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One’s scope three is another’s scope one—compensation along the supply chain


Any company seeking to implement a robust and effectual climate change mitigation strategy must have a thorough understanding of their greenhouse gas (GHG) emissions. To date, efforts have largely focused on addressing direct emissions from sources they own (Scope 1) and indirect emissions from purchased electricity consumption (Scope 2).  

There is now increasing focus on Scope 3 emissions, which includes all other indirect emissions generated by a company’s upstream and downstream activities. Indeed, low carbon supply chains are an indispensable component to the fight against climate change with estimates indicating that Scope 3 emissions may account for some 65 to 95% of overall climate impact for many companies.

While it may be possible to rapidly reduce some Scope 3 emissions, it is likely that the majority of these emissions will prove difficult to tackle immediately and will require medium- to long-term concerted efforts. In such instances, the voluntary carbon market (VCM) provides a useful tool for companies striving to lead the way in tackling Scope 3 emissions to accelerate their decarbonization journey. 

Our whitepaper makes three recommendations that companies should adopt in selecting carbon credits to tackle Scope 3 emissions through the VCM by:

  • Setting watertight internal standards and frameworks for carbon credit portfolios, alongside transparent carbon footprint accounting and monitoring practices;
  • Screening, monitoring and reporting on carbon credit portfolios, and being responsive in navigating uncertainty and adopting best practices;
  • Setting clear expectations and sharing impact along the supply chain, including collaborating transparently with supplier and customer networks.

Read more about it in our third whitepaper.