Makersite CEO Neil D’Souza recently sat down with The Scope 3 Podcast’sTom Idle and Oliver Hurrey to discuss the key supply chain challenges facing organizations today – and how Makersite can help to solve them. You can listen to the full episode below or using the link here.
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Five key takeaways on product sustainability and scope 3
The real impact comes from products
It might sound simple, but when it comes to Scope 3 we need to take things back to the source. As Neil notes, “100 % of the impact that we see in the world today comes from the products we make and use. If you really think about it, whether you’re a service company and you’re flying around, well, it’s the plane that’s creating the impact, right? If you’re on your desk, then it’s the laptop and the electricity you use to run it.”
Just reporting isn’t enough. If you truly want to fix something and resolve the problem of the impact that’s being created, then you need to do your homework and properly understand the implications of designing a product in a certain way – from the raw materials you use to where you source them from to the end of life of that product.
Sustainability isn’t about ‘being green’
It’s all very well for a company to want to flex its green credentials. But if you want to properly affect the product you make, then you need to go deeper. “Out of 250 odd projects that I’ve worked on,” Neil says, “there is not a single project that was implemented just because it was green.”
So what is it about? Business is about making trade-offs. It’s about asking yourself the right questions. “What will I get if I were to reduce its impact by 30%? What will I get in terms of, ‘will I be able to sell more in more jurisdictions?’ Would it address a different market? What would be the cost implication of it? Would I still be able to sell it given compliance problems that I may have? Would it still be safe?”
The design must be separated from the implication or the understanding of the implication.
Facilitating the demand for better products
Now more than ever, manufacturers in a variety of markets are facing an increasing pressure to make better, more sustainable products. But not only is there a greater demand from consumers and stakeholders for this approach – there’s also a greater propensity to pay higher premiums for better design.
However, these markets (from building and construction to automotive to chemicals) generally have very complex supply chains and products, and traditional tools and traditional approaches can’t solve the hurdles they need to overcome in order to meet those demands.
Makersite powers the systems used by the people (from engineers to procurement) in organizations who can make the difference – the CAD tools, the PLM tools, the ERP tools, the procurement tools.
With that help, they can ensure that the product that is being designed follows the rules of the region in which they’re trying to sell it.
2030 is too soon
Many companies have positioned ambitious Scope 3 and Net Zero targets for 2030. But, says Neil, that’s not giving anyone enough time. “In reality, if you think of this from an engineering standpoint, an average technical product takes five to seven years to go to market. 2030 is six, seven years away. You’ll be able to make one product change. That’s about it. There’s not a lot you can do with one product iteration.”
For Makersite, it’s about the bigger picture. The longer term. And it’s about stopping the same mistakes being made over and over again: “What we want to do is every iteration from now until 2050, every iteration of every product that is new, that is innovative runs through Makersite. If we do that, then we’re not making the mistakes that we’ve continuously made over time.”
The tools we have now are smart – but not smart enough
In order to properly service the market and the demand from consumers, the tools we have now need to be refined. They are good, but they could be better.
Neil D’Souza: “The first is engineering tools. Engineering tools need to become smarter in order that we make the right decisions during design. The second is procurement tools. Procurement tools themselves also need to become smarter. We need to be able to not just quantify what are the impacts of the products that we’re buying, but identify where are the low carbon products that we can buy. And the connection of these two tools is important for that to happen.”
Ultimately, if organizations want to decarbonize, then they must provide their procurement teams with the flexibility to look at the market for low carbon solutions, as well as the level of information to not buy the wrong thing. This is a connection that can only happen when you connect product development tools with procurement tools.
With that, there will then be an understanding of the material constraints and the production constraints that you need to have to make that product successfully.
On March 6th 2024, the United States Securities and Exchange Commission (SEC) set in place new rules regarding climate disclosures, requiring many companies to disclose greenhouse gas emissions and climate change-related risk, including in their annual reports. Although the ruling was watered down considerably from the original proposal, it still met with considerable blowback from opponents.
Let’s take a look at what’s happened previously – and what happens now.
What were the SEC proposing?
Previously, companies only disclosed their climate impact information on a voluntary basis. There has been no standardised way to report climate data, and many companies used different metrics or chose not to report at all.
Although the SEC has been encouraging companies to disclose their climate-related risks since 2010, the voluntary nature of those disclosures has made it much easier for them to water down their data or simply avoid publicising it altogether. Accordingly, in recent years the SEC and its chair, Gary Gensler, have been taking bigger steps towards enshrining disclosure rules in an effort to drive accountability and transparency across the market.
