The Challenge of Scope 3
Regulatory and fiduciary changes to disclosure requirements, and evolving consumer sentiment, mean that businesses are facing an unprecedented push to identify and significantly reduce their Scope 3 emissions.
The result is the restructure of organisations to build better alignment across functions, the development of commercial models that accelerate collaboration across value chains and a realization that initiatives promote innovation that can drive business advantage.
In 2022, CLC member CEOs developed five proofs of concepts across multiple industry sectors. A year later, we focused on how to scale Scope 3 impact, identifying barriers to progress and defining practical ways in which all members could mature their business models more quickly. We continue that work today.
Scaling Impact on Scope 3 examines the lessons learnt by participating member CEOs, the mindset changes needed to drive change and the role of value chain partners in leading progress.
Scope 3 Roadmap
At COP27 in November 2022, we introduced the Climate Leaders Coalition Scope 3 Roadmap. This has been built by CEO’s for CEO’s to drive change.
The reduction of Scope 3 greenhouse gas (GHG) emissions is a business-critical issue, requiring a shift in systems thinking and new kind of collaboration across value chains.
CEOs are uniquely placed to lead on reducing value chain emissions and by doing so, accelerate the transition to a low carbon future. The commercial opportunity for first movers who take action is significant.
But how do they navigate the challenges associated with a new way of working?
For the past 10 months, 50 CEOs have been working together to develop 5 pioneering proofs-of-concept on how to create 1.5ºC aligned value chains.
The result is the CEO Scope 3 Roadmap, a practical guide on what it takes to reduce Scope 3 emissions through collaboration across value chains, written by CEOs, for CEOs.
Financial and Commercial Implications of Scope 3
Scope 3 represents significant challenges to all sectors of the business community. The CLC is pleased to present the Financial and Business Implications of Scope 3 report.
Fully carbon neutral value chains will require changes in commercial arrangements are risks are profiled and mitigated in ways not previously identified or adopted.
Value chains will need redesign are risk and rewards are reallocated, and different types of funding will need to be considered. The report considers a proposed Life Cycle and Financing Timeline, the Sustainable Bond Market.
Case Studies from CLC member value chains are included along with issues to be addressed in a sample of value chains
Scaling Impact in 2023
In 2023, we recognised the need to transition from proofs of concept to scaling scope 3 impact. We also acknowledged the varying levels of scope 3 maturity among our 50 members, offering an opportunity to collectively enhance our scope 3 impact. Our focus on scaling scope 3 impact this year has been three-fold:
- An evidence base on how progressed each of our members are in terms of the 8 steps to measure, report and reduce scope 3 emissions – the Scope 3 Excellence Checklist.
- A series of practical and collaborative scope 3 catalyst sessions to address major blockers and enable more of our members to mature faster.
- Progression of value chain decarbonisation initiatives started through last year’s scope 3 proofs of concepts.
