate Carbon Footprint, but that’s another topic for another day…

Most enterprises face similar obstacles when it comes to their net-zero transformation:

Lack of focus, with little to no clarity on emissions hotspots

Scattered data located across several different ERP and production systems

Managing massive amounts of data, especially in Scope 3 (this includes purchasing transactions, BOMs and supplier data)

Dynamic decision-making supported by forecasting and reduction tracking

Understanding the financial link between carbon optimization and ROI

Execution of SBTI Targets and Net-Zero Strategy

Knowing the ins and outs of this breakdown is crucial to understanding which methodology is right for a company’s decarbonization strategy and it’s also how carbmee supports the world's largest companies to reduce their carbon emissions with one LCA-based, end-to-end carbon management solution, that puts companies in control of their net-zero transformation. 

I’d like to dig a bit deeper into differences within LCA and Carbon Accounting:

Understanding the best carbon reduction approach for industrial enterprises

The spend-based methodology utilizes environmentally extended input-output (EEIO) databases to calculate emission factors for different materials from different regions. These factors are based on spend and have the unit kg COv2e/€. 

The activity-based methodology uses an LCA approach, where emission factors rely on LCI databases and are calculated with the method recommended in the GHG protocol to arrive at global warming potentials for different materials and services. For the activity based approach, ecoinvent models are used as they are, without further changing them. They are chosen based on their best fit to the used materials or services.

The supplier-specific approach works the same way as the activity-based one, but here generic data from the database is replaced by or enriched with primary data from the customer or supplier. This allows to not only calculate emissions more accurately, but also to recommend to-dos to achieve emission reductions. 

Spend-Based Vs. Activity-Based Calculations

A manufacturing OEM is doing a spend-based analysis of their Scope 3 Emissions, based on spend data. They have purchased 500 tonnes of Aluminium for their production process on the 2nd of September 2022, from both a Chinese and a European supplier. Each time, they paid a price of 2,300 €/tonne, which amounts to 1,150,000 €.

The resulting footprint is 3,307,895 kg CO2e for the European supplier and 4,431,767 kg CO2e for the Chinese supplier, due to different energy mixes in the regions.



The same company bought the same amount of Aluminium from their European supplier on the 4th of March 2022, and paid a price of 3,516 €/tonne1, which amounts to 1,758,000 €.

The resulting footprint is 5,056,764 kg CO2e.


The drawbacks of the spend-based approach are:

a. that these calculations can't be broken down into material, transport, production steps, energy consumption - so ultimately, it's not designed to identify reduction paths or go deep along the entire value-chain;
b. and the inaccuracy that can come from material price fluctuations & negotiation processes, so spend can change dramatically, even though consumption is steady.

A manufacturing OEM is doing an activity-based calculation of their Scope 3 Emissions, based on purchasing transactions (volume + material) and transport method. 500 t of Aluminium are purchased from Europe and China.  

The European material is transported by truck for 500 km, the material from China by ship (22,000 km) and then by truck (300 km). 

The OEM receives a footprint represented by the following graphic, with transport emissions are depicted in orange, and material in turquoise.

Advantages to spend-based calculations include that they:
1. can be broken down into material, transport, production, energy down to tier-n;
2. can differentiate suppliers in different countries, including transport;
3. can be flexibly designed to deep dive with supplier data once a hotspot is identified;
4. and are very accurate and designed to plan reduction initiatives with it.

The emission factor is derived from the ecoinvent database and includes generic assumptions about the production steps and energy sources that are used for the aluminum production, based on local grid mixes. This does not allow for recommending reduction steps to specific suppliers, because their respective production methods are not taken into account.

By getting primary data from the supplier of the material, it becomes possible to identify hotspots in the production and recommend meaningful reduction measures. For the example of aluminum, it can look like this:


It becomes clear that a significant share of the emissions from aluminum are caused by electricity consumption during fabrication – that is creating the raw material aluminum oxide – and direct emissions during physical processing. This gives the supplier three levers to reduce emissions that were previously unknown, such as: switching to renewables, changing the sourcing of the raw material, or capturing emissions where they occur.

Carbmee offers an automation layer on top of companies ERP and Manufacturing systems to streamline data and mapping them automatically with LCI emission factors to build highly complex activity-based LCA models at scale. 

This automation layer is purpose-built for companies with complex supply chains and high technical complexity with thousands of suppliers and materials as well as millions of transactions.

Example for Supplier-Specific Calculations

Carbmee offers an automation layer on top of companies' ERP and manufacturing systems to streamline data and mapping them with LCI emission factors to build highly complex activity-based LCA models at scale. 