In its original form, the proposed regulation would have required US-listed companies to disclose a range of climate-related risks and greenhouse gas emissions, including Scope 1 and 2 emissions. The proposal also required organizations to disclose the greenhouse gasses generated by their suppliers and partners, known as Scope 3 emissions (if the emissions are material or included in emission targets the company has set.)
What‘s the latest update?
In an attempt to pre-emptively placate likely opposition, the updated rules this March contained some striking omissions. It was, as Fortune noted, “as notable for what it contains as for what it leaves out.” Scope 3 emissions, which are created indirectly along the value chain and can make up a significant proportion of a company’s carbon footprint, were omitted from the final version. So was a direct emissions disclosure requirement for all public corporations.
Nonetheless, despite the dilution, the adoption of the rules marks something of a watershed moment. As Gensler stated before the vote: “Our vote today is on rules, not just guidance like we had in 2010 but on actual rules and ones that require disclosures. Bringing them into such filings I think will help make them more reliable.”
He continued: “I’m pleased to support this adoption because it benefits investors and issuers alike. It would provide investors with consistent, comparable, decision-useful information, and issuers with clear reporting requirements.”
SEC documents show that the disclosure will require companies to share how climate conditions affect their business strategy, operations, and financial condition.
Their reported information must include direct emissions like manufacturing and indirect emissions like energy use, but companies will not be required to report emissions from supply chains and product consumers (which we were part of the original proposal, but not adopted).
As expected, the rule drew what might be charitably described as a mixed response. 10 Republican-led US states – as well as the top US business group – vowed to sue the SEC. Meanwhile, several environmental groups applauded the rule but said they had hoped for stricter requirements.
Although the disclosure is not an environmental protection law, it will certainly serve to increase transparency, with Bryan McGannon, managing director of the non-profit sustainable investment forum US SIF, telling Business Insider that it was “a really good first step” in that regard.
“I think that it’s going to be very valuable for investors to use this information to get that better understanding — and understand if the company is taking it seriously,” McGannon continued. “Are they identifying all the risks?”
He noted that there is a lot of climate reporting that is not being done right now, and the disclosures will allow investors to better digest a company’s climate data and make good investment decisions.
What do companies need to do now?
Companies will not be required to report emissions from supply chains and product consumers, as per the SEC. The supply chain disclosures – Scope 3 emissions – were in the original rule proposal, but were not adopted. As Business Insider noted: “For companies that sell many products or finance infrastructure — like food companies, oil and gas majors, and big banks — these emissions are often the biggest chunk of their overall carbon footprint.”
So does that mean Scope 3 reporting is no longer important? Not quite, say business leaders. Alongside investor and stakeholder pressure on reporting, the latest SEC ruling means that “companies are now facing a wave of global requirements,” according to KPMG’s US ESG Leader Rob Fisher.
He continues: “Amidst these disclosure requirements, the organizations that view new reporting requirements as an integral part of their broader strategy will find themselves in a better position to realize the full value sustainability initiatives can bring to their business.”
“Scope 3 may be out of the SEC’s climate rule but it’s very much in scope for US multinationals and likely many private companies. The SEC’s rule followed actions of the EU, California and the ISSB, all of which require Scope 3 reporting. Regulatory relief in one jurisdiction does not alter the burden imposed in others.”
Sustain.Life’s Chief Sustainability Officer Alyssa Rade concurred, calling the omission of Scope 3 reporting requirements by the SEC an “irrelevant caveat.”
“Companies shouldn’t be lulled into a false sense of security. Existing regulations in California and the EU and resulting pressure from investors and consumers make the SEC’s decision to exclude Scope 3 from their emissions mandate an irrelevant caveat for most global corporations. We’re already witnessing a mad scramble for disclosure data. Companies of all sizes — irrespective of their geographic location — need to understand that climate disclosures will be the norm within the next decade.”
The common consensus seems to be that, regardless of Scope 3 featuring as part of the SEC’s latest ruling or not, organizations need to get their houses in order as a priority. And the benefits extend far beyond just “reporting compliance” as Makersite’s CEO Neil D’Souza says:
“Transparency around carbon emissions is a complex but necessary undertaking, yet many organizations are waiting for mandates before they get their house in order. It’s most often because they have not yet unlocked any business value beyond ‘reporting compliance.’ Creating better, more differentiated products that are priced better, have better win rates, improve brand performance, mitigate supply risks and reduce costs from efficiency measures are all much more powerful value propositions that are unlocked through the process. It just takes time and effort to get there and technology like AI can help solve many of the challenges in tracking, reporting, assurance and dissemination.”
