Improve your understanding of Scope 1, 2 and 3 carbon emissions and how they can be part of a business climate action strategy.
Scope 1, Scope 2, and Scope 3 are categories used to classify carbon emissions associated with an organisation's activities. These categories were established by the Greenhouse Gas (GHG) Protocol, which is a widely recognised standard for measuring and managing GHG emissions.
Let's look at each scope:
Scope 1 emissions: These are direct emissions from sources that are owned or controlled by the organisation. It includes emissions from the combustion of fossil fuels on-site, such as those produced by company-owned vehicles, boilers, furnaces, or other equipment. Scope 1 emissions also encompass process emissions resulting from chemical reactions or other industrial processes.
Businesses can focus on reducing their direct emissions from owned or controlled sources. This may involve implementing energy efficiency measures, transitioning to low-carbon fuels, optimising industrial processes, and investing in renewable energy on-site. By reducing scope 1 emissions, organisations can directly decrease their operational carbon footprint and demonstrate a commitment to sustainable practices.
Scope 2 emissions: These are indirect emissions associated with the generation of purchased electricity, heat, or steam consumed by the organisation. They result from the production of energy by third-party entities, such as power plants. Scope 2 emissions are considered indirect because they occur off-site but are a consequence of the organisation's activities.
Addressing indirect emissions from purchased electricity, heat, or steam is crucial for a climate action strategy. Organisations can pursue strategies such as improving energy efficiency, procuring renewable energy, engaging in power purchase agreements (PPAs), and supporting renewable energy projects through the purchase of energy attribute certificates. By reducing scope 2 emissions, organisations can significantly influence the decarbonisation of the energy sector and contribute to the overall transition to clean energy sources.
Scope 3 emissions: These are all other indirect emissions that occur in the value chain of the organisation but are not included in Scope 2. Scope 3 emissions cover a broad range of activities that occur outside the organisation's operational boundaries. This includes emissions from purchased goods and services, business travel, employee commuting, transportation and distribution, waste disposal, and more. Scope 3 emissions are often the largest and most challenging to measure since they involve complex supply chains and activities beyond the organisation's immediate control.
Scope 3 emissions often represent the largest portion of an organisation's carbon footprint and are challenging to manage due to their indirect nature. However, including scope 3 emissions in a climate action strategy is essential for a comprehensive approach. Organisations can work closely with suppliers to optimise the supply chain, implement sustainable procurement practices, reduce transportation emissions, encourage sustainable commuting options, and promote circular economy principles. By addressing scope 3 emissions, organisations can influence emissions reduction throughout the value chain and drive positive change across industries.
By categorising emissions into these scopes, organisations can assess their carbon footprint more comprehensively and develop strategies to reduce their impact on the environment. It also helps in identifying areas where emissions reductions can be achieved both within the organisation and throughout the value chain to help create green growth.
Who defines Scope 1, 2 and 3 emissions?
The concept of Scope 1, Scope 2, and Scope 3 emissions was introduced and defined by the Greenhouse Gas (GHG) Protocol, a widely recognised and internationally accepted standard developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). The GHG Protocol provides guidelines for organisations to measure and manage their greenhouse gas emissions.
The GHG Protocol's Corporate Standard, which was first published in 2001 and has been revised and updated since then, outlines the definitions and methodologies for classifying emissions into these three scopes. The standard was developed through a multi-stakeholder process involving businesses, NGOs, governments, and experts in the field of greenhouse gas accounting and reporting.
The GHG Protocol's Corporate Standard has gained widespread adoption and is used by organisations worldwide to measure and report their carbon emissions. Many sustainability reporting frameworks and initiatives, such as the Carbon Disclosure Project (CDP) and the Science-Based Targets initiative (SBTi), also reference and align with the GHG Protocol's definitions and methodologies for scope classification.
It's important to note that while the GHG Protocol provides a standardised framework, organisations may have some flexibility in how they implement and report their emissions based on their specific circumstances and reporting requirements.
