Sixty corporations began measuring emissions, named Scope 3, from products and supply chains.

What are scope 3 emissions?

Scope 3 emissions are activities within a company’s supply chain (manufacturing, transportation, etc.) which aren’t owned by the company. Scope 3 emissions include other impacts from a consumer using the product.

Why are scope 3 emissions vital to supply chain reporting?

Researchers at Carnegie Mellon University said in a 2008 report that two-thirds of U.S. industries would overlook 75 percent of GHG emissions if they neglect reporting on Scope 3 emissions.

WRI says that although many companies measure the emissions from their own operations and electricity use, the Scope 3 Standard will, for the first time, allow companies to look at the impact of their corporate value chains, including outsourced activities, supplier manufacturing, and the use of the products they sell. Road testers of the Product Standard will measure the climate change impact of products ranging from magazines, food and jeans to computers, wind turbines and steel. Scope 3 emissions allows a company to identify up and down stream cost saving opportunities and also helps the company decrease its risk exposure due to future spikes in the price of fossil fuels.

Who is participating in the testing?

Sixty corporations are now measuring the greenhouse gas (GHG) emissions of their products and supply chains by testing a new global framework that is part of the Greenhouse Gas Protocol Initiative. Companies participating in the test drive represent 17 countries and more than 20 sectors, including Coca-Cola, Ford Motor, Kraft Foods, Lenovo and Levi Strauss.

How can you measure the life-cycle of a product?

Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), the two new GHG Protocol standards, the Product Life Cycle Accounting and Reporting Standard (PDF) and the Scope 3 (Corporate Value Chain) Accounting and Reporting Standard, provide methods to account for emissions associated with individual products across their life-cycles and of corporations across their value chains.

Why develop standards now?

The testing process is expected to provide real-world feedback to ensure the standards can be implemented by companies and organizations in a variety of sectors, sizes, and geographic areas around the world.

The draft standards were developed over the last year through a global, collaborative multi-stakeholder process, with participation from over 1,000 volunteer representatives from industry, government, academia, and non-governmental organizations. The road testing process will provide real-world feedback to ensure the standards can be practically implemented by companies and organizations from a variety of sectors, sizes, and geographic areas around the world. The final standards are scheduled to be published in December 2010.

Are the companies themselves asking for regulatory standards?

Jonathan Lash, president of WRI, said, “We are encouraged by the overwhelming response from the private sector seeking to road test the new standards. There were more than 120 applications across a broad array of sectors and regions worldwide. The road testing will provide critical input in ensuring that the standards generate credible and meaningful data for business and government decision makers, while considering the practical challenges that businesses and programs will face during implementation.”

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