What are Scope 3 emissions?
The GHG Standard categorizes direct and indirect emissions into three emission scopes:
- Scope 1: All direct GHG emissions
- Scope 2: Indirect GHG emissions
- Scope 3: Other indirect emissions
Scope 3 emissions are indirect emissions from the extraction and production of purchased materials and fuels (such as clinker), transport-related activities in vehicles not owned or controlled by the cement company, electricity-related activities (e.g. transmission and distribution losses) not covered in Scope 2, outsourced activities, waste disposal, etc.
Why account for Scope 3 emissions?
Scope 3 accounting allows companies to understand the full climate change impact of their business throughout its value chain and develop more effective greenhouse gas (GHG) reduction strategies. Companies can then develop a value chain footprint that provides an accurate picture of the total impact of a company’s activities. This information will benefit the companies themselves, as well as their suppliers, customers, and other value chain partners.
By measuring Scope 3 emissions, cement companies can:
- Assess where the emission hotspots are in their value chain
- Identify resource and energy risks in their value chain
- Identify which suppliers are sustainability leaders
- Identify cost reduction and energy-efficiency opportunities across their value chain
- Engage suppliers and help them to implement sustainability initiatives
- Reduce their employees’ emissions from business travel and commuting
Relevance to the cement industry
The percentage of emissions arising from Scope 3 emissions varies depending on the type of company and industry. For some companies, such as financial service companies, the percentage of emissions coming from Scope 3 will be significantly higher than those due to Scope 1 and 2 emissions.
For the cement sector, Scope 3 emissions arise from the whole value chain, including capital goods, purchased goods and services, energy-related activities and transportation/distribution. Key factors include the source of the fuels being used, the type of procurement and the amount of transport undertaken.
Cement Sector Scope 3 GHG Accounting and Reporting Guidance
This Guidance outlines a clear and coherent approach to carrying out a scope 3 assessment and it helps cement companies to increase their understanding of its value chain emissions. It provides consistency for voluntary Scope 3 accounting and reporting in the cement industry by addressing the main CO2 and non-CO2 GHG emissions from upstream and downstream activities related to cement production.
The purpose of this Guidance is to enable comparisons of a company’s GHG emissions over time. It is not intended, at this stage, to be used for comparisons between companies based on their Scope 3 emissions although overtime a more consistent set of principles for Scope 3 emissions reporting may emerge. Differences in reported emissions may be a result of differences in inventory methodology or differences in company size or structure.