In this article, we will explore the concept of Scope 3 emissions, its relevance in the digital sector, and the shared responsibility among stakeholders.
Recently, an article shared on the ClimateAction.Tech (CAT) Slack community by Chris Adams from the Green Web Foundation shed light on an important aspect of emissions reporting and its potential implications for UK firms. The article highlighted that British companies are not adequately prepared for the European Union’s Scope 3 emissions reporting mandate. The new regulations may result in charges of up to £40 per tonne of misreported CO2 emissions, posing financial and reputational risks for these companies. This discussion brings to the forefront the intriguing question of Scope 3 emissions, particularly within the digital sector, where the delineation of responsibility becomes blurry.
Understanding Scope 1, 2, and 3 emissions in the digital sector
Scope 1 and 2 emissions are relatively straightforward. Scope 1 refers to direct emissions generated by a company, such as emissions produced by facilities and vehicles that the company owns. Scope 2 refers to indirect emissions, for example those from electricity, heating, or cooling purchased by the company from other organisations.
However, when it comes to Scope 3 emissions in the digital sector, things become more complex. Scope 3 emissions are classified as supply chain emissions. These are indirect emissions from a company’s upstream and downstream activities (full list and detailed description in the Greenhouse Gas Protocol).
Scope 3 emissions include 15 sub-categories for companies to measure, such as purchased goods and services (including their use and disposal), business travel, employee commuting, etc. Scope 3 emissions are often considered to be the most difficult to measure and companies are not currently required to include all of Scope 3 in their reporting. However, Scope 3 emissions represent our best chance of understanding and reducing emissions associated with digital products and services.
Where should digital companies include end user emissions in their reporting?
In the digital sector, where products are often intangible and widely distributed (e.g. through data centres, telecoms networks, travel, purchased office equipment and software, end user devices and more!), attributing emissions becomes challenging. Many companies struggle to define the boundaries of their responsibility and accurately account for emissions associated with the digital products they sell to their users. However, digital companies could report these emissions under the 11th subcategory for downstream Scope 3, i.e. “use of sold products”.
Google and Mozilla provide an interesting perspective on the implications of different reporting methodologies. Mozilla, a smaller company with around 1,000 employees, reported a carbon footprint of approximately 800k tonnes CO2e in 2019, attributing 98% of it to the use of its products by end users (Scope 3 emissions). In contrast, Google, with around 100k employees, reported a carbon footprint of 13 million tonnes in the same year, without including the use of its services by end users in their Scope 3 emissions. The significant difference in environmental impact raises concerns about transparency and accurate reporting.
Let’s explore an example of end user emissions that could fall under Scope 3: Google search. It is estimated that each Google search generates approximately 0.2 grams of CO2e. Considering the staggering number of searches, which currently stands at around 8.5 billion per day (!), the emissions add up to approximately 1,700 tonnes of CO2 emissions per day! The question remains, who is responsible for these emissions? Should this form a part of Google’s own Scope 3 emissions or is it not their responsibility?
The elusive Scope 4 emissions
There is a growing discussion (such as in these articles from PWC China and The Financial Times) around the concept of Scope 4 emissions, also referred to as avoided emissions. An often-cited example is the avoided emissions associated with a plant-based diet due to much lower emissions from agriculture and land use. The idea is that we could compare 1kg of plant-protein versus 1kg of animal protein and include the equivalent avoided emissions in the Scope 4 reporting for plant protein products. Although this may sound simple enough, the calculations then become a lot more granular. We’d have to consider which meat we’re comparing the plant-based diet to and what are the specific conditions of those animals and their meat production. As it is impossible to know for sure what exactly the plant protein replaced, this would be very difficult to reliably calculate.
It would get even more complicated if trying to calculate the avoided emissions from an online marketing campaign encouraging people to switch to a plant based diet, as there is then not any specific product to measure, even though the campaign may be effective in reducing emissions.
However, Scope 4 emissions could give companies a competitive advantage if they are able to show that their goods or services are more environmentally friendly so long as they are presented clearly as general estimates and not exact calculations.
That said, if Scope 4 represents avoided emissions for goods and services that are more environmentally friendly, it would be logical for it to also include increased emissions from less environmentally friendly options. For example, should a company that runs digital marketing campaigns to sell a gas guzzling Range Rover be required to include the extra emissions of these vehicles in their Scope 4?
In the realm of digital sustainability, Scope 4 could include, for example, the emission reductions achieved by clients who decided to switch to green hosting providers and create low-carbon websites. Similarly, we could also include working with purpose-led businesses, such as renewable energy companies, which are helping us to move away from fossil fuel energy sources, contributing to carbon emissions reduction and a positive environmental impact.
The need for a full picture
Although it seems important and logical to start including avoided emissions in sustainability reports, it is crucial for companies to disclose the full picture and provide a comprehensive and transparent view of all their emissions, rather than solely focusing on avoided emissions, to avoid the risk of greenwashing. According to the Science-Based Targets Initiative (SBTi), avoided emissions should not be counted towards near- or long-term emission reduction targets, including net-zero reporting. This is because avoided emissions should be reported separately and not considered as a reduction in a company’s Scopes 1, 2, or 3 emissions.
In fact, the reporting of avoided emissions would be most effective when used to inform product or policy design, rather than being solely relied upon as an indication of climate mitigation efforts. This way, companies could effectively achieve genuine emission reduction goals through accurate and meaningful reporting of their emissions.
Calculating Scope 3 emissions is also a challenge for us at Wholegrain Digital. Scope 3 emissions of the products we consume, such as software subscriptions, are really hard to calculate, but it’s also not exactly clear whether we should take responsibility for our clients’ websites’ emissions during use. While technically these emissions belong to the clients or their website visitors (or actually a mix of the two), we also see it as our responsibility to assist in reducing their environmental impact. Digital agencies that make polluting websites should take responsibility for that.
At Wholegrain Digital, we made the benchmarking process of our clients’ websites part of every project, as well as supporting them in understanding the basics of digital sustainability and adopting greener practices through their website (and beyond, if the client is interested). This is our way to address the responsibility for the shared emissions. Ideally, we would do more automated tracking and reporting of this data in the future. Even if we don’t take sole responsibility for these emissions, at least we could be transparent about what those emissions are, which could in turn facilitate more informed decision-making.
Working toward humane web
The topic of Scope 3 emissions and the responsibility of digital companies in managing their environmental impact is multifaceted and complex. As regulations evolve and consumers become more conscious of sustainability, it will be crucial for companies to proactively address emissions reporting, understand the implications and work towards reducing their carbon footprint.
At Wholegrain, we firmly believe in building a humane web (more on that soon!). This entails designing digital products that educate users about the consequences of their actions, and promoting sustainable practices. Recognising the shared responsibility among digital product designers, organisations and users could play an essential role in collectively addressing the challenges posed by emissions in the digital sector. Because we all have a part to play.