What is Scope 3 reporting?

As we enter a new era of corporate sustainability practices, we at Ground Control have placed an emphasis on empowering our field teams in their sustainability journey. With the recent announcement of new Corporate Sustainability Reporting Directive (CSRD) requirements for companies to report on the environmental, human rights and social impacts of their activities, let’s delve into what Scope 3 reporting entails.

What is Scope 3 reporting?

Scope 3 reporting is considered to be all indirect emissions that occur in a company’s value chain. These emissions are not directly controlled by the company but, are related to the activities they carry out. Scope 3 emissions can be divided into two broad categories:

• Upstream activities: Emissions from purchased goods and services, business travel, waste disposal, transportation and distribution (upstream logistics), and more.
• Downstream activities: Emissions from the use of sold products, end-of-life treatment of sold products, downstream transportation and distribution.

Why does Scope 3 reporting matter for Irish SMEs and microbusinesses?

Scope 3 reporting is critical for a comprehensive understanding of a company’s carbon footprint, as it captures all indirect emissions related to a company's value chain, which often constitute the majority of its total greenhouse gas (GHG) emissions.

Unlike Scope 1 (direct emissions) and Scope 2 (indirect emissions from purchased energy), Scope 3 encompasses a wide range of activities, including emissions from suppliers, the use of sold products, waste disposal, and business travel. These emissions typically occur outside the company's direct control, making them more complex to measure and manage.

The importance of Scope 3 reporting lies in its ability to provide a complete picture of a company's environmental impact. By including these emissions, companies can identify significant sources of GHG emissions that would otherwise remain hidden. This enables them to take targeted actions to reduce emissions across their entire value chain, driving more effective sustainability strategies.

What can Ground Control provide to clients and field teams?

Scope 3 reporting is becoming increasingly more in demand by stakeholders, including investors, customers, and regulators, who are pushing for greater transparency and accountability in corporate sustainability practices. Through our bespoke carbon reporting dashboards and cutting-edge, AI-powered ‘GC GO’ app, accurate Scope 3 reporting empowers our field teams, mitigates risks associated with climate change, and meets the growing expectations of responsible business practices.

Moreover, as governments and regulatory bodies tighten environmental regulations, both our clients and our field teams, through Scope 3 reporting, will be better positioned to comply with emerging requirements and avoid potential penalties. In the long term, reducing Scope 3 emissions can also lead to cost savings, improve operational efficiencies, and foster innovation in product design and supply chain management.