Decarbonization software
fit for Retailers

It is difficult for Retailers to accurately report on Scope 3 emissions because of the barriers to gathering reliable data from their value chains. As such, it is critical that Retailers take a comprehensive approach, identifying where data is missing or of poor quality, and instead of excluding it from their Scope 3 footprint, to  leverage the data they have to estimate and impute what is missing. In this way, they can make meaningful progress and continue to improve their estimates as primary data is made available by suppliers. 

Suppliers are an integral part of decarbonizing a product value chain. Over 90% of total emissions often come from activities beyond a company’s direct operations, such as the production of intermediate inputs.

Suppliers provide critical primary data on energy use, transportation methods, and production processes, which are necessary for creating accurate estimates of supply chain emissions. By involving suppliers, companies can gain a more comprehensive understanding of these significant emissions and identify opportunities for reduction. Strong partnerships with suppliers can also drive the adoption of sustainable practices, leading to meaningful progress in reducing overall emissions.

A PCF study breaks down a company’s impact into smaller, more actionable pieces. Instead of looking at emissions for the whole company, focusing on emissions at the product level helps highlight key hotspots and pinpoint decarbonization opportunities for the most important products or product groups.

Retailers can then use this data to engage more effectively with suppliers, and when shared publicly, it also empowers consumers to make more sustainable choices, helping your company stand out in the market.

While traditional PCF studies usually required a lot of time and resources, Terrascope leverages AI to get product emissions insights fast across your entire portfolio, even without supplier data. Our proprietary data models help fill in data gaps while you work on your key data improvement needs—making PCF studies less of a burden and suitable for even companies that just started out on their climate journey.

For Retailers, the main sources of operational emissions typically include:

1. Fossil fuel use for company vehicles and machinery

   This includes cars, trucks, forklifts, and generators. In the short term, Retailers can focus on improving fuel efficiency. For long-term decarbonization, the biggest lever is to electrify the majority of their equipment and switch to renewable electricity.
   
   

2. Electricity, heating, and cooling for offices and retail stores

   Key sources of emissions here include lighting, refrigeration, and air conditioning. To reduce emissions, prioritize energy efficiency first (e.g., upgrading to LED lighting or more efficient HVAC systems) and then switch to renewable electricity to further decarbonize.
   
   

3. Refrigerant emissions

   Many common refrigerants have a high Global Warming Potential (GWP), meaning even small leaks can be hundreds or even thousands of times more potent in their warming potential than carbon dioxide. To address this, upgrade refrigeration systems to prevent leaks and consider switching to lower GWP alternatives, such as carbon dioxide, ammonia, or R290.
   
   

4. Waste generated in operations

   Waste types primarily include packaging, product waste, or food waste. Companies can reduce waste by cutting down on unnecessary packaging and promoting circularity (e.g., implementing “ugly food” programs to repurpose food that would otherwise go to waste).

Depending on the Retailer’s circumstances and geographical location, several renewable energy options are available, including:

• Onsite renewable generation: Installing systems like rooftop solar panels to generate clean energy directly at your facility
  
  
• Power Purchase Agreements (PPAs): Committing to long-term purchases of renewable energy from a specific project. PPAs can be physical (where the renewable energy is directly transmitted to your site) or virtual (where there’s no direct energy transfer, but you’re supporting a renewable project financially)
  
  
• Green Tariffs: Purchasing electricity from your utility provider that includes a higher percentage of renewable energy, as defined by the agreement
  
  
• Renewable Energy Certificates (RECs): Buying certificates that represent the environmental attributes of one megawatt-hour (MWh) of renewable energy generated elsewhere in the grid. This allows you to support renewable energy without directly purchasing it. Different countries have their own recognized REC standards, such as iREC, GEC, REGO, etc.
  
  
• Joining initiatives like RE100: Becoming a member of RE100, where leading companies share best practices, resources, and commit to 100% renewable energy. This initiative sets clear standards for responsible renewable energy procurement

If your company wants to set ambitious climate targets with the Science Based Targets initiative (SBTi), you may also need to set a FLAG target. FLAG stands for Forest, Land, and Agriculture, and it applies to companies with significant emissions tied to land-based activities. 

FLAG targets are set in addition to the usual energy and industry targets, to cover agricultural and land-based emissions in a company’s operations and value chain.

For a Retailer, FLAG targets would apply if:

• You’re in the Food and Consumer Staples Retailing sector (a FLAG-designated sector), or
• Your FLAG-related emissions are more than 20% of your total Scope 1, 2, and 3 emissions. For Retail, sub-categories such as furniture, apparel, luxury goods, tires, or fast-moving consumer goods (FMCG) often cross that 20% threshold. To know if this applies to you, it’s a good idea to do a quick preliminary assessment of your FLAG-related emissions.