Action Guide

Develop a Scope 3 Reduction Strategy

Environmental Defense Fund

Developing a Scope 3 reduction strategy can be a complex and challenging process, but it is critical for organizations that are committed to sustainability and reducing their carbon footprint.

A Scope 3 reduction strategy is crucial for your organization if you’re looking to reduce your greenhouse gas emissions and the carbon footprint of your business. Besides the environmental benefits, your organization can also benefit from cost savings, supply chain resiliency and risk mitigation, and improved brand reputation. However, developing an effective Scope 3 reduction strategy requires careful planning, analysis, and prioritization of emissions reduction strategies. By using available tools and resources, you can develop a targeted Scope 3 reduction strategy that aligns with your sustainability goals and objectives.

Remember to engage stakeholders, monitor progress, and continuously evaluate and refine your strategies to ensure that they remain effective and aligned with your organization’s goals and values.

Understand Scope 3 Emissions Categories and Establish a Baseline

Understanding the different categories of Scope 3 emissions can help you establish an emissions baseline and identify the areas where your organization has the most Scope 3 emissions. The GHG Protocol’s Value Chain (Scope 3) standard has identified 15 categories of Scope 3 emissions and provides seven qualitative criteria for identifying and reporting relevant Scope 3 categories. You should review the descriptions of these Scope 3 categories and work across your organization to determine their relevance. You can also consider working with an expert third party to support your Scope 3 assessment. For more details on Scope 3 emissions, check out the Measure and Map Scope 3 Emissions action step.

Identify Scope 3 Reduction Strategies

Once you’ve established your Scope 3 emissions baseline, it’s time to identify potential strategies for reducing those emissions. There are many different strategies that can be effective, depending on the specific emissions sources in your value chain. Here are some common strategies to consider:

  1. Supplier engagement: Work with your suppliers to identify opportunities for reducing emissions throughout the supply chain. You can encourage them to adopt sustainable practices, reduce their energy use, or switch to renewable energy sources. Building these requirements into contract agreements can be a particularly effective way to create accountability and demonstrate your commitment. Remember to collaborate with suppliers on joint sustainability initiatives to help drive progress.
  2. Product design: Look for ways to reduce emissions through product design. Consider using sustainable materials, reducing packaging, and creating products that have a longer lifespan or are easily repairable. You can also consider developing products that require less energy to produce, use, and dispose of.
  3. Transportation: Consider the emissions associated with transportation in your value chain and look for ways to reduce them. You should work to optimize your transportation routes to reduce costs and emissions. Another option is using lower-emission transportation like electric or hybrid vehicles. This area is rapidly evolving with investments from the Inflation Reduction Act, and even hard-to-abate transportation sectors such as shipping are starting to explore new, lower emission technologies.
  4. Waste reduction: Look for ways to reduce waste throughout your value chain, such as encouraging waste reduction through your design process and with manufacturers and encouraging re-use of materials when possible.

Remember that a successful Scope 3 reduction strategy requires collaboration and communication with your suppliers, customers, and other stakeholders. It’s important to note that not all these strategies will be equally effective for all organizations or emissions sources. That’s why it is crucial to conduct a thorough analysis of your value chain and identify the emissions sources where you can have the greatest impact. From there, you can prioritize the reduction strategies that are most effective for your specific situation.

Prioritize Reduction Strategies  

When prioritizing strategies for Scope 3 emissions reduction, it’s important to take a comprehensive and data-driven approach. To prioritize reduction strategies, you first need to assess the impact of your Scope 3 emission sources. Tools such as a carbon footprint calculator or life cycle assessment can help you understand the carbon impact of different products and services and identify opportunities for reduction.

You can also use risk matrices, impact vs. feasibility analysis, or a hybrid approach to prioritize reduction strategies.

Risk Matrix: A risk matrix typically involves two dimensions: impact and likelihood. Impact refers to the potential harm or negative consequences of the emissions source, while likelihood refers to the probability that the emissions source will occur. Once the emissions sources have been identified, you can use a risk matrix to assess the potential impact and likelihood of each source. The impact and likelihood of each emissions source can be assigned a score or rating, which can be used to prioritize emissions reduction efforts. For example, emissions sources with a high impact and high likelihood score may be seen as the most critical areas for emissions reduction efforts, while emissions sources with a low impact and low likelihood score may be seen as lower priority areas.
Impact vs Feasibility Analysis: This method consists of drawing a priority matrix grid with four quadrants. The vertical axis can be called ‘impact’ and the horizontal axis ‘feasibility.’ Impact refers to the reduction in emissions achieved from a strategy, while feasibility refers to the effort required to implement a strategy. For a feasibility assessment, also consider factors such as technical feasibility, resource requirements, and potential barriers to implementation. High value and high feasibility (low effort) strategies can be prioritized while low value and low feasibility (high effort) strategies can be seen as low priority.

Here are some additional factors to consider:

  1. Co-benefits: In addition to reducing emissions, many sustainability strategies offer additional benefits related to important topics such as social justice, biodiversity, and water quality. Additionally, you may look to realize cost savings, efficiencies, and increased customer loyalty through your Scope 3 reduction strategy. Prioritizing strategies with multiple benefits can help build support for sustainability initiatives across your organization and community.
  2. Stakeholder engagement: By involving stakeholders, such as your suppliers and customers, in the process, you can make your organization’s sustainability efforts transparent and better align them with stakeholder interests. This can involve conducting surveys, holding focus groups or workshops, or establishing advisory committees to provide input and feedback.
  3. Continuous evaluation: Finally, it’s important to continuously evaluate and refine your Scope 3 reduction strategies over time. Continuous evaluation can help to identify areas for improvement and ensure that sustainability efforts remain aligned with changing business conditions and stakeholder expectations.