What are Scope 3 emissions and how can your business reduce them?

The impact of IT on the planet is widely known, from cooling placing pressure on water-scarce regions to data-intense workloads consuming vast quantities of electricity. We also know that data center operations can generate high levels of carbon dioxide and other greenhouse gas emissions.

However, data centers’ carbon footprint is not limited to the emissions produced while operating. In fact, it covers the entire supply chain of its infrastructure components. This is where Scope 3 emissions come in.

In this article, we’ll explain what Scope 3 emissions are, what they mean for your business IT infrastructure, and how to keep them under control.

What are Scope 3 emissions?

Scope 3 carbon emissions refer to all the indirect greenhouse gas (GHG) emissions generated in a business’s upstream and downstream activities.

In the case of data centers, this includes the supply chain of its IT hardware, equipment lifecycles, and even the production and transport of building materials.

This table briefly explains the difference between Scope 1, 2, and 3 carbon emissions:

GHG emissions category	What it covers	Data center example
Scope 1	Direct emissions from company-owned or controlled sources.	Diesel back-up generators that data centers often use if their primary power source fails.
Scope 2	Indirect emissions from the generation of purchased energy. Companies are responsible for these emissions through their power usage.	Powering servers, networking, storage, and cooling technologies using electricity generated by utility providers.
Scope 3	Indirect emissions produced throughout the supply chain of an enterprise.	Manufacturing, transport, and disposal of IT hardware.

What are the different kinds of Scope 3 emissions?

According to the GHG Protocol, Scope 3 emissions can be split into fifteen categories:

• Purchased goods and services
• Capital goods
• Fuel- and energy-related activities not included in Scopes 1 and 2
• Upstream transportation and distribution
• Waste generated in operations
• Business travel
• Employee commuting
• Upstream leased assets
• Downstream transportation and distribution
• Processing of sold products
• Use of sold products
• EOL treatment of sold products
• Downstream leased assets
• Franchises
• Investments

What is the definition of a carbon footprint?

“Carbon footprint” is a term used to describe the total amount of GHG gases generated by the actions of an entity, whether this is a business, industry or facility.

These actions can cause emissions directly or indirectly. A large carbon footprint indicates high total emissions, and therefore a greater contribution to climate change.

 

What causes Scope 3 emissions in IT?

In the IT hardware supply chain, Scope 3 emissions cover the generation of greenhouse gases by processes such as:

• Mining for raw materials, including silica, gold, silver, and copper
• Transporting and processing the raw materials
• Manufacturing the hardware products
• Logistics
• Disposal

Many of these emissions are often referred to as the embodied carbon of an IT asset. Embodied carbon emissions are those associated with the asset’s production and lifecycle before deployment and use.

However, Scope 3 emissions can also include downstream impacts, such as emissions from disposal.

Why does your IT’s carbon footprint matter?

We are increasingly aware, both in society and across industries, of the environmental damage caused by our actions, whether direct or indirect.

One of the primary ways we measure our contribution to climate change is through our carbon footprint.

Let’s dig into some of the key reasons why understanding and controlling your carbon footprint is becoming critical for businesses.

Environmental responsibility

GHG emissions drive climate change by trapping heat in the atmosphere. This means global temperatures are rising, leading to measurable impacts that are already occurring in real time, such as:

• Rising sea levels
• Melting ice caps
• Ecosystem disruption
• Increased water scarcity

Through decarbonization, organizations directly help to minimize their damage to the planet.

Compliance

Governments and industries across the world are implementing measures such as mandatory emissions reporting for businesses. Some notable examples of such regulations include:

Region/country	Regulation	What does it require?
Europe	Corporate Sustainability Reporting Directive (CSRD)	Large companies must disclose detailed ESG data under a standardized framework. This includes Scope 1, 2, and often Scope 3 emissions.
Brazil	National Policy on Climate Change (Política Nacional sobre Mudança do Clima)	Businesses must align with national carbon emissions reduction targets through sector-specific plans, including emissions monitoring and, in some cases, reporting.
South Africa	Carbon Tax Act	Businesses emitting above certain thresholds must report their Scope 1 emissions and pay a tax per ton of CO₂e, as an incentive to reduce their carbon footprint.
UK	Streamlined Energy and Carbon Reporting (SECR)	Large businesses and listed companies must disclose their annual power usage, GHG emissions, and steps towards energy efficiency in their annual reports.

If a company fails to comply with these regulations, it could face significant financial penalties and legal action.

Reputation/competitive edge

In recent years, enterprises which make concerted efforts to improve their sustainability ratings are becoming increasingly popular amongst consumers. Demonstrating environmental responsibility can also reassure stakeholders, giving them confidence that their investments are compliant with regulations and aligned with long-term, sustainable value.

In 2023, a study conducted by the consultant McKinsey found that “financially successful companies that integrate environmental, social, and corporate governance (ESG) priorities into their growth strategies outperform their peers”, as long as they also maintained strong growth and profitability.

