Scope 3-Purchased Goods and Services

Description

This category accounts for all emissions that occurred upstream (sometimes known as “cradle-to-gate”) during the production of products that were obtained or purchased by the reporting entity during the reporting year.

 Products can be divided into two categories : 

1. Goods(i.e., tangible things)
2. Services (i.e., Intangible things). 

This includes emissions from all of the purchased goods and services that are not otherwise included in any of the other categories of upstream scope 3 emissions . In order to improve the consistency and transparency of the scope 3 reporting, specific categories of upstream emissions are separately reported.

Companies could find it helpful to make a distinction between the purchases of production-related items (such as materials, components, and parts) and purchases of non-production-related products (such as office furniture, office supplies, and IT assistance). Production-related products include things like materials, components, and parts. Because of this distinction, procurement practices may be aligned with it, and as a result, it may be a good approach to organise and collect data in a more effective manner.

A rundown of the several approaches for estimating emissions caused by the purchasing of goods and services

When calculating scope 3 emissions from purchased products and services, businesses may apply the procedures that are outlined in the following paragraphs. The first two approaches, known as supplier-specific and hybrid, require the reporting business to collect data directly from the suppliers, whereas the second pair of approaches, known as average-data and spend-based, make use of secondary data, also known as data collected from the industry as a whole. These techniques are presented in the order of increasing specificity of the resulting computation to the individual provider of the product or service being evaluated. 

However, businesses do not necessarily need to employ the most particular strategy as their first preference all of the time.

• Supplier-specific method – collects cradle-to-gate greenhouse gas inventory data at the product level from the providers of goods or services.
• Hybrid method – uses a combination of data related to the supplier’s activities (where they are available) and secondary data in order to fill in the gaps. This approach entails using:

             * collecting allocated scope 1 and scope 2 emission data directly from suppliers;

             * calculating upstream emissions of goods and services from suppliers’ activity data on the amount of materials, fuel, electricity, used, distance transported, and waste                              generated from the production of goods and services and applying appropriate emission factors; and

             *using secondary data to calculate upstream emissions wherever supplier-specific data is not available.

. Average-data method – calculates emissions for goods and services by gathering data on the mass (e.g., kilogrammes or pounds) or other relevant units of goods or services purchased, and then multiplying that data by the necessary secondary emission factors (e.g., industry average) (e.g., average emissions per unit of commodity or service).

. Spend-based method – estimates emissions for goods and services by collecting data on the economic value of goods and services purchased and multiplying it by relevant secondary emission factors (e.g., industry average) estimates emissions for goods and services by collecting data on the economic value of goods and services purchased and multiplying it by relevant secondary emission factors (e.g., average emissions per monetary value of products).

How can Global PCCS support ?

Global PCCS helps organisations in determining their emission goals and assists in the collection of scope 1, scope 2, and scope 3 data along the supply chain, as well as in the calculation of those goals. We will guide you on which calculation method is suitable for your business.

For more information on the service please book a free consultation by filling the form or writing to us at  pooja.h@globalpccs.com