More rigorous emissions regulations will continue to appear. It is only a question of time until Scope 3 reporting, for example, will be mandatory for companies. Countries worldwide have committed to emission targets and those targets will, sooner or later, reach industry level. Companies that take voluntary action now will thrive, but companies who don’t will be left behind. So how can they prepare? There are four key steps to take:
Conduct a data gap assessment: Check what data is available in-house and if the data is easily accessible for stakeholders. At the end of the assessment, you should be able to put together an inventory of climate-related data you already have in comparison to the data the rule requires – and then act on the differences.
Re-evaluate your approach to data collection: Is your sustainability reporting scalable and cost effective? Have you committed to Net Zero goals and can they be backed up with trustworthy data? How long will it take you to have full Scope 3 reporting across all products?
Support your key stakeholders: Key champions for reduction initiatives in an organization will most likely sit across procurement, product management and product design teams. To be able to move forward and hit emissions targets, you need ensure that these stakeholders have everything they need to work efficiently.
Don’t do it alone: Scope 3 reporting is different: The vast majority of data you need does not sit within your company. Tools are invaluable for saving time, increasing credibility for auditors and, most importantly, critical in order to achieve meaningful progress with the data you are collecting. The right tools can help you to report on existing and future products at scale. The reporting obligations of the future are a complex issue that will take companies a long time to solve. Starting now will put your company ahead of others and help you prepare for prospective challenges.
If you’d like more information on how to stay up to speed with the latest regulatory developments, speak to our sustainability experts today.
“Climate change and sustainability are global issues. It’s something everyone needs to be on board with. Not just on a personal level, but on a business level and a political level.”
At Makersite, our employees are here because of their expertise, their backgrounds and their belief in the ability of AI to solve today’s sustainability data challenges. Our staff across three continents have been hand-picked because of what they bring to the table. It’s no different with Alexa Born, one of our Enterprise Sales Managers.
Recently, as a key member of the UK Youth Climate Coalition (UKYCC), Alexa attended the COP28 summit in Dubai. With an M.Sc in Environmental, Economic and Social Sustainability and a background in sustainability-focused roles, she understands what’s at stake.
In the interview below, we sat down with Alexa to talk about her background in sustainability, her role in the UKYCC and COP28, and the hopes she holds for the future. We cover:
How Alexa’s role at Makersite – helping companies to decarbonize their supply chains – sits alongside her work with the UKYCC and COP
Concerns around Scope 3, sustainability reporting and a lack of action from big business
The inherent hypocrisy of hosting a climate conference in heavily oil-producing countries and using it as a platform to generate more oil deals
The difficulties of getting the concerns of today’s youth in front of our politicians and policymakers
The importance of building knowledge around climate and making sure that youth voices are heard
Makersite: Let’s start with the big question. What does sustainability mean to you?
Alexa Born: To me, sustainability is about being conscious of the impact of your actions and about thinking beyond just the here and now. I think people sometimes lose perspective that the greed of today is going to disrupt the needs of people in years to come.
M: Tell me about your background when it comes to sustainability. What got you interested? What motivates you?
AB: I have an older sister who entered the climate space when she was a teenager. As a little girl, that made me very aware of the topic from a young age. Because of her interest, I became interested. I then pursued Human Geography for my undergraduate degree and then went on to do a master’s in Sustainability. It’s something that has become embedded within me, both educationally and professionally.
M: So it was always your intention to pursue that kind of pathway?
AB: Yeah. I feel quite lucky. From a young age I always had it in my mind, quite clearly, that that was the kind of work I wanted to do.
M: Looking to the future, what do you hope to achieve from a sustainability perspective? Where do you see yourself – and the world – in the next 10 years?
AB: Sustainability is obviously a hot topic in terms of career paths. It’s something that a lot of people are very interested in at the moment. But it’s very hard to know what that landscape will look like in 10 years’ time. I certainly never saw myself in supply chain sustainability, but it’s something I became very interested in at university and now during my time at Makersite.
Looking ahead, I’ve always had a really strong interest in the intersectionality between health and sustainability and climate change. That’s something I’d like to move towards. But equally, where I am now with Makersite, and balancing that alongside climate activism, feels very fulfilling.
