Scope 3 emissions emerge as business critical challenge in decarbonisation

Addressing Scope 3 emissions poses significant measurement and reduction challenges; yet technology, regulation and strategic leadership offer powerful levers for decarbonisation and value creation

- BY ABDULAZIZ KHATTAK

A GROWING number of organisations now realise that Scope 3 emissions, the indirect greenhouse gases emitted across their entire value chain, account for the lion's share of their carbon footprint, and no longer consider these merely a compliance checkbox but a strategic imperative for decarbonisation and resilience.

For many firms, Scope 3 is the 'elephant in the room' of climate disclosure.

Unlike Scope 1, which covers fuel burned onsite, or Scope 2, which covers purchased electricity, Scope 3 is diffuse, sprawling and dependent on third-party actors.

It is not uncommon for companies in fast-moving consumer goods, retail, or technology to find that over 90 per cent of their total footprint lies outside their direct control.

That scale forces organisations to rethink the very foundations of supply chains, product lifecycles and customer behaviour.

Consider a smartphone manufacturer. The aluminium and rare-earth minerals mined in one continent, the chip fabrication in another, and the logistics bridging them often carry a higher emissions load than the final assembly plant.

When that phone is later used by consumers for years, drawing on electricity grids of varying carbon intensity, the Scope 3 tally multiplies.

Even product end-of-life, such as recycling or landfill disposal, counts towards the manufacturer's Scope 3 responsibility.

This complexity makes Scope 3 a powerful lens to examine corporate responsibility in the 2020s and 2030s.

Climate leadership is no longer about installing rooftop solar panels or electrifying a vehicle fleet. It is about embedding low-carbon thinking into contracts, supplier relationships, research and development, and even customer incentives.

Forward-looking firms are experimenting with buyback schemes to control end-of-life impacts, co-funding renewable projects with suppliers, and piloting new packaging materials with dramatically reduced embodied carbon.