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Scope 3 Emissions: Indirect Emissions Yet Significant Impact

Elite AsiaESGScope 3 Emissions: Indirect Emissions Yet Significant Impact
19 December 2023 Posted by eliteasia ESG No Comments

Scope 3 emissions represent a significant issue for businesses of all types today. Making up as much as 65% to 95% of the average organisation’s carbon impact (PWC), this category of emissions presents an additional problem in that it occurs due to the activities of the company that lie outside its own direct control. Finding effective strategies that enable businesses to mitigate those Scope 3 emissions couldn’t be more important, but Elite Asia has now developed ESG solutions that can support organisations and help them move forward by implementing strategies that will reduce their negative impact on the environment.

Scope 3 Emissions

There are three categories of carbon emissions that all businesses today must be aware of, regardless of their sector or industry.

Scope 1 emissions refer to those that are produced directly from resources that are controlled and owned by the company itself. These include, as an example, emissions produced by the company’s vehicles and during its industrial processes.

Scope 2 carbon emissions are produced indirectly from energy that is purchased by the business from its utility provider and used to power its operations.

Scope 3 emissions represent, by far, the largest part of a company’s total emissions since they include all carbon emissions that are produced indirectly by a business, for example, business and employee transportation, waste management, purchased goods and services, etc. There are no less than 15 different Scope 3 categories which include:

  • Business travel including employee commuting.
  • Operational waste which is sent to landfill or wastewater treatment facilities.
  • Purchased services and goods which created emissions during their own production processes.
  • Distribution and transportation as well as 3rd party warehousing.
  • Energy and fuel-related activities including emissions that relate to producing the energy and fuels bought and used by the company.
  • Capital goods used by a company to make their product or sell, deliver or store their merchandise.
  • Investments including client services, managed investments, and project finance.
  • Franchises.
  • Leased assets.
  • Product usage by the customer
  • End of life treatment of the product manufactured and sold by the organisation.

Strategies in Mitigating Scope 3 Emissions

Companies should be taking steps to mitigate their Scope 3 emissions, not least because regulation SGX RegCo is planning to set climate reporting as mandatory in the near future. Fortunately, there are numerous strategies that organisations can implement in order to reduce the negative impact of their indirect emissions including putting greater effort into collaborating throughout their supply chain to reduce their carbon footprint and help minimise waste during the entire process.

Mitigating Scope 3 Emissions

  1. Measure and evaluate scope 3 emissions in your business
  2. Optimise business and employee transportation and logistic methods
  3. Opt for goods and services with fewer resources, less emission, and renewable energy to reduce waste
  4. Collaborate with your suppliers’ supply chain 
  5. Comply with regulations and consistently engage with stakeholders
Mitigating Scope 3 Emissions
Mitigating Scope 3 Emissions

What Are The Benefits Of Reducing Scope 3 Emissions?

Of course, the most important benefit of reducing any organisation’s Scope 3 emissions has to be an improved environment with a reduced impact on climate change for everyone.  However, there are some specific advantages that businesses themselves can reap by implementing effective strategies to cut their indirect emissions.

By embracing ESG practices, companies can boost the confidence of their prospective investors, attracting a wider investor base of those who value ethical behaviour and sustainability. They can also identify possible risks and determine ways to mitigate them, thus preventing damage to their reputation in the long term. This will increase customer confidence and ensure they remain loyal to the brand while saving themselves money overall.

With ESG practices in place, companies can really stand out from the crowd in today’s competitive marketplace by appealing to consumers with a social conscience. As a result, brands can build a more robust, resilient, and futureproofed organisation that will be able to move forward positively in line with regulatory compliance, despite the challenges it may face.

Minimising Scope 3 Emissions With Elite Asia ESG Solution

Elite Asia ESG Solution is the answer for businesses that are looking for a better way to develop effective strategies to minimise their Scope 3 emissions. We are dedicated to helping businesses be not only profitable but also environmentally and socially responsible and will assist you at every step of the way as you navigate through today’s complex business environment while making the most positive impact.

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