Aligning Decarbonization and Circularity to Address Scope 3 Emissions

In North America, circularity is rapidly following “Net Zero” as an important sustainability pillar that more companies will need to adapt to be credibly viewed as responsible environmental leaders.

Too often, carbon and waste are handled separately at an organization — even competing for resources, while being operationalized independently — but understanding their interconnectedness creates an opportunity for relevant stakeholders to work together and support the overall decarbonization strategy.

In particular, circularity can bring synergistic benefits to addressing Scope 3 emissions, which is often the most difficult part of a company’s footprint to address. However, both topics are extremely challenging to execute and measure.

Being able to quantify the benefits of circularity for your company is critical — especially to validate that circularity decisions have positive effects on any emissions reduction efforts.

Overlap Between Circularity and Scope 3

Circularity represents a conceptual shift from a linear Take, Make, Waste economic model to a circular Refuse, Reduce, Redesign, Reuse, Repurpose approach and, as a last resort, Recycle.

Decarbonization follows an analogous framework of shifting from fossil-fuel-based energy to renewable forms, including the capture of waste energy. As the scopes of an entity’s footprint expand from where it has operational control (Scopes 1 and 2) to where it does not (Scope 3) — which often increases the footprint by 3-10x — companies need to employ all the levers they can.

But both circularity and Scope 3 supply chain decarbonization require a fundamental understanding of where material and energy resources are coming from and the journey they take. Each initiative can inform the other with quality data about where the waste and carbon outputs are high.

Where to start?

Tackling circularity or Scope 3 can feel daunting — let alone taking a combined approach. An important first step is to use available data to diagnose whether there is value in employing circularity as part of a set of decarbonization levers. This could be in the form of on-site and virtual waste audits, and spend-based Scope 3 inventory — which are typical starting points for organizations embarking on either journey.

The Greenhouse Gas Protocol has defined 15 categories of Scope 3 emissions. Circularity strategies typically fall into procurement, design, production, and operations within a business and can be correlated to one or more of those Scope 3 categories (see Figure below). Using waste audits and greenhouse gas (GHG) footprint data can provide initial guidance for the potential opportunity circularity could have (or potential negative impacts to be aware of in executing an existing circularity strategy).

Interdependencies Between Circularity and Scope 3

Practical examples of where waste audits may uncover circular opportunities that reduce Scope 3 emissions may include identifying:

• Waste materials that could be reused on site. This cuts the material sent to and disposed of in landfills, reducing Scope 3 emissions in Categories 5, 9, and 12.
• Materials are presently being sent to landfills that could instead be diverted to recycling facilities. This addresses Scope 3 emissions Category 12 and potentially 9, depending on the location of the recycling facility.
• Opportunities to work with suppliers to cut packaging on the goods and materials they ship to you. This cuts waste and may increase the volumes of valuable goods they can place on a single shipment, thereby reducing Scope 3 emissions in Categories 4 and 12.
• Product redesign opportunities that maximize material efficiency and reduce waste generation. This may result in purchasing fewer materials and generating less process waste, thereby cutting Scope 3 emissions in Categories 1, 4, 5, 9, and 12.
• New circular business models promoting product longevity and added-value services (leasing, repairing, upcycling, etc.)
  

Circularity and Scope 3 emissions are two topics companies typically struggle with. Paradoxically, our early work has found that addressing both together actually reduces complexity and leads to better results. At ENGIE Impact, we have teams to perform those on-site audits, develop high-quality GHG inventories, and provide the strategic analysis needed to look across these initiatives for maximum value and create innovative products and services.

The authors would like to thank Jess Brooks, Camille Cury, and Tyler Marcus for their contributions to this article.