Scope 3 Emissions: Measurement and Management

Given that climate change is one of the biggest risks facing the real economy as well as the financial industry, there is an urgent need to measure and manage this risk (TCFD, 2017). For example, this risk may come from new regulation of a company’s high emission products and shifts in end-product market demand driven by climate concerns. One way to measure this risk is the carbon (or carbon dioxide/CO₂) exposure of products and their corresponding supply chains (Economist, 2020).