The importance of understanding and managing greenhouse gas (GHG) emissions has skyrocketed as businesses look to play their part in tackling climate change. Beyond the direct emissions from owned or controlled sources (scope 1) and the indirect emissions from the generation of purchased energy (scope 2), scope 3 emissions from a company’s value chain are increasingly gaining attention. With increased scrutiny from stakeholders, there's a growing demand for specialized software to report and manage these traditionally difficult-to-track emissions. In this post, we’ll delve into the best scope 3 software options available today.
What is Scope 3 software?
Scope 3 software enables businesses to track and report value chain emissions - the indirect GHG emissions associated with a company's activities but occurring outside its direct operations.
Scope 3 accounting software is a digital solution designed to help businesses measure, track, and report emissions resulting from their entire value chain. These emissions can range from business travel and employee commuting to waste disposal and the production of purchased goods. Given the complex nature of scope 3 emissions, software that simplifies and streamlines the measurement process is invaluable.
What to look for in Scope 3 software
- Comprehensive Coverage: The software should provide different calculation methods for all 15 scope 3 categories to enable companies to evolve their accounting as data collection matures.
- Supplier Engagement Tools: Seamless collaboration with suppliers is vital. The software should provide tools to facilitate data sharing, feedback, and performance tracking with all suppliers.
- Intuitive User Interface: Given the complexities of scope 3 emissions, a user-friendly and intuitive interface is crucial.
- Real-time Analytics: As with any data-driven endeavor, timely insights can be game-changing. Real-time analytics help businesses adapt and adjust strategies promptly.
- Integration Capabilities: The ability to interface with other business systems is essential to collate and analyze data from various sources effectively.
- Scalability: The software should grow with the business, handling increased data loads and more complex reporting as the organization expands its sustainability initiatives.
The 10 best Scope 3 software of 2024
*Based on Persefoni’s assessment of the carbon reporting technology landscape today
A pioneer in the carbon management sector, Persefoni has built a robust and reliable platform that empowers businesses to efficiently measure, analyze, and reduce their carbon footprints. Its intuitive dashboards provide users with emissions insights and transform the complex process of scope 3 emission management into a streamlined experience. On the supplier engagement front, Persefoni’s platform facilitates active collaboration, enabling businesses to collect and aggregate data from their suppliers, ensuring accuracy and rigor.
Sweep blends aesthetics with efficiency, offering companies a powerful suite to monitor and curtail their carbon footprints. The user-centric interface is backed by real-time data collation tools. Sweep’s prowess lies in its advanced supplier engagement capabilities, providing businesses the tools to collaborate seamlessly, share data effectively, and ensure scope 3 emissions are captured in their entirety.
Sphera’s comprehensive solution supports businesses in their sustainability visions. Its carbon accounting tool focuses on thorough reporting of scope 3 emissions. Additionally, its supplier engagement features facilitate robust collaborations, facilitating comprehensive data acquisition from various entities in the value chain.
More than just sustainability software, Envizi offers a holistic approach to carbon accounting, with a focus on scope 3 emissions. Its integrative design means that businesses can readily fold in other critical data streams. On the supplier front, Envizi's tools ensure smooth collaboration, allowing for the aggregation of diverse datasets that feed into a comprehensive scope 3 emissions report.
With its automated solutions, Greenly aims to revolutionize carbon accounting for the modern business. Its algorithms autonomously handle vast scope 3 emission data sets sourced from multiple points. In terms of supplier engagement, Greenly's platform streamlines communication and data collection, ensuring businesses have a comprehensive grasp of their emissions from start to finish.
6. Net Zero Cloud by Salesforce
Built on the formidable Salesforce foundation, Net Zero Cloud is crafted for scalability. The platform boasts nuanced reporting tools and sophisticated analytics to deep dive into scope 3 emissions. Its supplier engagement framework enables businesses to create a cohesive network of data exchange and collaboration, critical for holistic carbon accounting.
Driven by a sustainability-first ethos, SustainLife introduces a myriad of tools for environmentally conscious small and medium-sized businesses. Its scope 3 reporting suite is robust and user-friendly. The platform also emphasizes supplier engagement, offering functionalities that simplify collaboration, promote transparent communication, and ensure that data from every corner of the value chain is included.
8. Sinai Technologies
Sinai stands out with its thorough approach to carbon management. The platform is tailored to aid businesses in navigating the nuances of their scope 3 emissions. Moreover, Sinai underscores the importance of supplier integration, offering clear avenues for collaboration and data-sharing, ensuring all scope 3 emission facets are captured and reported.
