The two main methodologies for calculating the carbon footprint, Bilan Carbone® and the GHG Protocol, categorize greenhouse gas emissions into 3 scopes: these are scopes 1, 2 and 3.
Scope 1 covers direct emissions from the company (for example, fuel used for company vehicles), Scope 2 covers indirect emissions related to energy (for example, emissions related to electricity consumption), and Scope 3 covers all other indirect emissions.
In this Scope 3, you will find, for example, the purchase of raw materials, the purchase of services, or even home-to-work travel. This scope generally represents the vast majority of a company's emissions, sometimes up to 95% of total emissions.
This is why taking Scope 3 into account is essential in calculating the company's total carbon footprint, and decarbonizing this scope is a major challenge in the low-carbon transition of companies.
But it is also the most complex. The data on emissions from Scopes 1 and 2 are indeed often "simple" to track. This is not the case for Scope 3, for which data must be collected across the entire value chain of the company, for activities well upstream or downstream of production, including precise data from the company's suppliers.
How to obtain all the data necessary for calculating Scope 3? We talk about a specific, semi-specific, and generic approach, what does that mean? Which approach to choose depending on the data available? What are the specificities according to the sectors?
1. Specific, semi-specific, or generic approach?
Before diving into the heart of the subject, a reminder about the calculation of greenhouse gas emissions.
The first step is to map the flows of energy, raw materials, waste, and products generated by the company.
This is how we will be able to determine what we will take into account in the carbon footprint calculation and therefore what data to collect.
And this is the 2nd step: collecting the data in order to then transform them into CO2e emissions thanks to the emission factors.
These data must reflect all the direct and indirect emissions of the company. This is where Scopes 1, 2, and 3 come into play.
Each Scope is divided into sub-categories also called "emission items". The Bilan Carbone® methodology includes 23 of them.
The data collection phase is crucial because the more precise and complete the data is, the more important the accuracy of the carbon footprint will be.
This is where the major challenge lies in calculating Scope 3: being able to collect and use the best possible data. This depends on the level of information available to the company, its ability to collect the data, but also on the importance of the emission item concerned in the company's activities.
How to calculate the carbon footprint of your company? Discover our guide.
1.1 The specific approach
This is the ideal. What we call the specific approach is to retrieve data specific to the company's suppliers, therefore specific carbon data.
Your supplier or your transport service provider, for example, is thus able to provide you with a specific carbon data for the product or service you purchase. The data is thus materialized as: kgCO2e/product.
Another possibility is the transmission of a carbon data that is not specific to the product but to the supplier. If the latter has carried out its carbon footprint and relates it to its turnover, then it can provide the emissions per euro and you will know that an average purchase from this supplier will emit so much CO2e: kgCO2e/€ supplier.
Why is the specific approach ideal? Because it is the most precise. You know exactly what emissions are associated with your purchases of goods and services. The uncertainty is low and therefore this significantly strengthens the accuracy of your own carbon footprint.
"For companies in the industrial sector, we systematically prefer the specific approach, particularly for inputs to avoid artificially inflating emissions." But that is the most difficult."
Manon Dias, climate and environment consultant Sami
The most difficult because this approach requires access to specific carbon data from suppliers.
Indeed, more and more companies are calculating their greenhouse gas emissions or conducting life cycle analyses of their products, either voluntarily or to meet obligations. They are then able to provide precise data.
"This is particularly the case for freight. Carriers are required to calculate emissions related to the requested transport. And today, all our clients are able to obtain the carbon data of their service providers for freight."
Manon Dias
Large companies are also often able to provide precise data as they are subject to increasingly strict regulations on emissions. This is the case of the BEGES in France for companies with more than 500 employees. The CSRD, in force since January 1, 2024, will gradually require European companies with more than 250 employees, 25 million euros in balance sheet or 50 million euros in turnover (2 of the 3 thresholds exceeded) to measure their greenhouse gas emissions.
However, many companies do not yet have specific carbon data.
It is then necessary to make estimates to get as close as possible to the actual emissions.