For companies serious about not only measuring their emissions according to the science-based standards, but reducing them too, you should consider using a platform that uses activity-based calculation. Carbmee's EIS™ Carbon Management solution uses a category-defining data model that allows companies to significantly increase the granularity in hotspot identification, which ultimately enables carbon reduction at scale. 

To experience precise and powerful carbon management, book a demo to test out our solution for yourself.

Decarbonization presents complex challenges for industry companies and the market of solutions, both for software and hardware, is still quite young and sometimes not clearly defined. Read to learn more about the different approaches companies can take to measure and reduce their emissions, and what the best carbon reduction approach is for industrial enterprises.

The Best Carbon Reduction Approach for Industrial Enterprises

Decarbonization presents complex challenges for industry companies and the market of solutions, both for software and hardware, is still quite young and sometimes not clearly defined.

Today's companies are increasingly hearing and heeding the warning calls of climate change experts. Everyone strives to understand what factors like the greenhouse gas protocol and Scope 1, 2, & 3 emissions mean for their business and how to ensure compliance.

Multinational companies like BP, Coca-Cola, and Walmart account for nearly a fifth of global CO2 emissions – with the majority of those emissions to be found in their supply chain. As companies become more aware of their environmental impact, it’s clear that organizations' supply chains often account for more than 90% of their greenhouse gas (GHG) emissions. But what does that even mean?

Nearly everything a company does can be understood through the lens of carbon – that is to say, its activities, products, and purchases all have an amount of greenhouse gas emissions allocated to them. So how do companies know what is essential to measure, or how even to quantify the emissions of everything they do? This is where the Greenhouse Gas Protocol comes into play.

We have developed this guide to help organizations understand the GHG Protocol and accompanying emissions to help do their part in compliance and stewardship. 

The GHG Protocol is a comprehensive standardized framework for measuring and managing emissions from private and public sector operations, value chains, products, cities, and policies. Originally established in 1988 as a partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), the purpose of the GHG Protocol is to help businesses everywhere account for the subtle and potentially drastic changes in our future related to greenhouse gas emissions. It has become the most widely recognized and used standard for measuring all three emissions scopes.

What Is the Greenhouse Gas (GHG) Protocol?

In the GHG Protocol, the Corporate Standard categorizes the primary GHG emissions into three distinct Scopes: Scope 1 emissions, Scope 2 emissions, and Scope 3 emissions. Scope 1 emissions are direct emissions created by owned or controlled sources. Scope 2, or indirect emissions, stem from the generation of purchased energy, and Scope 3 emissions are all indirect emissions. These take place in the value chain for each reporting company and include upstream and downstream emissions. 

How Is the GHG Protocol Related to Scope Emissions? 

Not all GHG emissions are the same. There are various categories that businesses, government bodies, and organizations must consider to ensure complete awareness and ultimate reduction. Gaining a better understanding and more insights into each scope helps businesses succeed in reducing emissions. 

GHG Scopes 1, 2, & 3 are emissions categories defined by the GHG Protocol. Each scope is used by organizations, government bodies, and regulators to set goals and targets to reduce carbon emissions and other chemical greenhouse gases damaging the environment. Each scope is distinguished by the degree of control a business or organization has over the emission source rather than by emission type.

Scope 1 Emissions: Direct Emissions

Scope 1 emissions are direct greenhouse gas emissions from sources owned or controlled by an organization (i.e., direct emissions from company facilities and vehicles). They include boiler and furnace emissions, transportation emissions, and chemical production emissions from owned or controlled processes. All this means that emissions are released into the atmosphere directly from the company's daily activities.

Scope 1 emissions reporting is mandatory. 

Scope 2 Emissions: Indirect Emissions (Owned & Not-Owned)

Scope 2 emissions come from electricity, steam, heat, and cooling consumption (i.e., indirect emissions from purchased energy to turn on the lights in your office). The energy consumption counted for Scope 2 emissions are related to the end-user, indirectly owned by corporations. 

Scope 2 emissions are also mandatory to report.

Scope 3 Emissions: Indirect Emissions (Not-Owned)

Scope 3 emissions are naturally complex since they are linked not only to a company’s value chain but also to its entire product life. Scope 3 emissions are companies' most common and significant source of emissions. It refers to GHG emissions that result from the company's activities. However, the company has no direct control over the resulting emissions. 

Also known as "value chain" emissions, Scope 3 GHG emissions are part of the cost of doing business. Here are some examples of Scope 3 emissions: 

Emissions from waste disposal or incineration 

Emissions from business travel, whether via air, train, boat, or automobile

Emissions from the extraction of raw materials used in manufacturing

Emissions from the manufacturing of products used by the company

Emissions from the downstream usage of products or services

While organizations must report Scope 1 and Scope 2 emissions, Scope 3 reporting is optional. However, it is highly encouraged to account for and report these emissions since they account for 70% of the total GHG footprint. Of course, these emissions are more challenging to detect, record and report, but they are a vital component toward reaching net-zero targets in the future. 

