In the corporate sustainability landscape, SCOPE 3 emissions have become a key issue.
But what exactly are they and why is it crucial for companies to calculate them? In this article, we will explore in detail SCOPE 3 emissions and their impact on corporate carbon footprint management, with a particular reference to the CSRD regulation.


WHAT ARE SCOPE 3 EMISSIONS?

SCOPE 3 emissions are part of the Greenhouse Gas Protocol ( GHG) which divides greenhouse gas emissions into three categories: SCOPE 1, SCOPE 2 and SCOPE 3.

- SCOPE 1: Direct emissions from company-owned or company-controlled activities (e.g. fuel combustion in company boilers).

- SCOPE 2: Indirect emissions from the consumption of purchased energy (e.g. electricity).

- SCOPE 3: Indirect emissions occurring in the company's value chain, both upstream and downstream (e.g. production of purchased goods, transport, use of products sold).

SCOPE 3 emissions include all other emissions not covered by SCOPE 1 and SCOPE 2, representing the largest and most complex portion of a company's emissions. These include emissions from activities such as production of purchased goods and services, business travel, transport and distribution, use of products sold, and waste management.


WHY SCOPE 3 EMISSIONS MUST BE CALCULATED IN THE COMPANY

1) Completeness of the Carbon Footprint: calculating SCOPE 3 emissions is essential to obtain a complete and accurate view of a company's environmental impact. Often, these emissions represent a significant portion, if not the majority, of a company's total emissions.

2) Transparency and reputation: Companies that transparently communicate their GHG emissions, including SCOPE 3 emissions, can improve their reputation with customers, investors and other stakeholders. Transparency in ESG (Environmental, Social, Governance) is increasingly demanded by the market and investors.

3) Regulatory Compliance: with the introduction of the European Union's Corporate Sustainability Reporting Directive (CSRD), companies are obliged to report their greenhouse gas emissions, including ESG 3. The CSRD, published in the Official Journal of the EU on 16 December 2022, requires listed companies, and gradually also SMEs and micro-enterprises, to draw up a sustainability report. Scope 3 emissions reporting is a key requirement to comply with this legislation.


CSRD REGULATION AND SCOPE 3 EMISSIONS

The CSRD (Corporate Sustainability Reporting Directive) represents a significant step forward in the regulation of corporate sustainability in Europe. This directive extends the provisions of the previous Non-Financial Reporting Directive (NFRD) by introducing more stringent and detailed requirements for the reporting of companies' sustainability performance.

As of 1 January 2024, all listed companies with a turnover of more than EUR 40 million or at least 250 employees are obliged to draw up a Sustainability Report that includes SCOPE 3 emissions. As of 1 January 2026, this obligation will also extend to all listed SMEs and micro-enterprises that provide services or products to the obliged companies. The CSRD requires greater transparency and accuracy in the reporting of greenhouse gas emissions, prompting companies to integrate sustainability into their decision-making and operational processes.


BENEFITS OF SCOPE 3 EMISSIONS CALCULATION

- Identification of Critical Areas: Knowing Scope 3 emissions helps companies identify areas in the value chain that have the greatest environmental impact and develop targeted reduction strategies.

- Competitive advantage: Companies that adopt sustainable practices and demonstrate a real commitment to emissions management can gain a competitive advantage by attracting sustainability-conscious customers and investors.

- Risk Mitigation: Managing Scope 3 emissions helps mitigate risks related to regulatory compliance, climate change and stakeholder expectations.

In conclusion, the calculation of SCOPE 3 emissions has become not only an essential practice for responsible and sustainable business management, but also a regulatory requirement. Companies that embrace this challenge can benefit from increased transparency, enhance their reputation and contribute significantly to the fight against climate change.

Implementing a SCOPE 3 emissions management strategy requires a significant commitment, but the rewards in terms of sustainability, regulatory compliance and competitive advantage are unquestionable.