Greenhouse gas emissions reporting: Scope 3 Group 3 - research

4 Recommendations

Based on the analysis presented above, the following changes to reporting requirements and guidance are recommended.

4.1 Activities to support GHG emissions reporting

The following recommendations relate to the overarching need for organisations to define their organisational boundary and produce materiality assessments, as a prerequisite for understanding which sources of emissions should be reported.

• All public bodies should formally define their organisational boundary and be encouraged to undertake a materiality assessment in line with the GHG Protocol (see Section 3.5) within the next 1-2 years, and thereafter at intervals when there is a significant change to the organisational structure, or at maximum every 5 years. The decision to include activities with Scope 3 Group 3 emissions in the PBCCDRs should be made by individual public bodies based on the outcome of an up to date materiality assessment.
• It is recommended that Scottish Government introduce questions into the PBCCDR form on how public bodies have defined their organisational boundary and whether they have undertaken a materiality assessment (including the date of the most recent and next planned materiality assessment) during the next amendment to the Reporting Order.
• To ensure more consistent and complete GHG reporting, it may be beneficial to signpost to existing guidance on materiality assessments^[22] and GHG Protocol Scope 3 calculation guidance^[23] as it was not clear from the interviews how much awareness already exists. Specific training or other support on this topic (e.g. workshops or more detailed SSN guidance) would also potentially be beneficial, taking into account the resource limitations of public bodies. Regarding materiality assessments in particular, the GHG Protocol and UK Government guidance are not prescriptive about the approach that should be taken; although there are more detailed guides available^[24], it may be beneficial to provide simple, pragmatic guidance for public bodies.

4.2 Potentially significant Scope 3 Group 3 activities

Based on the analysis presented in this report, the following Scope 3 Group 3 activities may be significant for certain public bodies. They should be highlighted as important examples within reporting guidance and, where relevant, public bodies should be encouraged to give these attention within their materiality assessments. However, they are not considered to require changes to statutory reporting requirements, as the outcomes of materiality assessments will be unique to each organisation.

• Scope 3 emissions from the use and end-of-life processing of inhalers distributed by public bodies are likely to be material. Emissions estimates should include the total amount of propellant, including the use phase and end-of-life treatment, although it is not necessary to differentiate between these in reporting. It is likely that NHS boards would be able to report emissions from the use phase of inhalers in the short term as data are available centrally on the distribution of inhalers.
• Public bodies selling a large volume of timber products present a unique case in terms of GHG emissions reporting. Downstream emissions (Categories 9, 10, 11 and 12) from sold timber should be considered as part of a materiality assessment in the short term. If emissions are found to be material, any reporting should take into account the new GHG Protocol Land and Removals Sector Standard or equivalent future guidance. However, it is also important to consider that, although the emissions from the sale of timber may be large relative to the other Scope 1, 2 and 3 emissions for a specific organisation, locally produced timber can potentially contribute to wider decarbonisation goals within the Scottish and UK contexts. For example, advice from the CCC supports the use of biomass in construction^[25] and if this were to be sourced from elsewhere, there is a risk of ‘carbon leakage’. It is a particularly complex topic area which therefore merits a holistic, systems thinking viewpoint. This would potentially require separate, more detailed analysis which may require additional support or resources to carry out, beyond those used in annual PBCCDR compilation.
• Educational institutions should use low-effort calculation approaches to evaluate whether student relocation and commuting is material, and based on the outcome, make a decision on whether to include this in reporting. Some are already reporting these emissions, and there is an existing tool to facilitate calculations, so it is assumed that the level of effort is feasible for organisations to report, where relevant. Note that colleges and universities are “strongly encouraged to include student travel within their reporting boundary” in the public bodies climate change duties statutory guidance.^[26] A materiality assessment should be undertaken in the short term and significant emissions should be reported as soon as data availability and resources allow.

4.3 Other activities that may be relevant under Scope 3 Group 3

Other activities relating to Scope 3 Group 3 may be relevant for certain public bodies. They may or may not be significant, depending on individual materiality assessments undertaken by public bodies. These are summarised below; however, as in Section 4.2, they are not considered to require changes to statutory reporting requirements.

• Public bodies that distribute medical equipment should first evaluate the total amount of goods that they purchase (i.e. upstream emissions), then consider the proportion that is distributed to patients for use and disposal at home (i.e. downstream emissions^[27]) and decide whether to include this in reporting. Note that the availability of data, and therefore the level of effort, value for money and recommended timescales for reporting may depend on the outcome of a separate study which is examining upstream Scope 3 ‘Group 2’ emissions and the timescales should therefore align.
• Public bodies offering a large component of hybrid or online courses should use a low-effort calculation approach to evaluate, as part of their materiality assessment, whether the emissions from electricity use are likely to be material, and based on the outcome, make a decision on whether to include this in reporting. Timescales: Subject to materiality assessment.
• Public bodies that operate gift shops or other retail services should use a low-effort calculation approach to evaluate, as part of their materiality assessment, whether the emissions from downstream transportation and distribution of sold products are likely to be material, and based on the outcome, make a decision on whether to include this in reporting.
• Where relevant, the materiality of emissions from any other sold products will need to be considered by public bodies on a case-by-case basis, as part of their materiality assessment.

Finally, note that for some GHG-emitting activities, it may be preferable to wait to introduce reporting requirements until after the GHG Protocol update is published. This is particularly relevant to emissions from waste where there are wider ongoing changes which could affect reporting, and emissions or removals from biogenic carbon stored in timber products.