Ecoscore to calculate Scope 3 emissions

It is possible that only a fraction of a company’s carbon footprint will be counted when the carbon tax comes into play this July.

The new legislation obligates selected Australian companies to report on their Scope 1 and Scope 2 emissions - those they produce directly and from their electricity use. But Scope 3 is the other dimension - the emissions that arise across the value chain, from suppliers, transporters and consumers. And these indirect emissions are often much greater than your own direct emissions.

Calculating Scope 3 emissions has traditionally been a complex, time-consuming and costly process. But Adelaide companies Carbon Business and EconSearch have collaborated on Ecoscore, a tool to quantify hidden Scope 3 emissions using economic modelling. It analyses and reports on emissions, pinpointing carbon hotspots all the way back to resource extraction.

With this information, an enterprise can work with key suppliers to systematically reduce emissions across the whole life cycle of their business or product, develop carbon strategies and manage carbon risk. It can be used for product research and development, saving time and money in evaluating new designs; and to support corporate decision making, sustainability reporting, carbon neutral claims, product labelling and more.

Justin Wynn of Carbon Business and Dr Julian Morison of EconSearch see many benefits in knowing the extent of Scope 3 emissions.

“This isn’t only about helping companies to reduce their environmental impact,” said Dr Morison.

“Organisations can identify carbon hot spots and vulnerability to rising energy prices - factors that will impact on their own costs. It’s a tool for risk management, for kick-starting innovation, for improving profitability and much more.”

According to Wynn, those who have used Ecoscore have been surprised by their results.

“A leading Melbourne entertainment company tracked their ‘cradle-to-gate’ emissions and found that even with their strong environmental practices, their indirect emissions were more than four times larger than their own on-site emissions.”

Ecoscore includes the following benefits:

• The footprint of any entity with financial expenditure can be scored. Valid entities can be a product, service, project, company, government authority or geographic region.
• It calculates Scope 3 emissions using Australia’s GHG inventory as reported annually to the United Nations Framework Convention on Climate Change (UNFCCC).
• It pinpoints emissions up to 11 tiers back in any supply chain and reports emissions from over 1200 products in the value chain.
• It is fast, because it does not rely on carbon life cycle databases.

The National Carbon Offset Standard, introduced in July 2010, has made Scope 3 a mandatory consideration in support of ‘carbon neutral’ claims.