![\"An](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/10\/NAT-Scope-3-Graphic1-Parkinson.png\"\/)
Source: Greenhouse Gas Protocol. Illustration: Shawn Parkinson \/ The Narwhal <\/p>\nThey come from driving a car or taking the bus to the office. Or when employees are given a company-owned smartphone. They can even result from a three-course dinner at a holiday gala \u2014 or that box of doughnuts at a meeting. And for companies that extract fossil fuels, they also come when customers use their products.<\/p>\n
All are examples of the creation of Scope 3 emissions: greenhouse gases that are indirectly produced by a corporation or institution\u2019s supply chain and everyday operations.\u00a0<\/p>\n
Employees\u2019 commutes use fuel in the form of gas or electricity. Every step of manufacturing\u00a0the electronics used at work \u2014 from design to mining to parts fabrication and product assembly \u2014 creates emissions. Greenhouse gases are also created when the food and drink at company events is procured,\u00a0transported and prepared. They\u2019re also produced when Canadian oil and gas is used as fuel, whether in this country or another one.\u00a0<\/p>\n
These emissions will still get into the atmosphere and heat the planet even if oil and gas producers succeed in their ambitious plans to capture and bury the emissions they create when extracting fossil fuels. Yet attempts to get Canadian companies to report them \u2014 even voluntarily \u2014 keep getting delayed.\u00a0<\/p>\n
The term \u201cScope 3 emissions\u201d is technical and bureaucratic. But these emissions, like all greenhouse gases, have real, on-the-ground consequences. The heat-trapping effect of fossil fuel use is driving extreme weather events in Canada and around the world, putting humans, wildlife and ecosystems at risk.<\/p>\n
Here\u2019s how to understand these arm\u2019s-length emissions, and why scientists think it\u2019s important to keep track of them, no matter how far away they are.\u00a0<\/p>\n
What exactly are Scope 3 emissions?<\/p>\n
The goal of the Scope scale is to categorize emissions to help understand where they come from and how to reduce them. Scope 1 are direct emissions, which come from sources owned or controlled by a company and include what\u2019s produced by its facilities and vehicles. Scope 2 are indirect emissions produced by generating the many forms of energy \u2014 electricity, steam, heating and cooling \u2014 households and businesses use day-to-day.<\/p>\n
Scope 3 are the least immediate. They encompass both \u201cupstream\u201d emissions made when a company uses a product or service and \u201cdownstream\u201d emissions made when its own products or services are used.\u00a0<\/p>\n
Source: Greenhouse Gas Protocol. Illustration: Shawn Parkinson \/ The Narwhal <\/p>\n
Sara Hastings-Simon, an associate professor in the department of earth, energy and environment at the University of Calgary, said labelling and, hopefully, tracking these emissions is a way to hold companies responsible for emissions created by the goods and services they are producing and encouraging people to purchase and use. Coined in 2001 and formalized in 2011, the term \u201cScope 3 emissions\u201d considers the ripple effects of a company\u2019s activities on global emissions.\u00a0<\/p>\n
\u201cCompanies have a role, often, in creating the demand for their product,\u201d Hastings-Simon said, which is why she believes they should be held accountable for emissions made all along its supply and use chain.\u00a0<\/p>\n
Scope 3 are not some intangible drop in the pond of global emissions. They are frequently the \u201clargest source\u201d of emissions for companies and represents the \u201cmost significant\u201d opportunity to reduce greenhouse gas globally, according to<\/a> the Greenhouse Gas Protocol, a Washington, D.C.\u2013based organization that creates global standards to measure emissions. Think about the Alberta oilsands<\/a>: yes, mining and upgrading bitumen creates emissions. But the burning of the products \u2014 say, in consumers\u2019 cars \u2014 creates far more of an impact.\u00a0<\/p>\n Scope 3 emissions aren\u2019t just a big deal for the oil and gas industry. The Climate Disclosure Project, a non-profit based in the U.K., estimates that more than 90 per cent of emissions<\/a> from sectors including real estate, financial services, capital goods and mining can be classified as Scope 3.<\/p>\n Canadians in favour of Scope 3 reporting have argued the same. In 2022, the federal NDP stated Scope 3 represent \u201can overwhelming majority\u201d of Canada\u2019s greenhouse gas emissions, in a report from<\/a> the Standing Committee on Natural Resources looking at Canada\u2019s long-debated emissions cap<\/a>.\u00a0<\/p>\n In the report, the NDP said that in 2019, emissions from fossil fuels exported by Canada were 954 million tonnes, while total domestic emissions were just 730 million tonnes.<\/p>\n \u201cTo leave them out of any regulation under a cap would be irresponsible,\u201d the party stated.<\/p>\n What are the criticisms of tracking Scope 3 emissions?\u00a0<\/p>\n Some fossil fuel companies have said making them responsible for Scope 3 emissions could lead to actions that are actually contrary to climate goals.<\/p>\n Companies like ExxonMobil, Shell and BP do disclose Scope 3 emissions across their operations worldwide. For example, Shell reported<\/a> customer emissions from using Shell products in 2024 totaled nearly half a billion tonnes of Scope 3 emissions.