How can your business identify Scope 1 emissions?
To identify its Scope 1 emissions, your business can follow these steps:
Identify emission sources: Determine the sources within the organisation that directly emit greenhouse gases. This can include combustion of fossil fuels, such as those used in company-owned vehicles, on-site boilers, furnaces, or other equipment. It also encompasses process emissions resulting from chemical reactions or industrial processes.
Gather data: Collect relevant data on fuel consumption, energy use, and other activities that generate emissions. This may involve reviewing utility bills, fuel invoices, or other records that provide information about the types and quantities of fuels consumed on-site.
Calculate emissions: Calculate the emissions associated with each identified emission source. This typically involves multiplying the fuel consumption data by the corresponding emission factors. Emission factors represent the amount of greenhouse gas emissions produced per unit of fuel burned or process activity.
Convert emissions to CO2 equivalent: Convert the emissions of different greenhouse gases (such as carbon dioxide, methane, and nitrous oxide) into carbon dioxide equivalent (CO2e) using their respective global warming potentials (GWP). This step allows for a standardised comparison and aggregation of different greenhouse gases.
Summarise and report: Summarise the calculated emissions for each emission source and compile them to obtain the total Scope 1 emissions for the organisation. This information can be reported in metric tons of CO2e or other relevant units.
It's important to ensure data accuracy by using reliable sources and methodologies for emission factor calculations. Engaging with experts, sustainability consultants, or utilising emission calculation tools and software can assist in streamlining the process and ensuring accurate results.
Regular monitoring and updating of Scope 1 emissions data is essential for tracking progress, setting reduction targets, and implementing effective emission reduction strategies.
How can your business identify its Scope 2 emissions?
Obtain energy consumption data: Gather data on the organisation's energy consumption, including purchased electricity, heat, or steam. This can typically be obtained from utility bills, energy invoices, or energy monitoring systems.
Determine electricity sources: Identify the sources of electricity that the organisation purchases. This may include the grid mix, which can consist of a combination of fossil fuel-based generation (e.g., coal, natural gas) and renewable energy sources (e.g., solar, wind, hydro). It's important to consider the specific characteristics of the electricity sources to accurately determine the emissions associated with the purchased energy.
Gather emission factors: Obtain emission factors associated with the electricity sources. These emission factors represent the amount of greenhouse gas emissions produced per unit of electricity consumed. They can be obtained from publicly available data sources, such as government agencies or industry databases, or from electricity suppliers if they provide emission disclosure information.
Calculate emissions: Multiply the energy consumption data by the corresponding emission factors to calculate the emissions associated with the purchased electricity, heat, or steam. This step converts the energy consumption into carbon dioxide equivalent (CO2e) emissions, allowing for standardised comparison and aggregation of different greenhouse gases.
Summarise and report: Summarise the calculated emissions from purchased energy sources and compile them to obtain the total Scope 2 emissions for the organisation. This information can be reported in metric tons of CO2e or other relevant units.
It's important to ensure data accuracy by using reliable sources for both energy consumption and emission factors. Collaborating with utility companies, engaging with energy consultants, or utilising emission calculation tools and software can assist in streamlining the process and ensuring accurate results.
Regular monitoring and updating of Scope 2 emissions data is essential for tracking progress, setting reduction targets, and implementing effective strategies to reduce the organisation's indirect emissions.
How can your business identify its Scope 3 emissions?
Identifying Scope 3 emissions can be a complex task due to the variety of activities and stakeholders involved. Here are steps your business can take to identify its Scope 3 emissions:
Define the boundaries: Determine the scope and boundaries of the assessment. This involves identifying which activities and emissions sources within the value chain will be included. Considerations should be made for the materiality of the emissions sources and the organisation's ability to influence them.
Categorise emission sources: Scope 3 emissions can be classified into different categories, such as purchased goods and services, business travel, employee commuting, transportation and distribution, waste disposal, and others. Identify the relevant emission sources within each category based on the organisation's operations and value chain.
