How does Bend treat downstream emissions?
When companies report their emissions, they're asked to report both their 'upstream' emissions (the sourcing, manufacturing, and distribution of their products), as well as their 'downstream' emissions (the use and disposal of their products). This is a good thing; companies should be accountable for the entire lifecycle impact of their products. Any products that need to be powered — from your laptop, to your stove, to your Netflix subscription — generate emissions from use. But accounting for downstream emissions also presents certain challenges. When is it appropriate to include / exclude 'use of sold products' emissions?
Imagine you're buying a car. It might be the case that the manufacturing of an electric vs. gas -powered car generates similar emissions. But of course the emissions over the expected lifetime of an EV vs. gas car are very different (emissions per mile traveled for EVs tend to be much lower). Those lifetime emissions should weigh heavily in your purchase decision.
At the same time, when it comes to carbon accounting, the actual CO2e footprint of your car purchase is in fact just the footprint of the car when you drive it off the lot; you will account for those usage emissions later on. If you purchase the gas car, every fill-up at the gas station will come with a steep CO2e cost. And if you purchase the EV, your usage will be covered in your monthly electricity bill. This transaction-based approach to carbon accounting ensures higher accuracy — your actual usage will differ from whatever averages a company might have used when estimating their downstream footprint.
Whether it is appropriate to include those 'use of sold product' emissions comes down to use case:
- As a comparison shopper, it's useful to be aware of the expected lifetime emissions of product A vs. product B (and you might want to tune that estimate, based on your specific expected usage).
- As an investor, you'll likely want to consider 'use of sold product' emissions, as those emissions represent a key business risk factor.
- When you're accounting for the climate impact of a specific purchase, you'll want to exclude 'use of sold product' emissions up-front, and measure your usage footprint separately, as you incur those costs, to increase accuracy and avoid double-counting.
Bend makes this easy — by default we include downstream emissions in our aggregated company stats, but we exclude downstream emissions in transaction estimates.
For more information, refer to the the Greenhouse Gas Protocol Scope 3 Standard.