What are the challenges associated with Scope 3 and how can businesses overcome them?
In our last blog, we examined Scope 3 emissions in closer detail – discussing what they are, why they are significant and the importance of businesses having a strategy in place when attempting to tackle them.
Today, we’re exploring some of the main challenges associated with these emissions and will be explaining how specialist software like AXIOM can make the process of creating sustainable supply chains easier.
Understanding Scope emissions and being able to have access to accurate data on all three scopes is an essential part of many carbon reporting requirements such as SECR (Streamlined Energy and Carbon Reporting).
Scope 1 covers emissions from owned or controlled sources, and Scope 2 are those from the generation of purchased steam, electricity, heating and cooling. As a result, they are relatively simple to measure and manage.
However, as Scope 3 are the emissions which fall outside of the control of the reporting organisation, they can be far trickier to manage and understand.
Scope 3 challenges are varied, but include:
Many companies have highly complicated or large supply chain networks that involve different suppliers and products that are sold through a diverse range of channels.
This makes it difficult to obtain accurate, up-to-date data regarding a company’s Scope 3 emissions, as managing a high number of supply chain partners can be exceedingly challenging! Some partners will not have that data in place, while others may not be motivated to provide the right data on time. Others may simply not want to provide you with the data at all.
It’s also possible that some partners may not report on data in the same way, or to the same standards, that the reporting company does. This can lead to discrepancies in the data, or damage the overall quality of the data exchanged.
Other Scope 3 challenges include a reliance on supply chain partners, which can result in data gaps in the Scope 3 inventory.
A lack of primary activity data, or a lack of knowledge about sourcing secondary data may mean that partners are unable to provide all the necessary information for Scope 3. This can be further exacerbated by partners who are hesitant to make this information readily available due to fears of privacy breaches and legal consequences.
It’s also important to remember that data obtained by partners is not guaranteed to be high-quality or even contain the right or relevant information.
Reasons for this can be attributed to an overreliance on secondary data and inaccurate approximations through to a general lack of experience – meaning that supply chain partners may provide poor quality data.
This has a huge impact on companies reporting on Scope 3 emissions, as it prevents them from being able to get a clear picture of their sustainability. This makes it harder to recognise what practices or suppliers need to be improved, or in some cases, leads to false or inaccurate information being submitted during the reporting process.
This may mean that companies over or understate their sustainability credentials, which can have severe reputational and social repercussions.
Overcoming Scope 3 challenges, making effective positive changes and achieving long-term sustainability goals is therefore depending on having access to accurate and relevant key emissions data.
This is where implementing specialist technology can be extremely helpful, as it can automatically collect and collate data from across the supply chain – streamlining the reporting process and removing the errors associated with manual data collection.
There are a number of options out there – including our own AXIOM platform.
We’re here to support you, whatever stage of the sustainability journey your business is at.
We recognise the link between good quality data and being actively engaged with third-party suppliers. Our software offers a centralised platform which streamlines and organises communication between you and your suppliers.
Whether you’re sending documents, gathering essential emissions data, or trying to calculate your Scope 3 (supply chain) emissions – AXIOM Engage makes managing supplier relationships easier.
Using our dedicated and specialist SECR and carbon reporting software, we provide your business with complete visibility, access and control over all the data you require for easy and quick reporting.
From collating emissions data across the year and accurate Scope 1, 2 and 3 reporting to storing yearly reports and automatically calculating your GHG emissions – we can help.
Book your Demo today at https://axiom-sustainability.com/why-choose-axiom/
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