Engage stakeholders: Collaborate with suppliers, customers, and other relevant stakeholders to gather data on their emissions or activities that contribute to the organisation's value chain. This can involve surveys, questionnaires, or data sharing agreements to collect information on suppliers' emissions or customers' use and disposal of the organisation's products.
Establish data collection methods: Determine the most appropriate methods for collecting data from stakeholders. This can range from direct surveys and questionnaires to utilising industry databases, third-party certifications, or sector-specific reporting frameworks. Encourage transparency and cooperation from stakeholders to ensure accurate data collection.
Calculate emissions: Once the data is collected, calculate the emissions associated with each identified source within the different Scope 3 categories. This may involve using emission factors, economic input-output models, or other calculation methodologies suitable for each emission source.
Summarise and report: Summarise the calculated emissions for each Scope 3 category and compile them to obtain the total Scope 3 emissions for the organisation. This information can be reported in metric tons of CO2e or other relevant units.
It's important to note that the level of detail and accuracy of Scope 3 emissions calculations may vary depending on the availability and quality of data. Collaboration with stakeholders, including suppliers and customers, can help improve data accuracy and provide insights for emission reduction opportunities throughout the value chain.
Regularly monitoring and updating Scope 3 emissions data is crucial for understanding the organisation's carbon footprint, identifying hotspots, and implementing effective strategies to reduce emissions in collaboration with stakeholders.
How can Scope 1 emissions be reduced?
Reducing scope 1 emissions involves taking measures to minimise or eliminate the direct emissions from sources that are owned or controlled by an organisation. Here are some strategies that can be implemented to reduce scope 1 emissions:
Energy efficiency: Improving the energy efficiency of equipment and processes can reduce fuel consumption and associated emissions. This can be achieved through measures such as equipment upgrades, optimising operations, and implementing energy management systems.
Transition to low-carbon fuels: Shifting from high-carbon fossil fuels to low-carbon alternatives can significantly reduce scope 1 emissions. This may involve using cleaner fuels like natural gas instead of coal or adopting renewable energy sources like solar or wind power.
Process optimisation: Analysing and optimising industrial processes can help identify opportunities to reduce emissions. This can involve optimising combustion processes, improving waste management practices, and implementing technologies that minimise emissions during chemical reactions or manufacturing processes.
Fuel switching: In sectors that rely heavily on combustion, such as transportation or heating, switching to cleaner fuels or alternative technologies can be effective. For example, transitioning from gasoline or diesel-powered vehicles to electric vehicles can eliminate tailpipe emissions.
Carbon capture and storage (CCS): Implementing CCS technologies can capture and store carbon dioxide emissions from industrial processes or power generation. This can help mitigate scope 1 emissions by preventing them from being released into the atmosphere.
On-site renewable energy generation: Installing renewable energy systems, such as solar panels or wind turbines, on-site can help reduce reliance on fossil fuel-based electricity and lower scope 1 emissions.
Maintenance and leak detection: Regular maintenance and monitoring of equipment, such as boilers or pipelines, can prevent leaks and minimise emissions of gases like methane, which is a potent greenhouse gas.
It's important for organisations to conduct a thorough assessment of their operations, identify emission sources, set reduction targets, and develop an action plan tailored to their specific circumstances. Engagement of employees in sustainability initiatives can also contribute to successful emission reduction efforts.
How can Scope 2 emissions be reduced?
Reducing scope 2 emissions involves taking measures to minimise or eliminate the indirect emissions associated with the generation of purchased electricity, heat, or steam consumed by an organisation. Here are some strategies that can be implemented to reduce scope 2 emissions:
Energy efficiency and conservation: Improving energy efficiency within the organisation can directly reduce electricity consumption and, consequently, scope 2 emissions. This can be achieved through initiatives such as upgrading to energy-efficient equipment, implementing energy management systems, and promoting energy conservation practices among employees.
