GHG Scope 3: From Spend to Impact

ZLM Verzekeringen

Are you grappling with Scope 3 for the first time? 

You’re not alone. Many businesses face questions like:

• "Where do we even start?"
• "Which method is right for us—activity-based or spend-based?"
• "How do we choose reliable emission factors?"

The Client Context 

ZLM, a Dutch insurance company, is committed to climate action. Despite not falling under CSRD's scope, ZLM chose to move forward with their ambition: calculating their Scope 3 Greenhouse Gas (GHG) emissions. Understanding that Scope 3 can be a complex piece of the climate puzzle, they partnered with TOSCA to tackle Category 1: Purchased Goods and Services.

The Question 

ZLM’s challenge was clear: "How do we measure the emissions embedded in everything we buy?" From office supplies to IT services, marketing campaigns to outsourced operations, they needed a robust way to quantify their Scope 3 (category 1) emissions in kilograms of CO₂e. Like many businesses, they were navigating this for the first time; and they wanted a partner who could guide them through the process with clarity and precision.

The Approach 

Scope 3 emissions cover 15 categories (GHG Protocol). Category 1 captures emissions from the extraction, production, and transportation of everything an organization procures. For service-based businesses like ZLM, this also means accounting for the carbon footprint of intangible purchases, such as cloud computing or consulting services.

We started by reducing complexity. Here's what we prioritized for this project:

• Research & Benchmarking: Next to the leading frameworks like the GHG Protocol, we reviewed sector-specific guidance (PCAF, Verbond van verzekeraars) and analyzed how peer insurance companies were approaching Scope 3.
• Tailored Methodology: We presented ZLM with four calculation methods—activity-based (e.g., CO₂e per liter, ton, or m³) and spend-based (CO₂e per euro spent)—each with the option to use supplier-specific data or industry averages from trusted databases like the EPA.
• Practical Choice: For this project, we recommended a spend-based approach using EPA’s industry-average emission factors and NAICS codes. This method balances accuracy with feasibility, especially for first-time calculations.
• Materiality Focus: Not all purchases are equal. We filtered ZLM’s procurement through two lenses: Financial significance & Carbon intensity

Overcoming the "Scope 3 Hurdle"

Scope 3 calculations are rarely straightforward. Data gaps, uncertain boundaries, and the sheer volume and variety of purchases can feel overwhelming. Here’s how we approached these challenges:

·         Defining the Baseline: We reviewed available data to select the most "audit-ready" starting point, presenting the pros and cons of activity vs. spend-based [Ud1] calculation, as well as the merits of a hybrid approach.

·         A Structured Inventory: Using our step-by-step Scope 3 plan, we inventoried ZLM’s material costs, ensuring no material costs were overlooked.

·         Informed Assumptions: Where data was limited, we applied transparent, evidence-based assumptions. This created a baseline ZLM can update annually without the immediate need for expensive, complex software tools.

Does This Sound Familiar? 

At TOSCA, we specialize in turning complexity into clarity. Whether you’re just beginning or looking to improve your existing calculations, we can help you: 

·         ✔ Map your emissions with a materiality-driven approach 

·         ✔ Choose the right tools and databases for your industry 

·         ✔ Build a baseline to track progress year after year

Ready to take the next step? Reach out to Ulrike de Jong and the TOSCA team are here to guide you | ? +31651072464 | ✉ ulrike@toscatribe.nl