How to calculate your carbon footprint

The GHG Protocol outlines several methods to measure your Scope 3 emissions. The principal strategies proposed are:

Approach	What it includes
Average-data	Estimating emissions by multiplying data on the mass, volume, or other relevant activity metrics of assets or services by industry-average emission factors.
Activity-based	Measures the actual, real-life data on the mass, energy usage or relevant activity metric and multiplies it by specific emission factors that reflect the processes or activities involved.
Supplier-specific	Collecting LCA information, emissions impact analyses, and product-level details from suppliers.
Spend-based	Estimating emissions for assets and services purchased by multiplying their economic values by the relevant industry average emission factor.

Key takeaway: LCA = Lifecycle Assessment

The activity-based method is the most accurate model, using specific calculations rather than estimations. However, it is also the most technically-difficult to implement.

Leverage a carbon footprint calculator

Evernex’s data-backed carbon savings calculator allows businesses to see how much carbon they can save by extending the lifecycles of their servers, networking assets and storage. They can adjust the number of each asset, as well as the years they are planning to extend their lifecycles by, to reflect their business’s real situation.

This expert-designed tool helps businesses reduce their environmental impact with real-time answers and actionable solutions.

Try Evernex’s carbon footprint calculator

What is the GHG Protocol?

The GHG Protocol is a global standard providing standardized frameworks to “measure and manage greenhouse gas emissions from private and public sector operations, value chains and mitigation actions”, with the goal of accelerating emissions reductions to meet global warming limits.

These frameworks allow businesses to accurately measure and report their Scope 3 emissions data in several ways.

Why are Scope 3 emissions difficult to track?

Businesses have considerable visibility over their Scope 1 and 2 emissions, measuring factors such as their power usage and fuel invoices.

However, Scope 3 is harder to track. This is because businesses do not have direct control over their suppliers’ sourcing practices and logistics. This means businesses have to be more proactive when gathering and measuring data for Scope 3 emissions.

How to reduce your business’s Scope 3 emissions

Measuring and reporting your business’s carbon emissions is just part of the battle. Knowing that most IT hardware-related Scope 3 emissions come from manufacturing, logistics and disposal, here are some key strategies businesses can use to control their Scope 3 carbon generation:

IT lifecycle extension

As we know, manufacturing IT hardware can be an important source of carbon emissions, embodied carbon (Scope 3) is especially critical, often accounting for over 80% of the total carbon footprint of their services. Frequent refreshes drive manufacturing demand, while also causing downstream emissions when disposing of unwanted assets.

Keeping enterprise data center hardware in robust working condition through expert maintenance can extend its useful life by several years, avoiding the embodied carbon of new hardware.

Extending the lifecycle of one server by just two years can save up to 1566 kgCO₂e, equivalent to a return flight from Paris to New York.

Functional hardware which no longer meets requirements in critical systems can also be reassigned to lower-priority systems, maximizing its useful life and the return on your enterprise’s economic investment.

 

Proper disposal of end-of-life hardware

Disposing of obsolete hardware can also contribute to Scope 3 carbon emissions through:

• Transport
• Processing
• Incineration
• Landfilling

Circular economy strategies such as recycling and resale keep usable components in the market for longer, delaying these processes and avoiding the emissions they generate.

When IT equipment reaches its true end of life, businesses can still keep their emissions to a minimum through responsible IT asset disposal practices. These prioritize IT recycling and eliminate, where possible, non-recyclable materials without the use of landfill or incineration.

While recycling processes can produce carbon dioxide and other GHG, the quantities are far lower than those generated by traditional disposal methods.

Green transportation and packaging

Traditional transport, fueled by diesel or petrol, is a considerable source of both greenhouse gases and particulates. Switching to electric vehicles or those powered by hydrogen fuel cells avoids the pollution caused by fossil fuels.

If investing in new vehicles presents too great an investment, optimizing routes and workloads can make transportation more efficient. This means less time in transit and therefore less combustion. Machine learning tools can assist in logistics optimization.

Businesses can also take steps to control their carbon footprint by using recycled (and recyclable) or non-plastic packaging. While recycling can cause some emissions, this is far outweighed by the pollution caused by the raw materials sourcing and manufacturing of petrol-based plastic packaging.

TIP: Always verify data provided by suppliers and leverage data analytics to optimize logistics.

Evernex: Optimizing your IT’s sustainability

A leading provider of enterprise IT services and refurbished hardware components, Evernex keeps sustainability at the heart of its operations.

At Evernex, we help our clients optimize their IT costs and reduce their carbon footprint. This means incorporating circular practices at every step of the supply chain, both upstream and downstream. Some of the sustainable services we offer include:

• IT lifecycle management and extension
• Certified ITAD – 0% incineration, 0% landfill
• Low-carbon transport
• Recycled cardboard packaging
• Buy-back programs
• Component refurbishment

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