M: That segues nicely into my next question. Tell me a bit about what you do at Makersite, and how that dovetails with your work at the UKYCC and the recent COP28 summit in Dubai?
AB: Sure. At Makersite, I work on the business development side of the business. I speak to manufacturers in the UK and Nordic markets who are looking to decarbonize their supply chains, whether that’s due to regulatory pressure or ambitious targets (like achieving Net Zero by 2030) or whatever it may be. I reach out to them and see how we [Makersite] can partner with them to decarbonize their supply chains through sustainable procurement, better product design or another avenue.
In terms of how that relates to my work at COP, I was there predominantly as a youth activist and as a delegate of the UKYCC. The UKYCC runs a different campaign every year, and this year we campaigned on a Conflict of Interest (COI) policy – particularly relevant given where the event was held this year, and because of the obvious conflict of interest between the role of the presidency and the overarching goal of what the COP seeks to achieve.
I took the opportunity of being in that space to attend some really interesting side events around sustainability and to connect with some people from the industrial arena. I wanted to understand what people’s challenges are and what discussions are going on in relation to the problems that Makersite is seeking to solve.
From that perspective, Scope 3 emissions seemed to be a key pain point in pretty much every single one of the side events I attended. That definitely seems to be the biggest point of concern at the moment.
M: For those who don’t know, how would you describe COP? What are the goals of the event? Who attends?
AB: COP stands for Conference of the Parties. It basically provides an opportunity every year to bring together parties from all over the world and provide a platform for them to voice their concerns about what’s happening with climate change, as well as a chance to push their agendas on where they feel we should be globally on climate change. It is a global issue, after all.
I think the real beauty of COP is that it provides a platform to nations and parties that don’t tend to have as loud a voice in the global space. The small island states, for example.
M: And it’s those small island states that are the most vulnerable to the impact of climate change.
AB: Exactly. It gives those who are really suffering most a place to voice that and also an opportunity to contribute to the solutions that are being put in place to deal with, mitigate and adapt to the climate crisis.
M: You attended as a delegate of the UKYCC. You mentioned the campaign being undertaken this year, but what’s the goal of the Coalition more generally?
AB: Within the UKYCC we have different working groups. Each of those groups have a variety of goals. I’m in the COP working group. We send a delegation to attend the COP each year, where we seek to represent youth voices. When we’re recruiting for the UKYCC we make sure that we are as representative as possible geographically, demographically and so on so that when we go to COP and we’re lobbying UK negotiators and EU negotiators, we’re doing it on behalf of a true reflection of UK youth.
M: How do the negotiators treat you? Do they take what you have to say seriously? Do they understand the points you’re trying to get across?
AB: It’s a mixed bag. Every year we get told how important youth voices are to them and how much they want to know how we feel they’re doing, both positively and negatively. But getting time on calendars for the last few years has been increasingly difficult, which is frustrating.
For that reason, we’ve sought meetings with other important voices at COP. Members of the opposition, for example. We met with Ed Miliband. We met with some advisors of Humza Yousaf. When we’re unable to connect directly with negotiators, we do try and get a bit more creative. That being said, the second of the two delegations we sent this year did actually end up having some facetime with the UK negotiators and that allowed us to push our agenda a little bit.
M: Tell me more about your Conflict of Interest agenda. What does it mean? What’s the objective?
AB: We have a few asks. Our demands are that the UNFCCC (United Nations Framework Convention on Climate Change) formally recognizes the need to have a conflict of interest policy to prevent bodies or voices that don’t have our best interests at heart being in those spaces and lobbying for their own objectives.
This year, for example, KBPO (Kick Big Polluters Out) released some astounding evidence. COP28 had the largest amount of fossil fuel lobbyists in attendance ever. They were actually the largest ‘delegation’ apart from Brazil and the UAE at the whole summit. That doesn’t make much sense at a climate change conference. And that’s what we do – we go to COP and we protest against these actions. You wouldn’t allow tobacco companies to organize a health conference. So why are we allowing fossil fuel companies to organize and contribute to a climate change conference? Ultimately, how do you square the goals of COP with hosting in a nation like the UAE?
M: There’s definitely some hypocrisy there.
AB: Yeah, absolutely. We discussed a lot whether we even wanted to attend this year or not. That’s what’s a shame about this particular COP. The conflict of interest angle sparked the interest of a lot of people, and a lot of people who wouldn’t have interest in COP28 normally. Like the fact that the COP president used the event as a platform to generate more oil deals. I had friends, who otherwise would have no interest, speaking to me about that.
