Sustainability Scope 3 – an opportunity for CX

By Paolo Barbesino, PhD and Qaalfa Dibeehi

Sustainability Scope 3 – an opportunity for CX

CX professionals and sustainability experts should work together to improve the focus on Scope 3 emissions of their products and services. Scope 3 emissions are the result of activities from assets not owned or controlled by the business, but that the business indirectly affects in its value chain. But Scope 3 emissions are a contested domain too, as their exclusion from the SEC’s new rule about carbon disclosure of listed companies clearly shows.

Many players are reluctant to include Scope 3 emissions in their sustainability agenda. The ECB (European Central Bank) has recently highlighted the impact of this on the lending portfolio of main EU banks. Forward-looking players are increasing their efforts around Scope 3. Global consumer brands company Unilever announced the release of its new Climate Transition Action Plan that introduces new value chain emissions targets, amounting to a 39% absolute reduction in total targeted Scope 3 emissions by 2030.

The plan sets targets to reduce energy and industrial emissions from purchased goods and services, upstream transport and distribution, energy and fuel-related activities, direct emissions from the use of sold products, end-of-life treatment of sold products, and downstream leased assets by 42%, and forest, land and agriculture GHG (greenhouse gas) emissions from purchased goods and services by 30.3%.

So why is this an opportunity for customer and employees experience (CX)? Effectively, CX brings to the business the outside-in perspective. It looks at the business from the customer’s point of view and asks what do we need to do to improve our standing in the customer’s eyes. The inner working of the company that goes into the customer perception is complex. It requires systems thinking. One of the key lessons CX professionals have taken on board is that the no one department or function is responsible for how the customer perceives the business. It’s similar for Scope 3.

CX practitioners have at their fingertips tools and techniques to assess and bring complex systems factors into focus for a business. Furthermore, experienced CX practitioners are proficient in bringing new perspectives like Scope 3 to life in a company where many decision makers are ignorant and/or resistant to the new perspective. The major advantage that sustainability and Scope 3 have over CX is that governments are increasingly making regulations that are punitive to companies that overlook sustainability. As the penalties get more punitive, companies will have to go well beyond pure compliance or greenwashing where they simply talk the talk and only appear to act in earnest.

The design of products, services, and entire business models around minimizing Scope 3 emissions is a massive opportunity in the sustainability space. It’s enough to look at the PWC picture below to understand why.

For example, the CX community should be involved in …

  • upstream emission experience design of Scope 3 employee experiences making practices related to business travel, employee commuting and palatable to employees and management.
  • downstream emissions experience design of product usage which advance the acceptance of practices which get us closer to a circular economy, etc.

Moreover we can also say that the approach that is embedded in scope 3 with upstream and downstream becomes extremely powerful when attention is broadened from carbon emissions only to the wider sustainable boundaries.

Much innovation is needed. The financial industry can play a particularly important role. In this space, expect a new breed of fintechs to emerge which look at pushing and driving the Scope 3 agenda. Those fintechs would do well to apply the lessons of CX.