Scope 3 Is On Its Way
Scope 3 Is Coming!
And it’s coming with audits!
It’s 2025 and Scope 3 is already the reality for the largest companies. All companies larger than 500 employees need to disclose their Scope 3 impact for financial year 2024. As the year inches forward, this becomes increasingly important for companies in the next layer, those with 250+ employees and €50M+ turnover who will be the next frontier in the scope 3 march.
While the largest companies have the resources and can mobilise teams to take on new and complex regulation, companies with less than 500 employees, each resource counts and moving people from revenue generation to solve complex regulatory projects is often infeasible in today’s environment. Especially when results need to be turned around for the 2025 financial year.
Of course, on top of just solving the scope 3 problem, another issue lies. Not only do we need to calculate these numbers, we also need to get it right.
Scope 3 is different to the previous scope 1 and 2 challenges because by designed it’s based around one thing: Data you don’t already have. It’s difficult enough to calculate the carbon cost of your own internal processes and products but when it comes to scope 3, the whole supply chain suddenly becomes part of the equation.
While the initial challenge will be in getting the numbers calculated, much of this will be done with estimates, or high level data apportioned down to relevant scope 3 categories through an estimation methodology. However, when it comes to scope 3, high level estimations are not going to cut it.
Initially, auditing will be limited, however this will quickly begin to ramp up and while some level of modelling and estimation is acceptable, the tolerance for an entire scope 3 methodology based on it will start to wear thin. Instead, you need real world data.
When it comes to regulation, the penalties for getting it wrong are steep. Regulatory fines are far from ideal but over time these are paid off. What is more concerning is the reputational damage and loss of investor confidence that non-compliance creates. The pressure is there to get it right.
But how do we get it right when the problem is so complex?
Scope 3 data is a nightmare. Calculating just the carbon cost of shipping a single barrel of oil around the world requires combining tens of datasets, all with differing formats and inconsistent levels of transparency. Combining all of this data in house is a ginormous lift, taking expensive data science capacity away from revenue generation. On top of this, most companies don’t have the supplier engagement, methodologies and integrations to even begin to take on such a herculean task.
That’s where we come in.
Shipping routes through world maritime chokepoints as provided by the U.S. Energy Information Administration.
The 411 Data Oil Scope 3 Data Product tracks oil from the cradle to the grave, or the extraction point to fractionation. We know where each barrel comes from, the ship it sails out on, the country that imports it and the refinery that converts it.
We know the distance travelled, the fuel used in the refinery and the carbon cost of every step along the way. All of this is combined into one easy to onboard and ready to use carbon product that fits your internal standards so you don’t have to onboard yet another set of data.
We are not the first to solve this problem, but we are the first ones to do it right. Current solutions assume uniformity in the distance travelled by every ship. We can tell you every stop the oil tanker makes.
Current solutions assume standardised refining costs. We can tell you how each one differs.
With extraction methodology based on Stanford’s own models, the 411 Data Scope 3 Oil Product is the only product on the market with the real world data needed to calculate your Scope 3 carbon cost in a way that stands up to regulatory scrutiny.
Did you know that even on years when Venezuela and Saudi Arabia export a similar quantity of oil into the U.S., the carbon cost of shipping that oil is much higher for Saudi Arabia due to the significantly longer distance and the route travelled?
Like all of our products, our oil data is quality checked and standardised, so that only one onboarding is required. We can also combine this with complementary layers of data ranging from ship information, transport routes or fuel profiles of refineries to produce a data product that suits your unique needs, whether for Scope 3 Requirements or beyond.
Keen to find out more? Book a demo and we’ll give you all the details.