Electronics manufacturers are increasingly feeling the pressure to measure and understand the impact the carbon emissions of their products and manufacturing operations have on the environment. Regulators around the globe are calling for more transparency from companies when it comes to more indirect manufacturing operations.

In the electronics landscape, this increased scrutiny of Scope 3, or indirect, carbon emissions can be challenging to assess. While it is easier to measure the emissions of your own operations, electronics manufacturers are asking the question:

How do you measure the impact of carbon emissions on your entire supply chain down to the individual component?

SiliconExpert’s new CO2E data services can help you measure your Scope 1, 2, and, 3 emissions to satisfy your compliance reporting and ESG initiatives.

Understanding Scope 1, 2, & 3 Carbon Emissions in the Electronics Supply Chain

To measure the various levels of carbon emissions in the electronics supply chain, you must first understand the difference between Scope 1, Scope 2, and Scope 3 emissions. These classifications are defined by the Greenhouse Gas Protocol, a widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions.

Scope 1 Emissions

Scope 1 emissions, also referred to as direct emissions, are greenhouse gas (GHG) emissions that originate from sources owned or controlled by a company. These emissions result from activities like the combustion of fossil fuels in company-owned facilities and vehicles.

Examples in the Electronics Industry:

• Emissions from on-site manufacturing processes, such as using carbon dioxide (CO₂) during the photolithography process at a wafer when manufacturing semiconductors.
• Emissions from company-owned fleet vehicles used for logistics and transportation of electronic components between facilities.

Scope 2 Emissions

Scope 2 emissions are indirect GHG emissions associated with the consumption of purchased electricity, steam, heating, and cooling. These emissions occur at the site of the power generation source and not where the energy is consumed.

Examples in the Electronics Industry:

• Emissions resulting from the electricity used to run data centers housing servers that store vast amounts of electronic data.
• Emissions from the electricity used to power manufacturing plants and office buildings where electronic components are designed and assembled.

Scope 3 Emissions

Scope 3 emissions are all other indirect emissions that occur in a company’s value chain. These include upstream and downstream emissions, resulting from the production and transportation of purchased goods and services, waste disposal, employee travel, and other indirect activities.

Examples in the Electronics Industry:

• Emissions generated during the production of raw materials purchased to manufacture electronic components.
• Emissions from the transportation of electronic products to retailers and end consumers.
• Emissions from the disposal or recycling of electronic waste, including old smartphones, computers, and other electronic devices.

The Challenges of Measuring Scope 3 Emissions for Electronics Manufacturers

Scope 3 emissions are the most complex and demanding emissions for electronics manufacturers to measure due to the exhausting number of indirect variables across a company’s value chain. Most manufacturers lack visibility into their supply chains to even begin measuring their operations’ indirect impacts on emissions.

Electronics manufacturers need to gather information from suppliers about their emissions, production processes, and energy use for all the components they source to measure their Scope 3 emissions. This means companies need to dedicate extensive labor hours to track down and gather this data from suppliers. Even after managing to complete that difficult task, companies still need to process all that data to try to quantify their emissions impact.

Multiply this process for every component in a product across several product lines, and measuring emissions becomes almost insurmountable. Without the dedicated staff and knowledge base of the indirect emissions measurement process, companies can find themselves struggling to find a real emissions measurement to satisfy their reporting requirements.

The Clock is Ticking on Upcoming Global Emissions Reporting

The pressure is growing on companies to understand their carbon emissions as global regulator agencies draft new legislation requiring companies to start reporting their Scope 1, 2, and 3 emissions over the next two years.

2025: European Union Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) is European Union (EU) legislation that requires EU businesses—including qualifying EU subsidiaries of non-EU companies—to disclose their environmental and social impacts and how their environmental, social, and governance (ESG) actions affect their business. Large public interest companies will be required to file scope 3 emissions reports starting in 2025 (for 2024).

Non-compliance businesses can face fines of up to €10M or 5% of revenue.

2026: California’s Climate Corporate Data Accountability Act (SB 253)

The new California Climate Corporate Data Accountability Act (SB 253) requires large public and private companies doing business in California to disclose their scope 1, 2, and 3 emissions, beginning in 2026.

Companies that fail to disclose their CO2 emissions can face up to $500,000 in fines per year.