Addressing the Challenges of Reducing Scope 3 Emissions

Reducing Scope 3 emissions—those generated from assets not owned by the reporting organization—is a critical yet complex challenge. Our project aims to map out pathways to address this ambitious goal and identify key solutions. In the first two weeks, we defined the scope, developed a work plan, and began exploratory research. This post describes my motivation for applying for this project, the project scope, work plan, exploratory research, team collaboration, and communication with the client. Finally, I will write about the key learnings and next steps.

Motivation:

In my work in Japan’s government, I developed a data exchange platform to share greenhouse gas emissions among firms in the supply chain for large companies to measure Scope 3 emissions and report them to governments. Through this, I realized the need to harmonize with international initiatives, as Japanese companies’ supply chains often extend overseas. I joined this project to deepen my understanding of Scope 3 emissions measurement and reduction, particularly in the U.S. and Europe, where policies and business practices concerning Scope 3 emissions can significantly differ from those in Japan.

Project Scope:

Our client is a venture capital firm investing in early-stage startups focused on consumer climate tech innovations, particularly in regenerative and circular economy solutions. Given that Scope 3 emissions can represent about 70% of the total emissions in a value chain, our client sees Scope 3 measurement and reduction as critical.

We worked closely with the client during our initial meeting to define the project's objectives. The client will use our deliverables to urge stakeholders—including investors—to understand the opportunities around Scope 3 emissions and tackle the challenges. The client emphasized that exploring system-level barriers and pathways to successfully measure and reduce emissions was the main point of our desirable deliverables.

While the client initially requested a broad analysis—covering the history of Scope 3, identifying the path to success, examining policy, financial, and business drivers, and finding solutions and startups —we agreed to devote much of our time to the path to success. This experience helped me understand the importance of open communication with the client to clarify its core needs and goals.

Work Plan:

We have chosen to focus on analyzing the pathways to success in reducing Scope 3 emissions, with attention to key drivers from the policy, financial, and business perspectives that are closely related to the pathways until the interim presentation. Our work plan includes conducting exploratory research through literature reviews and interviews with experts, including professors from Columbia University and professionals in various sectors. This phase will guide us toward more profound research. Following this phase, we will analyze business case studies and specific startups, leading to the final presentation. Weekly meetings with the client will ensure that our deliverables align with the client's expectations. Based on our professor’s advice, I have already started exploratory research. I found that prioritizing critical issues and gradually refining our focus would improve the quality of our deliverables, especially given limited resources.

Exploratory Research (History of Scope 3 emissions):

The exploratory research into the history of Scope 3 emissions revealed key milestones. Non-governmental organizations, such as the World Resources Institute, World Business Council for Sustainable Development, and the International Organization for Standardization, made standards regarding Scope 3 in the early 2010s. Then, CDP (Carbon Disclosure Project) and CCRF (Climate Change Reporting Framework) have driven firms’ voluntary disclosure of Scope 3 emissions. Currently, some governments have begun to impose mandatory disclosure of Scope 3 emissions.

However, I’ve observed challenges in government-imposed disclosures, especially when regulations replace voluntary efforts. For instance, while jurisdictions of Singapore, California, and the European Commission decided to mandate Scope 3 disclosure for specific companies, the U.S. Securities and Exchange Commission (SEC) has faced opposition from industry groups, giving up requirements for Scope 3 disclosure in 2024. 

Exploratory Research (Defining problems and countermeasures):

In some countries, the industries opposed to mandatory disclosure highlight the difficulty of measuring and reducing Scope 3 emissions in the face of concerns over the low quality of measurable data, difficulty in obtaining information from companies with which they have no direct business relationship or from overseas companies, and high costs to measure and reduce Scope 3 emissions. At the same time, some governments and private organizations have started to address these obstacles by developing software tools and secure data exchange platforms to improve measurement and reporting. For example, German and Japanese companies have recently begun to provide platforms for sharing carbon footprints between companies to comply with the EU battery regulation, which plans to impose mandatory carbon footprint disclosure in 2025. However, since full-scale operation is just beginning, it remains to be seen whether operations of information sharing across companies and borders will be smooth, whether the measurements by stakeholders in the supply chain will be accurate, and whether reporting organizations will be able to urge stakeholders to reduce Scope 3 emissions.

These challenges and counter-measures indicate that measuring and reducing Scope 3 emissions is challenging because stakeholders must work together across companies and national borders. Therefore, I will identify specific problems and solutions through interviews with experts and desk research.

Team Collaboration:

Our team consists of four members with diverse backgrounds, enriching our discussions and perspectives. To ensure productive collaboration and provide significant value to clients, we have adopted a motto: “One Team, One Thought, One Voice.” This helps us maintain cohesion and present unified insights to the client after the constructive discussion. To achieve this motto, we hold weekly internal meetings to ensure everyone is aligned and contributes their strengths toward our shared goal.

Building mutual trust and clear communication within the team has also improved our performance. When we have a problem, we discuss it with each other to find a solution that satisfies everyone. For example, though everyone was so busy that it was challenging to coordinate dates with the client, we solved the problem by discussing and identifying dates when everyone could attend. Leaving no one behind leads to the development of a trusting relationship within the team.

Additionally, maximizing team performance by dividing tasks and having each member contribute to the same degree is essential. In these few weeks, some members summarized their opinions about team norms, and others contacted our client. I contributed to our project by preparing a document for client meetings and developing part of our work plan. This way, we divide the tasks, and each team member actively tackles them.

Communication with Clients:

After an internal meeting, sharing our skills inventory, and discussing what we would discuss with the client, such as the project’s goal, scope, deliverables, and communication logistics, we made an appointment with the client. As I mentioned above, in a meeting with the client, we identified that the scope focused on pathways to success for Scope 3 emissions. Given that the client is a venture capital firm, we initially assumed they were primarily interested in identifying startups. However, we discovered that their primary goal was to raise stakeholders' awareness around Scope 3 emissions. To achieve this goal, the client expects us to interview professors at Columbia University and create academic work to attract their attention. In summary, rather than identifying specific new business opportunities, such as finding start-ups to invest in, the client wants to enhance its learnings of Scope 3 emissions and achieve its goal of increasing stakeholders’ interest. 

Moreover, building trust and open communication with the client is essential for the project’s performance. The emphasis on listening to the client after mutual self-introduction at the initial meeting would have led to trust-building and open discussion. Indeed, through that discussion with the client, we can identify the right direction for the project. Additionally, although it may seem trivial, the frequency of meetings and the choice of communication tools tailored to the client’s preferences may also have contributed to fostering a relationship of trust.

Key Learnings:

Over the past few weeks, I have learned critical project success factors:

1. Listening carefully to the client to understand their true needs.
2. Defining and narrowing the project’s focus effectively.
3. Conducting exploratory research to clarify issues before diving deeper.
4. Consulting professionals outside the team.
5. Developing a structured work plan that prioritizes vital topics.
6. Building solid relationships, both within the team and with the client, to facilitate open, constructive dialogue.

Next Steps:

In the coming weeks, I will continue to enhance my knowledge of Scope 3 emissions and refine our research approach, focusing primarily on the pathways to success for measuring and reducing Scope 3 emissions. At the same time, some other members are supposed to create a list of interviewees. We will prioritize and make appointments with professionals to obtain their knowledge of Scope 3 emissions. By synthesizing findings from professionals and desk research, we will ensure that our deliverables offer practical and impactful recommendations for reducing Scope 3 emissions.