System Setup Before 2026 International Mandatory Disclosure Regulations
Risk Mitigation... "Strengthening Verification and Reduction Activities of Partner Emissions"
Samsung Electronics has reduced its carbon emissions, known as Scope 3, generated not only during product manufacturing but also at the consumption stage compared to the previous year. In addition to reducing emissions, it is a significant achievement that the company completed the Scope 3 measurement system before the international mandatory disclosure deadline in 2026, thereby mitigating financial risks.
On the 4th, Samsung Electronics revealed in its '2023 Sustainability Management Report' that its Scope 3 emissions for 2022 amounted to 124.715 million tons. This figure includes carbon emissions from upstream processes such as partner manufacturing and logistics, downstream emissions from customer product usage, as well as the combined results of all 14 measurement categories set by the International Sustainability Standards Board (ISSB) as global disclosure benchmarks.
A simple comparison with the 2021 Scope 3 emissions (123.235 million tons) disclosed in the 2022 Sustainability Management Report shows an increase in emissions. However, since last year included two additional categories (capital goods and processing of sold products) for a total of 14 categories, when aligning the measurement categories with those of 2021, last year’s emissions amount to 123.065 million tons, reflecting a 0.14% decrease.
Scope 3 emissions generated by companies are significantly larger than Scope 1, which refers to greenhouse gases emitted during the manufacturing process at factories, and Scope 2, which refers to greenhouse gases emitted due to electricity used in manufacturing processes. Last year, Samsung Electronics’ Scope 3 emissions were 21 times that of Scope 1 (5.972 million tons) and 13.7 times that of Scope 2 (9.081 million tons). It was 8.3 times greater than the combined total of Scope 1 and Scope 2 emissions (15.053 million tons). This underscores the importance of accurate measurement and reduction of Scope 3 emissions to achieve carbon neutrality goals.
Samsung Electronics has now fully incorporated the global standards for Scope 3 measurement and disclosure items in its 2023 Sustainability Management Report. At the time of the 2022 report release, the company had not yet established measurement systems for two categories listed in the ISSB’s Scope 3 disclosure list: 'capital goods' and 'processing of sold products.' Samsung Electronics’ reduction of Scope 3 emissions last year, along with establishing the measurement and disclosure system ahead of the international mandatory disclosure deadline, is a noteworthy accomplishment. The ISSB has set 2026 as the mandatory disclosure deadline for companies’ Scope 3 emissions.
Since announcing its 'New Environmental Management Strategy' last September, which includes joining RE100 to procure 100% of its electricity from renewable energy, Samsung Electronics has faced challenges tracking greenhouse gas emissions from its 2,131 global partner companies. Some have expressed doubts about whether the company could establish a Scope 3 disclosure system before the ISSB’s mandatory compliance deadline. Concerns were also raised that delays in establishing the Scope 3 disclosure system could hinder management decisions at partner companies and affect investment decisions.
Samsung Electronics has operated a Scope 3 task force (TF), improved calculation methodologies for each Scope 3 category, provided partner training, and offered greenhouse gas reduction consulting around the time of the New Environmental Management Strategy announcement. The company stated, "Last year, the Korea Quality Foundation completed third-party verification of our Scope 3 emissions," and added, "We plan to continuously advance our calculation methodologies to ensure accurate Scope 3 emissions measurement."
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