Scope 3 Emission estimation: Blog 3

Scope 3 emissions: Tactical approach for capturing the scope 3 value at defined points (Blog 3 of 4)

Preface: Even if you have the most sophisticated and automated downstream and upstream supply chain, there is no surety that you will be able to capture all the values, required for scope 3 calculation.

The sheer complexity of the multiple stakeholders and numerous interactions happening among them is difficult to catch even with highly automated supply chain. Another aspect is that many actors in the supply chain operating re hidden from you and there can be informal data and information sharing, which is verbal on local devices as simple as mobile, which is not part of integrated supply chain.

In blog 1 of this series, we have talked about the hidden actors in your supply chain. These hidden actors may be transporting agents, transport company owners, agents deployed at state borders, ticket booking agents for travels, ticket agency, warehouse agents and managers to name a few.

We talked about supply chain value map in blog 2. It is possible to create a value map of all the hidden and visible actors, their roles, their devices, information and data flow and how that can be brought into day-to-day operations.

In certain situation, there is no way a particular piece of data/information required for scope 3 emission can be fetched. In such cases we have to use the surrogate indicators or industry benchmarks to arrive at the data/information required.

Mapping of actor downstream and upstream supply chain

There are Five main types of actors who operate the supply chain and have the necessary data and information with them.

• ·??????Visible Actors: Vendor and people in organization with roles and responsibility.
• ·??????Hidden Actor: These are agents and subagents which help main vendors and often out of sight, though they have critical data and information inputs.
• ·??????Devices: Equipment fitted to devices (GPS, Track and trace) is the third actor
• ·??????ERP/MES/Scada: This transactional system is the main actor.
• ·??????Manual system: SME’s who do not afford, ERP or automation. They have all the data and information in manual registers or excels.

The Below Fig. 1 describes some of the main actors in downstream supply chain.

?Fig 1: Main actors in supply chain

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These actors have data and information related to their areas (Scope 3). They have information and data related to their roles and responsibilities and often lacks overall picture of use of this data and information for Scope 3 emission estimation.

These actors use multiple systems to capture/enter, information related to their own areas. 95% of the data required for scope 3 emissions ,can be obtained from these actors. These actors use multiple ways and systems right from manual writing to highly automated SCM system.

Systems used by these Actors.

Fig. 1 also illustrates various types of applications, devices, automated systems, control systems, ERP and so on. The problem is capturing all these data required for scope 3 emissions consists of:

• ·??????Except in ERP/MES/SCADA/GPS system, scope 3 emission data is not captured systematically.
• ·??????The supply chain ecosystem partners have their own systems , but they may not necessarily capturing all the scope 3 emission parameters.
• ·??????Small vendors (SME) cannot afford to have ERP systems, so they have manual system of records and management.
• ·??????The format of the data required is not consistent among all the stakeholders in supply chain.
• ·??????Agents and subagents mostly operate of manual notes and recording of the data. Some of them do have mobile and tabs but they are not extended with ERP as they are authorized company or vendor persons.
• ·??????Actors in supply chain, record what is relevant and not necessarily what is required for scope 3 emission estimation. It is always a siloed data.
• ·??????Connecting multiple systems across the supply chain for data and information flow is a challenge due to differences in compatibility of software and hardware.

·??????Please note in 10 to 15% of cases, the data will be approximate as the hidden actors are not expert and they record the data and information as told to them by their vendors.

Defining the data capturing points and methodology

It is necessary to define the data capturing points where interactions take place within the supply chain. Interactions can be physical or verbal. These interaction points need to be defined precisely with both visible and hidden actors.

Besides the data points, it is also necessary to define the format and frequency of the data required and where it to be fed and in what mode.

Lot of companies reporting scope 3 emissions have developed their own methodologies to collect the scope 3 emissions data. However fact remains that this involves lot of manual efforts to fetch data from vendors ,agents and systems.

The scope 3 emission data , if it needs to be properly captured some fundamental rules needs to be followed.

• ·??????Belief that data is available within the supply chain.
• ·??????Visual representation of the supply chain with all actors mentioned in fig1.
• ·??????Plotting scope 3 emission collection points on Visual representation diagram.
• ·??????Training of the actors about the scope 3 and expectation from them
• ·??????Defining and understanding of the scope 3 data by all Actors
• ·??????Connect ERP with as many systems as possible.
• ·??????Initial few months data may not be in the required format. Do not give up. Retrain
• ·??????Have a final architecture (Application) for scope 3 emission data collections

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Pappa don’t preach.

Quoting some of the examples from my person experience.

For one of the organizations, we found that fuel expenses were not matching overall. We have mapped ,fleets ,maintenance consumption ,generators and so on. We went deep dive with visual representation of all consumption points for plant as well as for warehouses. Finally, we could zero it out. In one of the warehouse forklift consumptions was not accounted for. In next 2 years as a move to greener option, we have moved to battery operated forklifts.

Another example was that of difference in waste management area. We were failing to match the volume. The problem was not difficult. We have found that secondary and tertiary packaging in stores was not accounted for.

There are many such examples.

It is necessary to take the first step in scope 3 emission estimation.

?#sap #saperp #sustainability #sustainable #scope3 #scope3emissions #atos #cfos #sustainabilityreporting #ceos

Prakash wagh

Director solutions and Sustainability

Atos. India.

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Disclaimer : Views in the article is of the author and not of the company represented. Aim of article is to create awareness about SAP sustainability solutions.