But the whole hosting it in Dubai angle does reduce the legitimacy of what is a really important conference. Last year it was in Egypt, Next year it’s in Azerbaijan. That’s three years in a row where oil-producing nations are hosting the COP. We’re seeing language around phasing out fossil fuels being watered down too. That’s clearly for the benefit of the host nations.
The beauty of the COP is that it represents everyone’s voice. Climate change is a global issue. We need to make sure that everyone is included in developing and implementing these solutions. If nothing else, COP28 has shown that that’s not easy.
M: You mentioned Scope 3 previously. What are your key takeaways from this year’s event?
AB: There are literally thousands of side events at COP and I only have so much time, so I could only attend a small percentage of them. And the ones I did attend were focused on issues that matter to Makersite. But the onus seemed to be predominantly on the value chain / supply chain / decarbonization piece. The challenges around Scope 3 reporting came up consistently.
One frustration I heard multiple times was that we’re at COP28 – the 28th one of these conferences – and we’re still talking about reporting. That’s the number one step. The first step. There’s a long way to go. There was a lot of frustration around reporting frameworks and their lack of synergy. Everything is very siloed, there’s a very limited sharing of information, there’s no standardized approach.
All of that makes it very difficult for organizations. They’re spending way too much time on reporting rather than actually working and dedicating their capacity towards the things that matter. Reduction strategies, for example. There were some interesting announcements about different coalitions that are starting to emerge. We’re seeing different industrial organizations starting to work together to establish some kind of standardization, particularly when it comes to working with suppliers and dealing with all of the paperwork that goes with that.
M: You’re well versed in this space. How can anyone interested in learning more educate themselves? What advice would you give to companies and people looking to take the next step?
AB: It’s about standardization and regulation to guide different industries and different organizations. As I’ve said several times, climate change and sustainability are global issues. It’s something everyone needs to be on board with. Not just on a personal level, but on a business level and a political level.
Frameworks like ESPR can be valuable for companies seeking guidance, but they’re not perfect and more work needs to be done so that they can be adopted more smoothly.
Personally, I’m still very much in the process of building my knowledge. There are some amazing resources out there, but it’s impossible to be an expert in everything. Speak to family and friends. Find out where your interest lies. Look for key voices that resonate with you. Social media is great – LinkedIn and Instagram particularly. People share incredible resources and, for me at least, it snowballs from there.
M: Ok, last question. What role do you see your generation playing when it comes to the climate crisis? What do you hope to achieve?
AB: My generation is the first climate-literate generation. It’s been there since day dot. It’s always been present in our lives. We’ve had the unfortunate reality of climate anxiety since day one. But with that comes power.
People in my generation, people that I know, are very concerned about this, and they’re very interested and very aware. Knowledge is power. In terms of our role, leveraging youth voices is huge. Unlike most other movements, youth voices have real leverage here. We’re the ones who have to deal with the consequences.
M: You’re facing the repercussions.
AB: Exactly. I think it’s really important for us to make the most of this unique position and educate those around us, particularly older generations who perhaps didn’t have the opportunity to learn from such a young age like we have. And I think as the job landscape continues to shift, it’s something we’re all going to be involved in one way or another. We need to take those opportunities when they arise.
But the education piece is the biggest one. We all know someone from the older generations who either doesn’t know or doesn’t want to know. And as the first climate-literate generation, it’s our responsibility to change that.
There are many good reasons to take a more granular approach to measuring scope 3. Aside from meeting changing regulatory requirements, the more detail and the more data you have, the easier it will be to assess where the emission hotspots are across your value chain, allowing you to prioritise reduction strategies. Additionally, it’ll help you to identify which suppliers are leaders and which are laggards in terms of their sustainability performance.
So why aren’t more organisations concerned about a higher – and deeper – level of accuracy? At a time when sustainability teams are trying to strike a balance between regulatory reporting and compliance, it makes absolute sense to collaborate with product teams in the business in order to ensure that the products being created are as sustainable and as circular as possible. Doing so will also generate efficiencies within the sustainability process, avoiding wasted resources and allowing for greater speed. But how do you achieve it?
The answer is straightforward: Combine LCAs with scope 3 reporting. Putting together a granular LCA is a time-consuming and intensive process. So is figuring out where the data is for scope 3. Despite this, many businesses still separate the two. Perhaps it’s time for a rethink.
