FAQ: Scope 3 emissions in business

According to the Greenhouse Gas Protocol (GHG Protocol), greenhouse gas emissions are divided into three categories:

• Scope 1: Direct emissions that occur within a company’s own boundaries and are caused and controlled by it. An example would be the company-owned fleet or other combustion facilities (e.g., a gas heating system for the company’s building).
  
  
• Scope 2: Indirect emissions from purchased energy that is generated outside the company’s boundaries but consumed by it. These emissions, while not directly produced by the company, are the direct result of its own energy consumption decisions – for example, the electricity it uses.
  
  
• Scope 3: All other indirect emissions that occur outside a company’s own boundaries but are generated as part of its business activities along the value chain with business partners. Examples include the production and transportation of purchased and traded products, business travel, or the commute of employees.
  
  

This classification serves to determine, make visible, and control emissions: Every single gram of CO₂ that falls under Scope 3 for Port International is a direct Scope 1 emission for another company in our value chain. Thus, all emitted greenhouse gases can be precisely located and clearly attributed. While a company has full decision-making power over its own sources of emissions, emissions occurring at business partners can only be reduced in cooperation – the leverage to effect avoidance and reduction measures for indirect emissions as a company is therefore much smaller.

Especially food companies like Port International would miss the point if they merely looked at Scope 1 and Scope 2 emissions, considering that in 2023, Scope 3 emissions accounted for a total of 99.84 % of our company’s footprint. If we were to assess our company’s footprint only looking at ourselves (Scope 1 and 2), we would be considering only 1.16% of the total emissions! At the same time, the potential for measures that bring about effective improvements is particularly high in Scope 3. Given this overwhelming share in our total emissions, it’s clear that an effective climate protection strategy that recognizes and exploits all potentials can only be pursued by considering all three Scopes.

Scope 3 emissions present a particular challenge as they are emitted within the boundaries of another company and thus cannot be directly controlled by one’s own company. They arise along the entire value chain and are often difficult to capture and influence. The reasons for this are manifold:

• Complexity of supply chains: Companies often have a multitude of suppliers and partners whose emissions are difficult to capture.
• Data availability: Capturing Scope 3 emissions requires collaboration with suppliers and partners who may not be able to provide all the necessary data.
• Limited influence: Companies often have only limited options to directly influence the emissions of their suppliers and partners.

For food companies, there’s an additional challenge: The production of food causes greenhouse gas emissions for biological reasons, which are virtually impossible to completely avoid. This applies above all to the production of animal products  because through their digestion, animals produce particularly climate-damaging methane emissions. But the cultivation of fruits and vegetables, too, releases CO₂ emissions, and nitrous oxide emissions can arise through microbiological processes.

A completely climate-neutral cultivation of food may be virtually impossible, but there are huge emission-saving potentials that we at Port International want to implement in cooperation with our partners. A wide range of societal possibilities and strategies for reducing the environmental impact of food has been defined, for example, by the EAT-Lancet Commission in the form of the so-called “Planetary Health Diet”[1]. Our product portfolio already aligns with the Planetary Health Diet, thus contributing to achieving the European climate goals in the agricultural sector.

[1] https://www.bzfe.de/nachhaltiger-konsum/lagern-kochen-essen-teilen/planetary-health-diet/

Despite the challenges, there are various sector-independent approaches to reduce Scope 3 emissions:

• Collaboration with suppliers and partners: Companies can support suppliers and partners in capturing and reducing their own emissions.
• Sustainable procurement: By selecting suppliers and products with lower emissions, companies can reduce their Scope 3 emissions.
• Optimization of transport routes: Efficient logistics and the use of low-emission means of transport can contribute to the reduction of Scope 3 emissions.
• Promotion of sustainable mobility: Companies can support their employees in switching to sustainable modes of transportation, thus reducing emissions from commuter traffic and business travel.
  
  

As a company, we have identified further areas of action for ourselves to effectively lower the climate goals of our sector:

• Reduction of food losses along the supply chain: Together with our upstream and downstream business partners, we are drastically reducing our food losses.
• Optimization of packaging: We are constantly looking for solutions to reduce or reuse our transport and product packaging.
• Regenerative farming practices: We are focusing on emissions at the agricultural level to explore the most CO₂-efficient farming practices.