Lets Breakdown Emissions Reporting Types to Explain - What are Upstream and Downstream?

Recap On The Basics

ESG or Environmental, Social and Governance are afar reaching set of factors and metrics used to assess an organisation's business practices and performance, as well as consider the risks and opportunities relating to a given company or industry.

Give Me Some Examples

Environment

As a result of the companies services, products and operation

Consumption and efficiency of energy usage
Carbon footprint and Emission of greenhouse gases
Management and disposal of waste
Pollution and natural resource depletion

Social

Treatment of a broad range of people including employees, customers, suppliers and community
Measures include fair rates of pay, diversity and inclusion metrics
Fair treatment of suppliers
Customer satisfaction levels
Health and safety and community relations

Governance

Risk management
Transparency and business integrity
Ethical practices
Leadership & management
Regulatory compliance
Risk management

When it comes to emissions, things start to get more complicated. We'll explain

Scope 1

These are emitted directly by your organisation – though operating the things that it owns or controls. For example, running machinery to make products, driving vehicles, or just heating buildings and powering computers.

Scope 2

These are emitted as a result of the energy that an organisation buys, and then uses.

Scope 3

These are also indirect emissions as well as scope 2, however relate to bought in goods and services rather than energy, effectively everything else that goes into what your organisation consumes in its services, products or operations. Typically this is the largest emissions area, and at the same time also the hardest to measure

We are not done there, Scope 3 then goes a step further

As well as Scope 3 considering the bought in goods and services from suppliers to your organisation (called upstream emissions). It also captures the emissions that result from the use, and disposal of your businesses' products or services (called downstream emissions).

Whats the big deal?

Because it captures the entire supply chain and life cycle of the products and services, as well as being the hardest to measure and track, it is also the hardest to influence.

Upstream emissions examples

HTML Table Generator

Type	Description
Purchased Goods and Services	Bought in goods and services from suppliers
Capital purchases	Bought in capital equipment such as equipment, vehicles and other assets
Transport & Logistics	Transport and distribution to get bought in goods, services and capital items
Leased Assets	Any assets leased by the organisation that are not captured elsewhere
Employee Commuting	Movement of employees from their home to the workplace
Business Travel	Movement of employees on business-related trips

Downstream emissions examples

HTML Table Generator

Type	Description
Processing of Sold Products	Emissions from future processing of products sold by the company
Use of Sold Products	Emissions from the use of the sold products over their expected lifetime
End-of-Life Treatment of Sold Products	Emissions and waste disposal of sold assets, at the their expected end of life

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The obvious challenge that this brings is, if an increasing number of organisations are required to report on their emissions, and they must consider the full supply chain and life cycle, then will this not led to double counting of emissions? The answer is probably. Especially while this is still being worked out.

This highlights the need for collaboration between you and your stakeholders as an important part of developing initiatives. This in particular highlights that this is clearly not black and white. The answer will in some way be wrong, its just a matter of how wrong. This may be uncomfortable for some.

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Want to learn more about how you can assess, capture and report on your company emissions? See our article here on getting started.

Looking for a Solution

If you would like to see how Viridian with Pigment can support you in this critical area, head here