Guy Battle, CEO of Social Value Portal, explores how Scope 3 standards offer a new perspective and a clear path forward for those ready to take the next steps on their decarbonisation journey
The UK’s public sector organisations have been tasked with leading the way towards net zero, and are already playing a critical role in getting our nation closer to its 2050 decarbonisation targets. But as the energy crisis deepens, environmental disasters increase and the Climate Change Committee (CCC) issues warnings that current programmes will fail to deliver net zero on time, it’s time for the public sector to scale up its efforts (1).
What is Scope 3 reporting and why is it important?
The Scope 3 standard was developed by the Greenhouse Gas (GHG) Protocol. Scope 3 covers CO2 emissions that arise from activities outside of an organisation’s direct control. For public bodies, which usually rely on relatively complex supply chains, the majority of these emissions will be attributable to the operations of their materials or goods suppliers and service providers.
Unlike direct Scope 1 and Scope 2 emissions, which must be reported by all UK government departments and their agencies under the Greening Government Commitments 2021 to 2025 (and under the Streamlined Energy and Carbon Reporting (SECR) scheme for those that include limited company or LLP elements ), reporting of Scope 3 emissions is currently voluntary. However, the argument for taking the Scope 3 standard and the ethos behind it seriously is growing day by day and week by week.
With Scope 3 emissions often accounting for up to 90% of an organisation’s
carbon footprint, taking responsibility for lowering CO2 emissions beyond your own operations will not only offer an opportunity to set and achieve more ambitious net zero goals for your organisation, it also provides an opportunity to make a meaningful contribution to a better, sustainable future for everyone (2). After all, the overarching aim of Scope 3 is not to lower carbon within one organisation but to facilitate the creation of a low-carbon economy.
Creating a low carbon eco-system
Public bodies wield significant purchasing power; government spending in the UK was last recorded at 44.6% of GDP in 2021 (3). By including supply chains in their decarbonisation efforts, public sector bodies not only have the ability to increase demand for and availability of low-carbon products and services, but they also have the ability to encourage more sustainable working practices in the businesses they buy from.
For those businesses, the positive impact of taking a more sustainable approach will be two-pronged: it will empower them to contribute towards the protection of our planet and, in a world where investors, stakeholders, customers and employees are becoming increasingly aware of the need for climate action, it will also benefit them commercially, financially, and reputationally. It may even help them attract talent and increase staff satisfaction levels; two crucial considerations during the era of the ‘Great Resignation’ (4).
Taking action on Scope 3 may not be mandatory but extending decarbonisation efforts to your supply chain does seem like a wise choice. Lowering carbon across the supply chain
creates a win-win situation, providing a way for public sector bodies to build a thriving ecosystem of organisations all working towards a common goal and each reaping the benefits of doing so.
Relationship building is the key to success
Scope 3 carbon reductions can be more challenging to achieve than those under the direct control of your organisation. Every supplier will have a different range of capabilities and
constrictions, so creating an environment of cooperation and collaboration will be key to success. It’s going to be vital that you set clear expectations, have standardised ways to collect information and implement processes that are easy to follow. To maximise on the opportunities available and assist in the creation of a more collaborative mindset, public sector organisations could also consider working with their suppliers to pursue Scope 3 standards as part of a broader social value approach.
Social value is the term used to describe the positive outcomes an organisation creates for individuals and society as a whole. It can be created through initiatives such as donating volunteer hours, offering apprenticeship schemes or mentoring job seekers – and will naturally include an environmental element. Our National TOMs framework is one way that organisations can begin to measure and report on social value and make actionable and measurable carbon commitments. It focuses on five themes, of which Environment is one; helping businesses focus their decarbonisation efforts and contribute to safeguarding the planet.
Taking a social value approach is one way that public sector bodies can start to build a dialogue with the businesses that make up their supply chains and demonstrate their commitment to supporting them in their sustainability efforts. It is, after all, a difficult time for many businesses and lowering carbon may have fallen down the list of priorities – but staying on track for net zero will be easier if we all work together.
About Social Value Portal
Social Value Portal is an online solution that provides precise, standardised reporting to enable organisations to quantify and maximise the social value generated – making good go further. It provides the tools to measure, manage and report both financial and non-financial data in a meaningful, robust and transparent way for all stakeholders.
Social Value Portal launched the National TOMs Framework in 2017, alongside the independent National Social Value Taskforce. The Framework provides a minimum reporting
standard for measuring social value, integrating the standards into their measurement approach as a minimum.
Social Value Portal’s aim is to promote better business and community wellbeing through the integration of social value into day-to-day business across all sectors.
References
1. https://www.theccc.org.uk/2022/06/29/current-programmes-will-not-deliver-net-zero/
2. https://www.carbontrust.com/news-and-events/insights/make-business-sense-of-scope-
3. https://tradingeconomics.com/united-kingdom/government-spending-to-gdp
4. https://www.forbes.com/sites/adigaskell/2021/10/31/employees-demand-that-we-become-more-sustainable/?sh=255d869f3f80
