Understanding and Categorizing Scope 1, 2, and 3 Emissions for Informed Sustainability in the Food Industry
Companies in the Food Industry have complex supply chains and their greenhouse gas emissions can be significant not just in manufacturing, but across the entire lifecycle of their products. Here’s a food tailored breakdown:
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Scope 1: Direct Emissions - These emissions are from sources owned or controlled by the company.
Examples relevant to the CPG/FMCG sector might include:
- Emissions from on-site fossil fuel combustion (e.g., natural gas boilers in a food processing plant).
- Emissions from company-owned or controlled transportation (e.g., trucks delivering products from the company's distribution centers to retail locations).
- Refrigerant gas leaks from cooling systems.
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Scope 2: Indirect Emissions from Energy Purchases - These emissions result from the generation of purchased utilities consumed by the company.
Examples for the CPG/FMCG sector might include:
- Electricity used to power facilities such as manufacturing/processing plants, offices, and warehouses.
- Purchased steam, heating, and cooling for use in manufacturing and processing.
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Scope 3: Other Indirect Emissions - These emissions are a consequence of the company's operations but occur from sources not owned or controlled by the company. This category is further divided into upstream and downstream emissions.
3.1. Upstream Activities:
- Agriculture: Emissions from farming activities for ingredients sourced, including land use changes, and methane emissions from livestock.
- Production and Transportation of Purchased Goods: Emissions from the production of raw materials, food components, and packaging materials, and their transportation to the company’s facilities.
- Business Travel: Emissions from flights, car travel, etc., for business operations.
- Employee Commuting: Emissions from employees traveling to and from work.
- Waste Generated in Operations: Emissions from the disposal of waste generated in the manufacturing process, not including product waste.
3.2. Downstream Activities:
- Distribution and Retail: Emissions from the transportation of finished products to distribution centers and retailers.
- Product Use: Emissions generated by the cooking, refrigeration, or preparation of food products by the consumer.
- Product Disposal: Emissions from waste handling of product packaging, including decomposing organic waste (if sent to landfill) and emissions from incineration.
- Investments and Franchises: Emissions from investments and franchises under the company’s brand.
For CPG/FMCG companies in the food industry, Scope 3 emissions, especially those associated with upstream (supply chain) activities, can be particularly significant due to the energy-intensive nature of agriculture, the potential for methane emissions in animal sourcing, and the complexities of packaging. Downstream emissions are also crucial, especially considering the end-of-life emissions of food and packaging waste.