Supply chain Scope 3 emissions in marine contracting

The growing need for marine contracting organisations to account for Scope 3 emissions stems from increasing pressure from multiple stakeholders, including regulatory bodies, clients, and investors.

Regulatory agencies worldwide are tightening environmental standards and demanding greater transparency in carbon reporting, compelling companies to assess their entire supply chain’s environmental impact.

In response, clients are increasingly prioritising sustainability, and demanding proof of comprehensive carbon management practices from their contractors to align with their own corporate social responsibility goals, while investors are increasing their attention on companies’ GHG emissions and are seeking assurance that they are managing climate-related risks effectively, as part of their environmental, social, and governance criteria.

And internal stakeholders, such as employees and management, recognise the importance of sustainability in enhancing corporate reputation, attracting and retaining talented employees, and ensuring long-term business viability. Consequently, marine contracting organisations should consider accounting for Scope 3 emissions to meet these diverse expectations, remain competitive, and contribute to global efforts to mitigate climate change.

However, this can be a significant and complex undertaking. The Carbon Disclosure Project estimates that businesses’ Scope 3 emissions – emissions from a company’s ‘upstream’ supply chain, as well as ‘downstream’ emissions related to the services they provide – are typically over 11 times greater that their Scope 1 and Scope 2 emissions – those directly caused by their own operations – combined.

To support the sector to begin this journey, IMCA’s new guidance on Scope 3 GHG emissions accounting provides recommendations and industry resources for Scope 3 GHG emissions accounting, allowing members to develop their own methods suited to their organisation and the legal requirements they face.

“Clients are increasingly prioritising sustainability”

Like all IMCA Guidance, this new 45-page document has been produced by members, for members, and is the result of over 20 months of work by IMCA’s Supply Chain Work Group, part of IMCA’s Environmental Sustainability Committee.

The document is designed to assist IMCA members in the accounting of Scope 3 emissions following the international standards, for example the GHG Protocol, and is structured around four key sections: an overview of main Scope 3 categories that are significant to the marine contracting industry; the methodology that businesses can use to account for their Scope 3 emissions across different emissions categories, and to judge which are the most significant areas to prioritise; guidance on setting and managing Scope 3 emissions reduction targets, featuring case studies from leading marine contracting businesses; and key references in offshore industry-related Scope 3 emissions sources.

While considering all Scope 3 emissions, IMCA’s guidance focusses particularly on those generated by marine contractors’ supply chains, where co-operation between suppliers and contractors will be essential if the offshore sector is to decarbonise.

Companies must have a co-ordinated approach throughout the value chain, particularly focusing on supplier engagement, to tackle supply chain sustainability, reduce emissions, and promote business efficiency.

This engagement can include supplier training and education, policy incentives, and requirements during procurement, and partnered initiatives to drive innovation and re-design the supply chain.

As with all IMCA guidance, we look forward to feedback as we continue to lead efforts to support our member’s important work in this area.