Track Scope 3 Activities

Learning Objectives

After completing this unit, you’ll be able to:

• Explain what scope 3 emissions are.
• Identify NTO’s scope 3 emissions.
• Describe how emissions factors, energy uses, and carbon footprints for scope 3 are related in Net Zero Cloud.

Prerequisites

Before you start, make sure you complete the following.

Required

• Complete the Carbon Accounting for Assets with Net Zero Cloud module to see how Sam calculated greenhouse gas (GHG) emissions from NTO’s stationary and vehicle asset sources.

Suggested

• Complete the Net Zero Cloud Basics module to learn the benefits of using Net Zero Cloud and get familiar with key concepts and terms.

Net Zero Journey of Northern Trail Outfitters

Northern Trail Outfitters (NTO), a retail company known for their outdoor and recreational gear and apparel, is committed to achieving net zero emissions. The company uses Salesforce’s Net Zero Cloud to quantify and measure carbon emissions, and to make informed decisions about the best ways to reduce greenhouse gas (GHG) emissions. Sam Rajan, the Chief Sustainability Officer at NTO, is leading the company’s efforts to collect and analyze emissions data. 

In this module, we’ll learn about scope 3 emissions and follow along with Sam as he uses Net Zero Cloud to report and calculate the emissions. Net Zero Cloud enables Sam to do carbon accounting with simple workflows and predefined datasets.

Because businesses are so interrelated, the scope 1 and scope 2 emissions of one organization become the scope 3 emissions for another. To make jackets, NTO purchases raw materials from factories and fabric mills and works with dye houses. NTO then transports the jackets to retail stores. When consumers buy and use NTO's jackets, they spend energy to wash and dry them, and GHG emissions are produced when discarded jackets decay in a landfill. These are examples of emissions that are not directly caused by NTO, but indirectly caused by the manufacturing, distribution, and use of NTO’s products.

Upstream and Downstream

More and more organizations are studying their value chain to understand the full GHG impact of their operations. Although such emissions are not directly under the organization’s control, the organization can influence its suppliers or choose environment-friendly vendors to reduce emissions in its value chain.

The GHG Protocol has identified 15 distinct categories of scope 3 emissions, which can be divided into two groups. 

• Upstream emissions: Indirect GHG emissions related to purchased or acquired goods and services, or other activities that are considered inputs to producing a set of goods or services.
• Downstream emissions: Indirect GHG emissions related to the use and distribution of products and services.
  
  

Here’s a table with all the categories and the group they fall under. 

For more details about these categories, you can refer to the Scope 3 Calculation Guidance document.

NTO’s Scope 3 Emissions

Sam studies NTO’s value chain and identifies the following key sources and activities that create scope 3 emissions, as per the Greenhouse Gas Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard.

• Business Travel: Employees and vendors contribute to scope 3 emissions when they travel, which NTO can calculate based on travel data. Travel data includes information such as the mode of travel (flight, rental car, or train), the distance covered, and the number of days spent by employees in hotel stays.
  
  
• Transportation and Distribution: NTO’s supply chain and procurement activities depend on the transportation and distribution of goods and services from warehouses to stores, and on the transportation of materials from vendor sites to NTO operations.
  
  
• Purchased Goods and Services: NTO purchases raw materials from suppliers, and peripherals such as office equipment, office supplies, and packaging material from vendors. Scope 3 emissions include all upstream emissions from the production of products purchased or acquired by NTO.
  
  
• Capital Goods: Capital goods include buildings, vehicles, machinery, and store equipment. NTO must account for the total cradle-to-gate emissions of purchased capital goods in the year of acquisition.

NTO also produces waste-related emissions, which fall under the following scope 3 categories as per the GHG Protocol.

• Waste Generated in Operations: This includes emissions from third-party disposal and treatment of waste generated by NTO’s owned or controlled operations in the reporting year.
  
  
• End-of-Life Treatment of Sold Products: This includes emissions from the waste disposal and treatment of products sold by NTO. NTO must assess the likely waste type and waste disposal method for each product. Its goal is to design recyclable products that limit landfill disposal.

Scope 3 Records in Net Zero Cloud

Sam explores how the different records in Net Zero Cloud help with carbon accounting for scope 3 activities, such as business travel, procurement-related activities, and waste treatment.

Business Travel and Freight Hauling

Here’s how records related to business travel, such as emissions source, energy uses, emissions factors, and carbon footprints, are structured in Net Zero Cloud.

Procurement-Related Emissions

For value chain-based emissions or those related to procurement, Sam can use the Scope 3 Procurement Summary record and its associated Scope 3 Procurement Item records. And he can use the Procurement Emission Factors record to convert the spent amounts to procurement data, and then to carbon emissions (tCO₂e). All the emissions calculations from multiple procurement summaries roll up to an aggregate Scope 3 Carbon Footprint record that details the total emissions (tCO2e). To find out more about procurement analysis see Scope 3 Procurement Analysis and Supplier Engagement with Net Zero Cloud. Here’s how records related to procurement-based emissions are structured in Net Zero Cloud.

Waste Treatment

For waste-related emissions, Sam can create Generated Waste records that specify the waste type, disposal type, and waste quantity. Think of these as equivalents of energy use records. He can then associate these records with either Scope 3 Emissions Source or Stationary Asset Environmental Source records. Depending on whether the Disposal Site Type is onsite or offsite, the emissions are categorized as scope 1 or scope 3 respectively. Sam can use the Waste Disposal Emissions Factors record to convert waste quantities to carbon emissions (tCO₂e). All the emissions calculations roll up to an aggregate Waste Footprint record. The Waste Footprint record has child Waste Footprint Item records that aggregate data by waste type and disposal method. Here’s a table of waste-related records.

Sam now has a fair idea of how scope 3 data is accounted for in Net Zero Cloud. In the next unit, we’ll see how Sam calculates emissions from business travel.

Resources

• Developer Guide: Net Zero Cloud Data Model
• External Site: Scope 3 Calculation Guidance by GHG Protocol
• Trailhead: Scope 3 Procurement Analysis and Supplier Engagement with Net Zero Cloud