Scope 3 emissions are referred to as upstream or downstream depending on where they initiate in the value chain. 

Let's start with a closer look at Scope 3 emissions with upstream emissions. These types of emissions come from goods and services that a business buys or otherwise acquires: 

Purchased goods and services have a cradle-to-gate carbon impact, meaning they have an emissions impact from the moment of production until the moment it arrives at a store or other sales space. The reporting company must also account for the extraction, production, and transportation of services or goods purchased, leased, or otherwise acquired. 

Capital goods, sometimes called capital assets, also have a cradle-to-gate impact. The upstream impact of capital goods comes from their extraction, production, and transportation upon purchase or acquisition by the reporting company. 

Fuel and energy-related activities that do not fall under the same activities listed in Scope 1 or Scope 2. These activities derive from the extraction, production, and transportation of energy and fuels acquired or purchased by the reporting company. Here is a breakdown of the different categories of this particular Scope 3 upstream activity: 
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Upstream transportation and distribution or emissions from transportation via air, road, rail, sea, and third-party transportation or related to storage. These upstream activities might include: 
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Waste disposal and treatment in a reporting company's operations in facilities not owned or controlled by the reporting company. Waste matters might include wastewater, landfill, or composting.

Business travel by air, bus, rail, or rental car specifically for business-related activities during a reporting year in vehicles not owned or operated by the reporting company.

Employees commute activities between their homes and worksites by car, rail, bus, air, subway, or teleworking. 

Upstream leased assets or operation of assets, such as assets from energy use, are those leased by the reporting company, known as the lessee, distinguishing them from assets included in Scope 1 and Scope 2 emissions.

Scope 3 downstream activities are more challenging to assess and report because they involve product consumption and focus on the consumer. 

Let's look at some examples of downstream activities for Scope 3 emissions. 

Downstream transportation and product distribution activities occur when the manufactured items are no longer in the reporting company's possession. While they are still responsible for producing and distributing those products, the consumer now creates more emissions from the product. The downstream activities occur via air, road, rail, sea, and third-party shipping and storage products. 

The processing and use of sold products, such as a car motor, and what the end user does with them daily. 

End-of-life treatment of sold products is when a consumer has finished using the product, whether the product wore out its usefulness or they bought something new. What is the waste-disposal emissions factor? Was the product incinerated, recycled, or is it in a waste heap?

Downstream leased assets - While some leased assets fall under Scope 1 or Scope 2, most fall under Scope 3 as downstream concerns. This area is challenging because it is difficult to account for leased items because of varying possession. However, it is still a downstream activity and more challenging to monitor and report.

Franchises - This category applies to franchisors who must account for emissions from the operation of franchises not included in Scope 1 or 2.

Investments and financial institutions may involve Scope 1 and 2 emissions classifications related to organizational boundaries related to equity-share investments. Scope 3 becomes a factor when considering the emissions of Scope 1 and 2 investees.

Downstream activities are challenging to measure, but they represent a holistic and realistic overview of a product's complete life cycle and carbon impact, from production to retirement and disposal.

Since Scope 1 and 2 emissions are mandatory to report, companies have focused on GHG emissions from their operations. But what about the emissions happening outside their walls?

If companies ignore Scope 3 emissions — those linked to the company’s operations but not owned by them — they miss out on a crucial step towards successful decarbonization.

Why? Scope 3 emissions often represent the most significant production of greenhouse gases. And they are also the hardest to measure since they are outside the company’s operations and direct control. In fact, the CDP has found that supply chain emissions (read: Scope 3) are, on average, 11.4 times higher than operational emissions. 

Despite the challenges, it is worth the effort to measure and report all three scopes to reduce your business's carbon footprint as much as possible. 

What Scope 3 Means for Your Business's C-Suite, Stakeholders, and Board

While most GHG Protocols have similar end goals in reducing chemical emissions, there is more than one way to achieve them for different sectors. Let's explore the seven different types of GHG Protocols. 

The GHG Protocol Corporate Accounting and Reporting Standard, or the Corporate Standard, was designed for companies and governmental organizations. It provides guidance and requirements for bodies such as government agencies, NGOs, and universities leading up to a corporate-level GHG emissions inventory. 

Here are some additional benefits of this GHG Protocol: 

It helps companies prepare for an upcoming GHG inventory to ensure that the results accurately reflect their emissions with standardized principles and approaches.

It reduces the cost of the GHG emissions inventory.

GHG Protocol: What Are Scope 1, 2, & 3 Emissions?

The GHG Protocol is the most widely recognized standard for measuring and managing greenhouse gas emissions from private and public sector operations.

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