A new heuristic framework for estimating indirect (Scope 3) emissions of large organizations

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.