Abstract

Large businesses and organizations are pledging voluntary actions for climate change mitigation. Alongside such pledges, government regulations that mandate climate-related disclosures for large corporations are also emerging. Both for compliance with such mandates and effective voluntary action, organizations need reliable information on their indirect emissions, which refers to emissions arising upstream and downstream to their own operations, and which, for many types of industries (such as education, finance, health care, hospitality and retail) can be several-times their own or direct emissions. However, the best approach to estimating indirect emissions requires conducting a life cycle assessment (LCA) for a large number (potentially thousands) of different products and services, which is costly. To overcome this, we present a heuristic approach that combines insights derived from LCA and data analytic techniques to identify a relatively small number of products that might account for a large share of indirect emissions, specifically Scope 3 emissions. We apply our approach to a dataset comprising over 25,000 products spanning 105 different product categories, purchased by a large tertiary-care hospital and show that this can help organizations prioritize actions aimed at reducing their indirect emissions.

Significance statement

For many different types of industries, the so-called Scope 3 emissions can account for a substantial share of their overall environmental footprint. Today the widely-used approach to estimating scope 3 emissions involves relying only on information about unit cost of the various products and activities and an average life cycle emissions per dollar for the closest broad industry-sector that each product or activity can be assigned to. The alternative heuristic developed here harnesses both information on cost and physical quantity, which suggests prioritizing a very different set of products for reduction in Scope 3 emissions.