GHG Protocol is an internationally recognised framework to measure emissions developed by the(WRI) and the World Business Council for Sustainable Development (WBCSD). According to this framework, any company’s carbon footprint includes the direct emissions that it causes as well as the indirect emissions from the energy it uses, its supply chain and the life cycle emissions of the products that it sells.
The GHG Protocol divides emissions into three categories or ‘scopes’. Scope 1 includes all the direct emissions, while scope 2 includes indirect emissions from the electricity and other energy utilities that a company consumes. But scope 3 is where things get interesting. It includes the indirect emissions from the suppliers, logistics, and use and end of life treatment of the products sold, among other things.
As per Volkswagen AG’s sustainability report 2021, the leading global automaker’s scope 3 emissions were more than 98% of its total emissions. Of this, vehicle usage accounted for about 77% of the emissions. Thus, effectively, more than three-quarters of the’s GHG emissions come from the tailpipe of the vehicles they sell.
Another 16% of scope 3 emissions came from purchased goods and services – essentially the suppliers.
“Scope 1 and scope 2 are easier to manage. But scope 3 has to be managed across the value chain and it takes time,” said Sambitosh Mohapatra, partner, ESG Lead at PwC India.
Automakers are increasingly turning to electric vehicles (EV) to reduce the tailpipe emissions, thus helping their sustainability credentials.
However, another challenge that remains to be addressed is the source of the electricity used to drive EVs. In a country like India, where a bulk of the electricity is generated using fossil fuels like coal, the emissions are simply moving away from the tailpipe to the power plant, Mohapatra said.
But it must be considered that EVs generally have a higher thermal efficiency than combustion engine vehicles. What this means is that even if 100% of electricity comes from burning fossil fuel, EVs still cause lower emissions than combustion engine vehicles.
Meanwhile, the needle is consistently moving in the sustainable direction in India as far as electricity generation is concerned. Fossil fuel-based power plants today account for 60% of India’s installed electricity generation capacity compared to 70% five years ago, as per data from the