California dream or future reality?

If we are to get anywhere near our net zero target then there is one category of CO2 emissions that will prove the hardest to tackle.
Scope three – a group of emissions that businesses are indirectly responsible for through the actions of suppliers, distributors and use of its products by consumers – tend to account for the largest proportion of an organisation’s carbon footprint. In the case of many organisations around 90 per cent of greenhouse emissions fall into this category. Just as a reminder, Scope one accounts for the direct greenhouse gas emissions produced by an organisation, such as through industrial operations. Scope 2, meanwhile, covers indirect emissions, often associated with electricity or heat that has been purchased.
But while companies are getting better at reporting and reducing their scope one and two emissions – which include those created through its energy use and heating – reducing scope three remains more of a challenge. Scope three represents a near endless list that can include everything from the climate impact of a company’s investments, to the emissions from its employees’ commutes. It also highlights the interconnected nature of the climate crisis. The scope three emissions of one company will be another company’s scope one and two. So it unlocks opportunities to take a more systemic approach to combating climate change.
Some major companies such Schneider Electric have been making strides to combat Scope 3 emissions but it is encouraging to see legislation help companies and organisations on this process. A new bill in California (see page 12) requires all 5,000 companies operating in the state with an overall turnover of more than $1bn a year, to measure categories of emissions, including a category linked Scope 3. This will establish just how efficiently their fossil fuel products are being consumed. There remains a number of ways of addressing this voluntarily – for instance, the US Securities and Exchange Commission is still set to issue its own guidance. The difference is that, in California, providing full transparency on Scope 3 emissions will now become mandatory for larger companies. This has been welcomed by several big companies including Apple, Ikea and Microsoft.
Scope 3 challenges might not seem a top priority for many organisations but it is one they are going to have to prepare for. And if countries adopt the same style legislation as California then it could be sooner rather than later.

• Mark Thrower is managing editor of Energy in Buildings & Industry and www.eibi.co.uk