Renewable energy procurement: Transitioning to renewable energy sources is an effective way to reduce scope 2 emissions. Organisations can explore options for procuring renewable energy directly from providers or by investing in on-site renewable energy systems like solar panels or wind turbines.
Power purchase agreements (PPAs): Entering into long-term power purchase agreements with renewable energy developers can provide organisations with a stable and predictable supply of renewable energy, helping to reduce reliance on grid-supplied electricity.
Energy attribute certificates (EACs): Purchasing renewable energy certificates or guarantees of origin, such as Renewable Energy Certificates (RECs) or Guarantees of Origin (GOs), allows organisations to claim and track the environmental attributes of renewable energy generation. By buying EACs equivalent to their electricity consumption, organisations can support renewable energy projects and reduce scope 2 emissions.
Green tariffs and utility programs: Many electricity suppliers offer green energy tariffs or programs that allow customers to source a higher percentage of their electricity from renewable sources. Organisations can opt for these programs to ensure a greener energy mix and reduce scope 2 emissions.
Combined Heat and Power (CHP) systems: Implementing CHP systems, also known as cogeneration, can simultaneously generate electricity and useful heat from a single fuel source. This can increase overall energy efficiency and reduce scope 2 emissions.
Energy management and monitoring: Implementing energy management systems and conducting regular energy audits can help identify areas of inefficiency and guide efforts to optimise energy use and reduce scope 2 emissions.
It's important for organisations to assess their energy consumption, understand the sources of electricity, set reduction targets, and develop a comprehensive energy strategy that aligns with their sustainability goals. Collaboration with electricity suppliers, engaging employees, and tracking progress through transparent reporting can enhance the effectiveness of scope 2 emission reduction efforts.
How can Scope 3 emissions be reduced?
Reducing scope 3 emissions involves addressing the indirect emissions that occur in an organisation's value chain, including emissions from purchased goods and services, business travel, employee commuting, transportation and distribution, waste disposal, and more. Given the complexity and variety of scope 3 emissions, here are some strategies that can be implemented to reduce them:
Supply chain optimisation: Collaborate with suppliers to identify opportunities for emissions reductions throughout the supply chain. This can include sourcing materials and components from low-carbon suppliers, encouraging sustainable practices, and promoting the use of environmentally friendly transportation methods.
Sustainable procurement: Implement sustainable procurement practices by considering the environmental impact of purchased goods and services. This can involve choosing suppliers with strong sustainability credentials, favouring products with lower carbon footprints, and selecting materials that are recyclable or made from renewable resources.
Transportation and logistics: Optimise transportation and distribution networks to minimise emissions. This can be achieved through route optimisation, consolidation of shipments, using more efficient vehicles, and exploring alternative transportation methods like rail or sea freight, which have lower emissions compared to air freight.
Employee commuting: Encourage sustainable commuting options for employees, such as carpooling, public transportation, cycling, or telecommuting. Providing incentives or supporting infrastructure for these alternatives can help reduce emissions from employee commuting.
Business travel: Promote virtual meetings and teleconferencing as alternatives to business travel whenever possible. When travel is necessary, encourage the use of more fuel-efficient modes of transportation and consider offsetting the emissions through carbon offset programs.
Waste management: Implement waste reduction and recycling programs to minimise waste sent to landfills. Encourage suppliers to adopt sustainable packaging practices and explore options for composting or using anaerobic digestion for organic waste.
Product use and end-of-life: Design products with a focus on energy efficiency, durability, and recyclability. Provide guidance to customers on the efficient use and maintenance of products to maximise their lifespan. Implement take-back programs or partnerships for the responsible disposal or recycling of products at the end of their life cycle.
Collaborative initiatives: Engage in industry collaborations, such as sector-specific sustainability initiatives or certification programs, to share best practices and drive collective action on reducing scope 3 emissions.
Organisations should conduct a thorough assessment of their value chain, identify high-impact areas, set reduction targets, and collaborate with stakeholders to implement these strategies effectively. Transparency and reporting on scope 3 emissions can also contribute to driving positive change throughout the value chain.