\u00a0<\/p>\n But a February 2022 report by environmental academics in Japan<\/a> noted that ExxonMobil argued that reporting Scope 3 could be \u201cmisleading.\u201d The paper cited a 2021 ExxonMobil report<\/a> in which the company argues that if it were to sell natural gas to a country that then reduced the use of coal, it \u201cwould result in an overall reduction of global emissions but would increase Scope 3 emissions reported by the Company.\u201d<\/p>\n Others have argued<\/a> that tracking Scope 3 is \u201cdouble counting\u201d: because Scope 3 emissions involve so many businesses and producers in a supply chain, they may each be claiming the same emissions. It\u2019s a potential overlap critics say could lead to a distorted view of emissions reductions. The argument is that a manufacturer might track the transportation of its goods as Scope 1 emissions \u2014 but all of the retailers and distributors who receive those goods could track them as Scope 3.<\/p>\n Several academic studies and frameworks<\/a> note ways to make a precise calculation that avoids double counting.\u00a0<\/p>\n And Steven Young, an industrial ecologist and associate professor at the University of Waterloo, said calculating Scope 3 isn\u2019t about tracking the total amount of emissions \u2014 it\u2019s about companies taking responsibility for the entire supply chain they\u2019re part of creating.\u00a0<\/p>\n \u201cPart of the ambition was, well, it\u2019s sort of double counting who\u2019s responsible, but that\u2019s kind of a good thing, if more than one organization is looking out for emissions reductions and management,\u201d he said.\u00a0<\/p>\n Hastings-Simon said Scope 3 emissions calculations become essential if a company is claiming to be a part of a \u201clow-carbon solution.\u201d This gets back to the ambitious plans for carbon capture in Canada\u2019s oilsands: even if all the emissions created during production were kept out of the atmosphere, exported fossil fuels would still create greenhouse gases when used elsewhere.\u00a0<\/p>\n \u201cIf there isn\u2019t a credible explanation for how Scope 3 emissions will be reduced \u2026 then from a risk perspective a company should be able to explain why they see a market for their products in a future if there are broad global commitments to move to a net-zero future,\u201d she said.\u00a0<\/p>\n The non-profits InfluenceMap<\/a> and Greenpeace have<\/a> criticized the Pathways Alliance<\/a> group of Canadian oilsands companies for not including Scope 3 emissions in public plans to reduce the effect of their emissions, including through carbon capture<\/a>. Pathways Alliance did not respond to a list of questions from The Narwhal about its Scope 3 emissions or these criticisms.\u00a0<\/p>\n Oil and gas companies \u201caren\u2019t just meeting a demand but actually creating more demand and thus can be considered responsible for some of these emissions,\u201d Hastings-Simon said, pointing to the explosive growth of investment in petrochemical-based plastic production<\/a> as one example.\u00a0<\/p>\n Those in favour of Scope 3 reporting also say it\u2019s key to identifying western corporations that place the most environmentally damaging parts of their supply chains in the Global South. Shifting the burden of those emissions onto those nations while the west seemingly meets climate targets, is a practice scholars call \u201cCarbon Colonialism.<\/a>\u201d<\/p>\n At the heart of creating \u2014 and regulating \u2014 these standards is the understanding that global carbon emissions must be drastically cut to avoid the most severe effects of climate change.\u00a0<\/p>\n To be specific, the Greenhouse Gas Protocol reports the world needs to reduce emissions by as much as 85 per cent below what we put out in 2000 by 2050 in order to prevent the global temperature from increasing beyond 2 C above pre-industrial levels. Above that level \u201cwill produce increasingly unpredictable and dangerous impacts for people and ecosystems\u201d \u2014 and Canada is already experiencing an increase in extreme weather that Environment and Climate Change Canada has linked<\/a> to climate change.\u00a0<\/p>\n Are Scope 3 emissions regulated in Canada?<\/p>\n Fun fact: right now, there\u2019s no universal requirement for Canadian corporations to disclose the full range of their emissions.\u00a0<\/p>\n Some industries are subject to a patchwork system of disclosure regulations, particularly concerning Scope 1. Since 2004, the federal government has required facilities that produce 10,000 tonnes or more of greenhouse gases annually to report emissions every year. Many provinces have similar regulations that kick in around 10,000 tonnes \u2014 although in Manitoba, the threshold is 50,000 tonnes.\u00a0<\/p>\n Attempts to introduce Scope 3 reporting \u2014 even voluntarily \u2014 have been delayed.<\/p>\n Last year, the Canadian Sustainability Standards Board gave corporations a deadline of 2027<\/a> to start reporting voluntarily \u2014 a timeline it said would prevent the move having an overly negative effect on markets.\u00a0<\/p>\n As of 2024, the federal Office of the Superintendent of Financial Institutions started requiring banks and insurance companies to report on plans to address the impact of climate change on their operations. The office has said<\/a> the rationale behind the move is to protect those industries from legal accusations that they failed to protect investors from risks associated with climate change, such as the cost of extreme weather damages.