Accounting for Scope 3 greenhouse emissions has been a key climate change topic for a while now, and it’s not an issue that’s going away.
For many companies, Scope 3 emissions will make up over 95% of their footprint, so failing to address these emissions is a missed opportunity.
For companies in the retail and manufacturing sectors, a key challenge is understanding how to address emissions that come from customer use of their products. In GHG Protocol terminology, these emissions fall under the “use of sold products” Scope 3 reporting category.
There are a few challenges when it comes to addressing these emissions. Firstly, how can we account for these emissions when we can’t track how consumers use our products? And secondly, how can we reduce emissions when we have little control or influence over our customers?
In this three-part blog series we are going to address:
- What are ‘use of sold products’ emissions?
- How can we calculate customer use emissions?
- How can we reduce customer emissions?
Part 1: What do we mean by “use of sold products”?
Let’s first understand what we mean by “use of sold products”. The GHG Protocol defines these as “emissions from the use of goods and services sold by the reporting company in the reporting year”.
For an ice cream company, this might be the emissions from keeping the ice cream frozen at a customer’s home, and for a car manufacturer, this would relate to emissions from burning petrol in the car’s engine.
For Pukka Herbs, who create organic herbal teas and supplements, most of their emissions come from customers boiling kettles to brew their teas. We can see in the infographic below that kettle boiling makes up almost half of Pukka’s “crop-to-cup” footprint.
For some companies, this category won’t be relevant at all. There are no emissions associated with some products – for example, there is no energy associated with sitting on furniture – so companies selling those types of products need not worry.
What is the difference between direct and indirect use-phase emissions?
The GHG Protocol splits emissions from the use of sold products into two categories:
- Direct use-phase emissions
- Indirect use-phase emissions.
Direct use-phase emissions must be included in your carbon footprint, but indirect use-phase emissions are optional.
Table 1 Table 5.8 from the Scope 3 Standard.
Think about it this way. If you burn energy to use a product then we must account for these emissions. If we use another appliance to enable us to use this product, then these emissions are optional.
Deciding whether to account for “optional” emissions can be tricky. This was a question we addressed when working with Pukka on their science-based targets. Should we include kettle boiling emissions? The tea bag itself doesn’t consume energy, but we must boil a kettle to brew the tea.
The Pukka team debated this internally and decided that excluding these emissions wouldn’t be the right thing to do, as we can’t pretend that an essential element of a cup of tea is the hot water we use to brew it.
Now we understand what ‘use of sold products’ emissions include, look out for our next blog on ‘how can we calculate ‘use of sold products’ emissions’!
Download | Net Zero: The Guide for Business
Download | The Guide to Science-Based Targets
Take control of your supply chain emissions | Explore the Carbon Intelligence platform
If you would like to know more about how we’re helping our clients understand and reduce their Scope 3 emissions, contact us today at [email protected]