9. IBM Environmental Intelligence Suite
Leveraging IBM's legacy of technological innovation, the Environmental Intelligence Suite integrates advanced analytical tools to help businesses map their environmental journey. Its scope 3 modules are designed for precision and user-friendliness. IBM also prioritizes supplier engagement, ensuring businesses can collaborate effortlessly with their supply chain partners to accumulate, verify, and report all relevant emissions data.
A forerunner in ESG principles, Diligent’s ecosystem facilitates businesses in managing their sustainability targets holistically. The platform’s scope 3 modules stand out in both depth and user experience. The suite also emphasizes seamless supplier collaborations, providing tools that enable easy data exchange and aggregation, ensuring a complete picture of a business's scope 3 emissions.
What is an example of scope 3 emissions?
Scope 3 emissions, also known as value chain emissions, refer to indirect greenhouse gas emissions that occur outside of a company's direct operations but are associated with its activities. These emissions can be from sources upstream (e.g., related to the production of purchased goods and services) and downstream (e.g., related to the use and end-of-life treatment of sold goods and services).
Examples of scope 3 emissions include:
- Production of purchased goods: Emissions from third-party manufacturers who produce components or finished goods on behalf of a company.
- Transportation and distribution of purchased goods: Emissions from transporting raw materials to production facilities or moving finished products to retailers or distribution centers, when it is paid for by the reporting company.
- Business travel: Emissions from employee travel for business purposes using vehicles not owned or controlled by the company, such as airplanes, taxis, and rental cars.
- Employee commuting: Emissions from employees traveling to and from work and from working remotely.
- Waste generation in operations: Emissions resulting from the disposal of waste generated in a company’s direct operations.
- Purchased electricity, steam, heating, and cooling for which the company does not report scope 2 emissions: This might include operations in facilities rented by the reporting company where the landlord controls the utility contracts.
- Use of sold products: Emissions generated during the use of a company's product by its customers. For example, emissions from using a washing machine, operating a vehicle, or burning fuel.
- End-of-life treatment of sold products: Emissions from the disposal, recycling, or other end-of-life processes for products once they are no longer usable.
- Transportation and distribution of sold products: Emissions from transporting finished products to retailers or to the end customer, when it is paid for by the customer. Leased assets and franchises: Emissions from the operation of assets owned by the company but leased out and operated by others.
- Investments: Emissions from the operations of organizations in which a parent company has an ownership interest but no operational or financial control.
Why is Scope 3 important?
Scope 3 emissions often represent the largest portion of a company's carbon footprint. For example, these emissions make up over three-quarters of Amazon’s total emissions. Addressing these emissions is crucial for a holistic approach to sustainability and for meeting global carbon reduction targets, and stakeholders are increasingly aware that real corporate climate action depends on the reduction and reporting of scope 3 emissions.
Why can Scope 3 be difficult to manage?
Given that it encompasses all indirect emissions not covered by scope 2, collecting data and accurately reporting scope 3 can be challenging, because it results from emission sources beyond your direct control. For instance, scope 3 involves all emissions from suppliers and investments — which means there are many variables. Collecting the necessary data is often a very manual exercise, requiring extensive collaboration with various external entities. Having one source of truth and a system that engages suppliers and portfolio companies greatly eases this pain point.
Is measuring Scope 3 emissions considered double counting?
Technically, yes, but it is not an issue when the double counting represents overlap across the value chain. While some emissions might appear both in a company’s scope 1 or 2 and another company's scope 3, it's not a concern, because it reflects the shared responsibility of emissions in the value chain. In addition, the purpose of corporate emissions reporting is not to create an accurate inventory of all the emissions throughout society, for which double counting would present a concern. Rather corporate emissions reporting gives investors and other stakeholders a view into the reporting company’s climate-related transition risks and opportunities. For that purpose, several companies might face risks and opportunities related to the same emissions and should report on those emissions.
Which companies report Scope 3?
Many leading global companies report scope 3 emissions, especially those committed to the Science Based Targets initiative or other sustainability accords. In 2023, roughly 23,000 businesses — representing $67T USD in market capitalization — disclosed their environmental performance to the CDP — and 42% of them shared scope 3 data. Companies leading the charge on scope 3 reporting include tech giants like Apple and Microsoft, and consumer goods companies like Unilever.
Do more with Scope 3 software
Measuring and managing scope 3 emissions is essential for any business committed to mitigating climate change — and staying competitive in today’s increasingly climate-aware market. With the variety of comprehensive software solutions available, businesses are better equipped than ever to track, report, and ultimately reduce their entire carbon footprint. As we move towards a more sustainable future, leveraging these tools will be paramount in ensuring both business success and the well-being of our planet.