Why climate leaders can sometimes look like climate laggards when measuring Scope 3 emissions
In researching companies for inclusion in the HIP Climate Solutions Portfolio, an analysis of “Scope 3” emissions revealed that the numbers don’t always tell the full story.
Greenhouse gas accounting divides emissions into three categories. Scope 1 emissions come directly from company operations. Scope 2 emissions derive from purchased energy. Scope 3 emissions span the entire product value chain — including upstream supplier emissions and downstream user emissions throughout a product’s lifecycle.
These Scope 3 emissions can constitute a substantial portion of a company’s carbon footprint and are notoriously difficult to calculate, with varying methodologies in use. Understanding how companies measure emissions proves critical when assessing true climate impact.
The analysis uses Swiss electrification company ABB as a case study — a company that initially looks like a climate laggard due to significant Scope 3 emissions, but reveals itself as tackling dirty industrial sectors to help others cut emissions at scale.
