Intelligence Update

Scope 3 accounting: once is not enough

Scope 3 emissions have been declared the next frontier of greenhouse gas (GHG) emissions inventories. These emissions are generated in an enterprise’s value or supply chain. Academics and industry experts believe that Scope 3 emissions may represent 80% or more of a data center operator’s emission inventory, and addressing these emissions is considered critical to decarbonizing data centers.

Some climate-related financial disclosure regulations, such as the EU’s Corporate Sustainability Reporting Directive and the California Senate Bill 261, require data center operators to quantify and report their Scope 3 emissions inventory. While these regulations are well-intentioned, Scope 3 emissions inventories (see Figure 1) have a high degree of duplication and uncertainty. For example, an operating energy use and emissions inventory that addresses the full value chain for cloud operations in colocation space accounts for six times the actual emissions and introduces uncertainties through the estimates made by the IT equipment and component suppliers.

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