Moving away from a siloed approach
We can all agree that working together is better than working apart. At a time when regulatory demands are more stringent than ever before, customer and stakeholder expectations are heightened and sustainability reporting requirements are multiplying at an unprecedented pace, operating in siloes is not the way forward.
It’s an idea that’s very much applicable when it comes to using the same data foundation for both LCAs and scope 3 reporting. Across the product development process in any area where scope 3 is used – from product engineering to product design to product management – LCAs and PCFs are a key tool when it comes to understanding what’s going on in the product.
However, when it comes to corporate reporting, it’s often the case that different methodologies are used to analyse the same products. If different parts of the organisation are working with different types of data they are very likely to find themselves running in opposite directions when it comes to the insights they stand to gain from their reporting. By any measure, this is not a good outcome.
When considering scope 3 and product reporting at a corporate level, many organisations currently opt for a spend-based approach (i.e. taking the financial value of a purchased good or service and multiplying it by an emission factor – the amount of emissions produced per financial unit – resulting in an estimate of the emissions produced.)
However, such an approach will result in an entirely different picture from a scenario where direct purchased goods are being looked at from an LCA perspective. The likelihood is that the organisation will either end up reporting fewer emissions or too many emissions when reporting for category 1 in scope 3. The process of a spend-based approach is simply too broad and based too much on guesses and speculation, and pales in comparison to the granular analysis that an LCA is capable of.
Indeed, it’s highly likely that the insights gained at a corporate level will differ wildly from those gained by, for example, a product engineering department – due solely to the different approaches commonly in use. When it comes to scope 3, a spend-based approach has a level of abstraction that is so high that it is essentially impossible to get a real and detailed picture of what’s going on with your product, leaving you working with nothing more than a best guess as to what kind of impact it might have.
An unnecessary risk
So what does the future look like? An organisation that works hand-in-hand with a product at all stages – from early on in design to when it’s being built and the materials are being sourced – is one primed for success. But that synergy is only possible if all parties work from the same data foundation in order to drive decisions.
In today’s reporting environment, it’s not an overreaction to suggest that failing to take a joined-up approach will lead to the failure of many corporate reduction initiatives. A disparity and a lack of consistency between departments – from procurement to product development to engineering – is a risk that’s not worth taking.
Besides the operational waste generated by a siloed approach, there are numerous other risks to consider. A lack of granularity in your scope 3 reporting may lead your organisation to spend money on entirely the wrong end of its portfolio and is also likely to drive transformation and innovation in the wrong direction, the financial and reputational consequences of which may be irreparable (from losing market position to damaging stakeholder relationships to falling behind peers and competitors.)
Ultimately, in a scenario where an LCA analysis is done with one tool and scope 3 analysis is done via a spend-based approach, the result is the same: the organisation invariably has to correct their scope 3 reporting further down the line. It might seem easier to do both separately, but separating the two processes is a mistake – one pockmarked by contradictory insights from different departments, and one that risks leaving your organisation far behind peers who have had the foresight to combine both LCA and scope 3 under the same banner.
The benefits of using an LCA approach for scope 3
When we discuss using an LCA to calculate scope 3, it makes the most sense to look at category 1: ‘Purchased goods and services.’ This category includes all upstream (i.e., cradle-to-gate) emissions from the production of products purchased or acquired by the reporting company in the reporting year. Products include both goods (tangible products) and services (intangible products).
The data granularity gained from an LCA approach is significantly better than what could be achieved by using a spend-based methodology, with some companies having seen reductions of up to 90% in their scope 3 category 1 GHG emissions as a result. Furthermore, LCA data can also be used to explore decarbonisation pathways. Using already existing LCAs and PCFs and utilising data that is significantly more precise makes by far the most sense.
The pros for using actual data for calculating scope 3 GHG inventory far outweigh the cons. It is more scientific and more accurate. It considers entire cradle-to-gate transmissions. It conforms with globally recognised standards. It enables true decarbonisation. And it offers the ability to evaluate suppliers on carbon emissions as well as price, quality and delivery. A spend-based approach – inaccurate and outdated – is simply no longer fit for purpose.
Finally, beyond the obvious risks and inefficiencies we’ve highlighted in this article, it’s worth remembering that this a decision potentially worth many multiple millions. If you’re only conducting LCAs right now but find yourself in a position where scope 3 reporting is coming very soon then you’re reading this at the right time. If you’ve already separated LCAs and scope 3 reporting, then now is very much the time for change.
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