Ensuring Quality Data Collection for Scope 3 Inventories: Tips and Tricks
Scope 3 greenhouse (GHG) inventories have become an essential tool for organizations seeking to improve their environmental performance. Their disclosure might even become mandatory in the US based on proposed requirements from the SEC.
The quality of an inventory is only as good as the data used to create it but collecting Scope 3 data can be intimidating. To get you started, here are some tips to help navigate the supplier engagement and data collection process.
Get familiar with your value chain by creating process maps
To help identify potential emissions sources that will need to be captured in your inventory, collaborate with stakeholders to create value chain process maps. The process maps can serve as a checklist for the data requests that you will issue to stakeholders:
- Have you requested data from each supplier/emitting activity noted on the map?
- Have you received transport data for each leg of the journey documented on the map?
- Have you considered all the potential end-users of your products, and how they each might treat them at end of life (e.g., recycle, landfill, reuse)?
You will come out of the exercise with a much clearer understanding of the moving parts involved in your business and be confident that you are accounting for all potential emissions sources in your Scope 3 inventory.
Find the right people to ask for data
After establishing a clear and complete picture of your value chain, identify the right people to request the data from.
Sometimes the necessary data is available internally. Consider reaching out to team members who work closely with suppliers and customers, such as the procurement team for purchased goods and services or logistics specialists for transportation data. However, it is likely that you will need to reach out to suppliers for additional data. Be prepared to be redirected a few times before you can connect with the specific person at the supplier who has the datasets you need. This is especially true if your suppliers have less experience with GHG inventories or do not have robust data management systems.
Once you have identified the right contacts, keep a log of who is responsible for each specific data point to streamline the data collection process in future years. It is common for this data collection process to take a long time, so try to initiate these conversations with suppliers early on.
Position data requests to your suppliers
Once you have identified the right stakeholders to engage, initiate the data request in a way that conveys the importance of the inventory and the valuable role of their data in the process. Remember that your suppliers may not be familiar with Scope 3 or the purpose of putting together an inventory.
Emphasize the impact of the inventory on your company’s sustainability strategy and on supplier engagement (e.g., if inventory findings will result in sustainability criteria being applied to supplier selection.) Stakeholders will be more informed and therefore be more likely to provide higher quality data from the start, expedite data collection, and improve their own data management systems. Remind them that you are likely to come back with a similar data request every year going forward.
Assess supplier sustainability maturity
Try to gauge the supplier’s sustainability maturity – have they published a sustainability report, or have you discussed sustainability initiatives with them in the past? – and tailor the amount of context you provide accordingly.
If your suppliers seem to have higher sustainability maturity, ask if they have conducted Life Cycle Assessments (LCAs) for the specific products which your organization buys from them. A more mature supplier might also already have a Scope 1 and 2 inventory for their business. This can be used to allocate an estimated proportion of the supplier’s emissions that are related to your business (e.g., emissions related to the manufacture of the products that your business purchases from them) and would belong in your Scope 3 inventory. See Chapter 8 of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard for guidance.
Create an Inventory Management Plan (IMP)
Since you will be completing the inventory process annually, it is worthwhile to develop a formal and repeatable data collection process, so that next year’s inventory can be completed as efficiently as possible.
This is the value of creating an Inventory Management Plan (IMP) – an internal-facing document which describes an organization’s process for completing a GHG inventory. An IMP can help stakeholders understand the data needed for the different Scope 3 categories, the right contacts to reach out to get each piece of data, how to handle potential limitations, and ultimately how to use this data to quantify emissions in your value chain. By following a consistent methodology based on what is included in the plan, you will be able to compare year-over-year results accurately and be better equipped to meet external reporting requirements.
While you wait to receive your requested data, start preparing to quantify emissions by determining which calculation methods you will use for each Scope 3 category (GHG Protocol Technical Guidance for Calculating Scope 3 Emissions offers helpful guidance.) Confirm that the data coming in satisfies the requirements of the calculation methods and follow up with stakeholders as needed. Once you have all the data, you will be ready to calculate your Scope 3 inventory.
Organized data collection will set you up for successful Scope 3 inventory development. Eventually, your Scope 3 inventory will enable you to identify high-impact emission reduction activities and monitor the performance of your sustainability strategy and targets. As you continue to build on the process and gain comfort with each iteration, your inventory – as well as your relationship with suppliers and stakeholders – will become more robust.
At Ramboll, we’ve worked with many companies to help them on their sustainability journey. Please get in touch to learn more.
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About the Author
Nicole is a Strategic Sustainability Consultant at Ramboll, working at the intersection of policy, climate, and operations to create impactful sustainability solutions for corporate clients. With a focus on decarbonization and circular economy, Nicole helps clients with sustainability strategy development, reporting and stakeholder management, and navigating an evolving regulatory landscape. Reach out at email@example.com with any questions about Scope 3 inventories, Ramboll’s service offerings, or anything else related to sustainability.