1.2 The semi-specific approach
If the approach with specific data from suppliers is not possible, you have to "step back" and opt for a semi-specific approach.
The challenge here, even if carbon data is not available, is to gather as much information as possible from your suppliers to estimate the associated emissions.
To do this, you need to go up your value chain and try to obtain information from your successive suppliers, starting with those closest to you, the tier 1 suppliers.
The question of traceability is essential since the more precise data you obtain, the closer our estimates will be to reality.
It is a matter of knowing as precisely as possible:
- the supplier's scope 1 and 2 emissions, including its energy consumption
- the quantity of materials purchased to produce the goods
- transport data to bring the product to your supplier
- the country of origin of the products you purchase: so many tons of steel purchased from a supplier in Turkey, India or Germany
And by starting this same operation by going up the value chain.
We then have emission factor databases that are very precise and will allow us, thanks to the information collected, to associate emissions. The carbon footprint of a ton of steel purchased in India is not the same as a ton of steel in Germany.
Take the example of a textile company that markets a t-shirt.
Rather than settling for an average emission factor for the t-shirt, it is a matter of breaking down the different steps: what is the composition of the garment? Where do the raw materials come from? In which country was the spinning carried out? In which country(ies) were the manufacturing steps (weaving/knitting, finishing...) carried out ? With which suppliers? What is their energy consumption? Which mode of transport was used between the different steps and until delivery?
"We then use references with average emission factors that correspond to this data. Failing specific data from suppliers, this is the best we can do."
Manon Dias, climate and environment consultant Sami
We will then be able to associate much more precise emission factors and gain in quality on the estimation of emissions on inputs.
However, one of the limitations of this approach is that it relies on the quality of the data collected. Not all are necessarily usable or some introduce a lot of uncertainty in the calculation of emissions.
"I have a case of a client who, on part of these inputs, has physical data that is in m3 and on which we cannot associate emission factors. So from this data, depending on the density of the materials, we have tried to make conversions in kg. But this introduces a level of complexity and above all uncertainty in the calculation which are very important. And so the question arises of switching to a 100% monetary approach. The uncertainty related to the data is an important factor to take into account."
Manon Dias
Another important limitation concerns the calculation of downstream Scope 3 emissions, at least for certain emission items.
This is particularly the case for the use of products sold or the end of life of products sold. It is still difficult to obtain precise and clear activity data on these items.
"On the use of products, I take the example of the cosmetics sector. To estimate the emissions related to the use of a product, you have to be able to determine, among other things, how many times the product will be applied, whether it needs to be rinsed, etc. For a textile, how many times will it be worn, will it be ironed, etc. We also sometimes have clients who go through resellers to sell their products. If the resellers are located in Europe, we can estimate that the products will be used mainly in Europe. But this remains a rough estimate."
This is often the case for the end of life of products where it is still very difficult to have a clear vision of what becomes of them. And in these cases, average data is used.
1.3 The generic approach
In this case, unlike the two previous approaches, nothing is specified. It is an average impact data that is taken into account.
Let's take the example of a company that markets t-shirts: instead of breaking down the garment and going to look for the most precise data possible at each step of the value chain, in the generic approach it is an average data of emissions for a t-shirt ready to be marketed that will be used.
For the end-of-life item, average data is often used, due to a lack of more precise exploitable data.
And because, for lack of anything better, average impact data is used, this generic approach is by far the most uncertain.
Generic data can be of two types:
- physical data: kgCO2e/kg of finished product
- monetary data: kgCO2e/€ of type of expenditure
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2. Monetary or physical approach?
There are therefore two categories of data that can be used to calculate the greenhouse gas emissions associated with:
- financial data, such as invoices or amounts in foreign currencies, are converted into CO2e emissions. This is known as the monetary approach.
- physical data such as distances traveled (km) or quantities consumed (kWh, kg, tonnes, etc.) are converted into CO2e emissions. This is known as the physical approach.
