Understanding Upstream and Downstream Emissions
In the realm of carbon emissions, understanding the difference between upstream and downstream emissions is crucial for effective sustainability management. This article explores the definitions, significance, and challenges associated with these two types of emissions. Furthermore, we explore how Neutraly empowers organisations to track, measure, and mitigate their carbon footprint across the entire value chain.
Defining Upstream and Downstream Emissions
Upstream emissions refer to greenhouse gas (GHG) emissions released during the extraction, production, and transportation of raw materials or energy sources used in the production of goods and services. These emissions occur before the final product reaches the consumer. Below is a description of each of the eight upstream emission categories, as defined by the GHG Protocol:
Purchased goods and services: This category includes all upstream emissions from the production of all purchased or acquired products and services.
Capital goods: This category includes all emissions from the production of purchased or acquired capital goods.
Fuel and energy-related activities: This category includes emissions from fuel and energy-related purchased or consumed products or services that aren’t covered in scopes 1 and 2.
Upstream transportation and distribution: This category includes emissions generated from third-party transportation and distribution services and emissions generated to transport and distribute purchased products.
Waste generated in operations: This category includes emissions from the treatment and disposal of the waste generated by the reporting company’s operations. This could be solid waste and/or wastewater.
Business travel: This category includes emissions generated from employee transportation for business-related activities in third-party-owned or operated vehicles.
Employee commuting: This category includes emissions from employee commutes between their workplace and home.
Upstream leased assets: This category includes emissions from the operation of assets the reporting organization leases. This can include a leased car used for business travel or leased heavy machinery used for a company's construction project.
Downstream emissions encompass the GHG emissions released during the use, disposal, and end-of-life stages of a product or service. These emissions occur after the product is in the hands of the consumer. Below is a description of each of the seven downstream emissions categories as defined by the GHG Protocol:
Downstream transportation and distribution: This category includes emissions generated from transporting and distributing sold products in vehicles that aren’t owned or controlled by the reporting organization.
Processing of sold products: This category includes emissions created when third parties process sold intermediate products following the sale. Intermediate products are goods used with another product before end use.
Use of sold products: This category includes emissions created from the use of sold services and goods—encompassing the scope 1 and 2 of end users of a sold product.
End-of-life treatment of sold products: This category includes emissions from waste treatment and disposal of sold products at the end of their life cycle.
Downstream leased assets: This category includes emissions generated from the operation of owned assets leased to other entities that aren’t included in scopes 1 or 2.
Franchises: This category includes emissions from franchise operations. This applies to franchisors and includes scope 1 and 2 emissions from franchisees.
Investments: This category includes investment emissions, also known as financed emissions associated with investments. This category is mainly for financial institutions but is relevant to all other organizations that provide financial services.
Significance and Challenges
Understanding upstream and downstream emissions is essential for a comprehensive carbon accounting strategy. Upstream emissions are often associated with indirect or embedded emissions, which can account for a significant portion of an organisation's overall carbon footprint. On the contrary, downstream emissions directly impact consumer behavior, product usage, and waste management. Addressing both types of emissions allows organisations to implement targeted reduction strategies and develop sustainable practices throughout the entire lifecycle of their products or services.
How Our Accurate Carbon Accounting Software Helps
Our advanced carbon accounting software offers a comprehensive solution to accurately measure, track, and manage upstream and downstream emissions. By leveraging precise data collection, real-time analytics, and robust reporting features, organisations can gain a holistic view of their carbon footprint. Our software simplifies the complex task of identifying emission sources, calculating emissions, and assessing the effectiveness of emission reduction initiatives. With detailed insights, organisations can make informed decisions, optimize their supply chains, reduce waste, and enhance overall sustainability performance.
Effectively managing upstream and downstream emissions is a key component of any sustainability strategy. By using Neutraly, your organisation can navigate the intricacies of these emissions, identify opportunities for improvement, and drive meaningful change towards a more sustainable future. Embrace the power of precise carbon accounting and take proactive steps towards a low-carbon economy.