\u00a0<\/p>\n Technically, those regulations make Scope 3 reporting mandatory \u2014 but that requirement, too, has been delayed, until 2028. The office said it wanted to align with the Canadian Sustainability Standards Board\u2019s choice to push back Scope 3 reporting policies. It kept Scope 1 and Scope 2 disclosure deadlines in place: depending on the size of the institution, those kick in this year and early next.\u00a0<\/p>\n And in April, the Canadian Securities Administrators also delayed its December 2024 pledge to develop \u201ca climate-related disclosure rule.\u201d The group,\u00a0an umbrella organization of provincial and territorial securities regulators, said in a press release it was pausing plans to figure out disclosure rules for both climate risks and employee diversity, as \u201cin recent months, the global economic and geopolitical landscape has rapidly and significantly changed.\u201d<\/p>\n Climate experts say movement on the issue is too sluggish given the urgency of global warming. Especially since the standards will be voluntary anyway.\u00a0<\/p>\n Hastings-Simon said delays on Scope 3 reporting raise a lot of \u201cred flags,\u201d as Scope 3 is a long-established concept corporations should be prepared for. She\u2019s concerned a longer timeline gives companies time to push back against climate regulation altogether.<\/p>\n \u201cWhy is there this need for delay?\u201d she said, emphasizing the importance of the government and its agencies having the full picture of Canada\u2019s emissions. If investors or the public want to understand if a company is prioritizing decarbonization, it\u2019s impossible to get the full picture without a Scope 3 disclosure, she said.<\/p>\n How can we reduce Scope 3 emissions?<\/p>\n The Greenhouse Gas Protocol has suggestions on how companies can start tackling Scope 3 emissions. These include reducing the distance between the supplier and the consumer and reducing commutes by offering remote work.<\/p>\n John Robinson, a professor of global affairs and the environment at the University of Toronto, has been leading a team examining how the school can cut its Scope 3 footprint. He said there are essentially two options: either reduce the activity producing the emissions or switch to an alternative activity that results in fewer greenhouse gases.\u00a0<\/p>\n He said the first option is under an institution\u2019s direct control. For example, The University of Toronto is trying to make its campus more pedestrian-friendly, so that staff and students can move around emissions-free.\u00a0<\/p>\n It\u2019s harder to control the emissions coming from manufacturing and shipping of goods and services it doesn\u2019t produce.\u00a0<\/p>\n \u201cSince the activity \u2026 can\u2019t always be eliminated or reduced, there is a lot of focus on finding lower-emissions alternatives,\u201d Robinson said.<\/p>\n The tool then is lifecycle assessment, he said. The process aims to calculate the total amount of emissions produced by the goods and services that went into creating an item, allowing institutions to make informed decisions about alternatives. If the school were purchasing desks, for example, it could consider multiple desks from multiple suppliers, comparing how much wood each uses, along with what kind of wood it is and where it came from. Then it could choose the option with the lowest emissions.\u00a0<\/p>\n Several consulting firms have software that can help with this calculation, Robinson said. And his own students can do it \u2014 as long as they have the information.\u00a0<\/p>\n What is the Carney government doing about Scope 3 emissions?<\/p>\n In short, not much.\u00a0<\/p>\n Even when the Canadian Sustainability Standards Board\u2019s list comes into play, it will be voluntary. \u201cIt doesn\u2019t have much teeth. You can put the information out there and some decision-makers will act on it, but it\u2019s a pretty weak tool,\u201d Young said.\u00a0<\/p>\n He said what\u2019s proven to be more effective is carbon pricing<\/a> \u2014 being charged for making emissions as an incentive to reduce them. But one of the first things Mark Carney<\/a> did after becoming prime minister was remove Canada\u2019s consumer carbon tax. While there is still a price for large emitters, Young said that misses smaller actors in the supply chain.<\/p>\n Meanwhile, Carney has repeatedly said Canada should be a leader in carbon capture and storage<\/a>, which involves containing the carbon dioxide at the point of emission and then burying it deep underground.\u00a0<\/p>\n![\"Steam](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/10\/PRAIRIES-AB-Oilsands-flyover_Amber-Bracken_TheNarwhal32.jpg\"\/)
A tailings pond at a Suncor open pit oilsands mine near Fort McMurray, Alta., in 2023. While mining and upgrading bitumen creates emissions, the burning of the products \u2014 say, in consumers\u2019 cars \u2014 creates far more.\u00a0Photo: Amber Bracken \/ The Narwhal<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/10\/Ont-Scotiabank-oldsign_Davis-061.jpg\"\/)
Canadian banks and insurance companies must report direct emissions, but the federal body that oversees them has delayed reporting requirements for indirect emissions known as Scope 3 until 2028. Photo: Carrie Davis \/ The Narwhal<\/p>\n