The monetary approach allows for the rapid and easy calculation of emissions related to service expenses, such as the purchase of intellectual services, marketing expenses, banking services, and fees. These expenses can be easily integrated, notably by using the Accounting Journal File (FEC) to collect and automatically add these expenses.
However, the monetary approach is not suitable for all emissions. For example, for emissions related to the life cycle of a product (raw materials, manufacturing, packaging, transport, use, etc.), the company's energy consumption, home-to-work travel and business travel, it is preferable to use the physical approach.
For example, in the case of home-to-work travel, the use of a monetary ratio based on fuel expenses would result in significant variations in the associated emissions due to the fluctuation of fuel prices, even if the actual emissions remained unchanged.
Thus, while these two approaches are complementary, the physical approach is often essential to obtain precise results and reflect the reality of the company's activities.
3. A sector-based approach
For certain sectors of activity, methodological specificities must be taken into account for the calculation of the different scope 3 emission items.
It is impossible to list them all here. Two examples:
- Cosmetics
In the cosmetics sector, there is no environmental display reference. It is therefore impossible to refer to secondary data, i.e. average impact data.
For the manufacturing step, as for upstream and downstream logistics, it is therefore necessary to specify the activity data specific to the suppliers.
- Textile
For this sector, the composition of the products must be entirely specified: the precise data of the raw materials used and their quantities are expected as they vary enormously according to the products.
Moreover, the Impacts database allows to model the emissions associated with several tens of different materials (natural, artificial or even recycled). This allows to obtain precise estimates of the associated emissions.
Le Plan Carbone Général details the other specific approaches according to the sectors of activity, step by step. We invite you to refer to this document.
Moreover, more general considerations exist in terms of sectoral approach.
Thus, for companies in the service sector, service expenses represent often a significant part of total emissions. For these expenses, the monetary approach is today often preferred even if more and more physical data exist in order to measure more precisely the emissions.
“On the other hand, still in the service sector, the professional travel and home-to-work posts are also often important. And there we never go through monetary, it would make no sense. We start with specific or semi-specific data. The movements of visitors are also to be considered. It is more difficult to have precise data but we generally start from hypotheses that we build with the client.”
Manon Dias, climate and environment consultant Sami
In the manufacturing sectors, for inputs, freight or the end of life of products, it is almost always physical data that are used, except in exceptional cases of missing, partial data or on which the emission factors do not make sense.
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4. How to improve the collection of scope 3 data?
First, it should be remembered that for companies with several dozen or several hundred suppliers, it is often not possible to contact them all.
It is therefore necessary to start by identifying the most strategic suppliers, those to whom the company buys the most inputs, those who, a priori, represent the most important emissions. And it is on these suppliers that the work of collecting the most precise data should be concentrated first. Before “going down” gradually to the others.
“It should be kept in mind that for some companies, it sometimes takes 2, 3 or 4 carbon balances to achieve a collection with robust and precise data on the entire value chain. It is necessary to concentrate on the most important items at the beginning to reduce uncertainty to a maximum and then refine gradually. This is a job that takes time.”
Manon Dias
At Sami, to facilitate this collection work while seeking more precise data, we have developed questionnaires dedicated to suppliers.
The company is then able to send them directly to all its suppliers in order to recover either, in the best case, specific carbon data, or LCA results, or semi-specific data (energy consumption for example) which will allow us to estimate as best as possible the emissions related to the inputs.
“I often recommend 2 actions to our clients. First, that the person in charge of the carbon balance in the company has a good knowledge of the different services and processes of the company. This facilitates exchanges and speeds up collection. Then, I advise companies to set up a more adapted data tracking, in particular by getting out of the logic where only the cost of purchases is recorded in order to know for example the weight of the inputs. And there, it is often also the degree of commitment of the company that plays a lot.”
Manon Dias
Our other contents on the subject:
- Understand everything about the carbon footprint
- What is the definition of emission scopes 1, 2 and 3
- GHG Protocol: content and differences with the carbon footprint
- Emissions related to electricity consumption in a carbon footprint
- The carbon footprint, an economic performance tool
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