Climate Action in Upstream and Downstream Activities

Actions to Reduce Scope 3 Emissions 🌎 Scope 3 emissions typically account for the largest share of a company's carbon footprint, covering indirect emissions across the entire value chain. Addressing them effectively requires a multifaceted approach that engages suppliers, customers, and other stakeholders. This framework outlines clear actions across key Scope 3 categories, ranging from procurement to investments. Each action is categorized into three progressive levels, encouraging companies to start with quick wins and advance toward deeper integration and systemic change. In purchasing and capital goods, strategies include substituting high-GHG materials and equipment, applying GHG criteria in investment decisions, and engaging suppliers to standardize emissions reporting. These measures aim to embed sustainability criteria across the sourcing process. For energy-related activities and transportation, reducing energy consumption, switching to lower-emission fuels, and electrifying fleets play a critical role. While some listed actions—such as on-site renewable generation—typically fall under Scope 1 or 2, they remain integral to broader decarbonization strategies. Operational waste and product lifecycle emissions require both upstream and downstream interventions. Companies can minimize waste at source, enhance recycling processes, and design for recyclability, ensuring materials remain in circulation and emissions are mitigated across product life cycles. Business travel, employee commuting, and leased assets offer opportunities to reduce emissions through virtual collaboration tools, promotion of public transport, retrofitting for energy efficiency, and improving facility operations—highlighting the value of internal policies and infrastructure upgrades. Downstream logistics and product use demand focused improvements in logistics efficiency and product energy performance. Encouraging efficient product use and adopting low-GHG energy sources can reduce the footprint associated with sold goods and services. Franchise and investment-related emissions emphasize the importance of supporting energy-efficient operations and prioritizing low-carbon investment portfolios. Channeling funding into clean tech and applying rigorous climate criteria to investment decisions are essential for long-term impact. The success of Scope 3 reduction strategies depends not only on technical interventions but also on clear governance and collaboration frameworks. Accurate data collection, traceability, and continuous engagement across the value chain ensure sustained progress. Comprehensive Scope 3 management is vital for achieving credible net-zero targets. This framework provides a roadmap to operationalize reductions, integrating climate action into the heart of corporate strategy and ensuring alignment with global decarbonization goals. #sustainability #sustainable #business #esg #emissions

Strategies for Reducing Scope 3 Emissions: A Comprehensive Framework Scope 3 emissions often represent the largest share of a company's carbon footprint, encompassing indirect emissions across the entire value chain. To address these emissions, a multifaceted strategy is essential, involving collaboration with suppliers, customers, and stakeholders. This framework outlines specific actions across key Scope 3 categories, organized into three progressive levels, encouraging organizations to start with quick wins and advance toward systemic transformation. In purchasing and capital goods, strategies include substituting high-GHG materials and applying GHG criteria in investment decisions. For energy-related activities and transportation, reducing energy consumption and electrifying fleets are paramount. Addressing operational waste and product lifecycle emissions necessitates upstream and downstream interventions, such as minimizing waste, enhancing recycling, and designing for recyclability. Additionally, reducing emissions from business travel and employee commuting can be achieved through virtual tools and promoting public transport. Improvements in downstream logistics and product use focus on energy efficiency and adopting low-GHG sources to mitigate the carbon footprint of sold goods. Emissions from franchises and investments emphasize supporting energy-efficient operations and prioritizing low-carbon portfolios. The success of these strategies hinges on establishing clear governance and collaboration frameworks. Accurate data collection and ongoing engagement across the value chain are crucial for sustained progress. Effective Scope 3 management is vital for achieving credible net-zero targets, providing a roadmap to integrate climate action into corporate strategy and align with global decarbonization objectives. Source: Antonio V. Abdo #sustainability #sustainable #business #esg #emissions

"Understanding Scope 3 Emissions" Scope 3 emissions are indirect emissions occurring throughout a company’s value chain: both upstream (before products/services reach the company) and downstream (after products/services leave the company). They often make up the largest share of a company’s carbon footprint and are also the hardest to measure and reduce. The GHG Protocol has defined 15 categories of Scope 3 emissions, grouped into upstream and downstream activities. Upstream emissions: 1. Purchased Goods & Services - Emissions from the production of raw materials, components, and services a company buys. 2. Capital Goods - Emissions from manufacturing or construction of long-term assets like buildings, vehicles, and equipment. 3. Fuel- and Energy-Related Activities - Emissions from the production and transportation of fuels and electricity that a company purchases (not counted in Scope 1 or 2). 4. Upstream Transportation & Distribution - Emissions from moving goods and services along the supply chain before they reach a company. 5. Waste Generated in Operations - Emissions from waste disposal and treatment (landfill, incineration, recycling, etc.). 6. Business Travel - Emissions from flights, hotels, rental cars, and other transport used for employee travel. 7. Employee Commuting -  Emissions from employees traveling to and from work, including personal cars and public transport. 8. Upstream Leased Assets - Emissions from assets a company rents (but does not own), such as office space or equipment, if not counted in Scope 1 or 2. Downstream emissions: 9. Downstream Transportation & Distribution - Emissions from moving products from a company to customers, retailers, and distributors. 10. Processing of Sold Product - Emissions from further processing of sold products before they are used. 11. Use of Sold Products - Emissions generated during the use of a company’s products. 12. End-of-Life Treatment of Sold Products - Emissions from disposal, recycling, or incineration of sold products after consumer use. 13. Downstream Leased Assets - Emissions from assets a company leases out to other parties, not included in Scope 1 or 2. 14. Franchises - Emissions from franchise operations that are not owned but operate under the company’s brand. 15. Investments - Emissions from investments, including equity, debt, and project finance. Managing Scope 3 emissions may be complex, but it’s also an opportunity to drive real impact. The journey to Net Zero starts with understanding where emissions come from. By tackling Scope 3 emissions, companies can drive meaningful change and set the foundation towards sustainable practices. ESG Briefings by Lodha & Co LLP #scope3 #sustainability #esg #ghgemissions #carbonfootprint #netzero #ghgprotocol