Climate Essentials

What are Scope 1, 2, 3 emissions?

Renaud BettinVP Climate Action & Sales Enablement
Climate Essentials
04 September 2023

Taking impactful climate action begins with emissions measurement – and it's vital to include all three scopes. We explain what each of them encompasses and how to measure them.

To get a complete picture of your carbon footprint, you need to measure both direct and indirect emissions encompassing Scope 1, 2, and 3. Scopes classify emissions sources into three categories: direct emissions, indirect emissions from energy consumption, and indirect emissions from your entire value chain.

Calculating Scope 3 emissions is essential for you because they frequently constitute the largest portion of your company's carbon emissions, reflecting the broader environmental influence of your entire value chain. According to data from the Carbon Disclosure Project (CDP), they can be as much as 11.4 times greater than the emissions generated by your own operations.

Greenhouse gases 

Before we delve into the three scopes, let's take a moment to understand what lies at the heart of all of them – greenhouse gases. These gases are a group of naturally occurring and man-made compounds in Earth's atmosphere that have the property of trapping heat from the sun. They include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and water vapor (H2O). For ease, we’ll use just one unit to encompass all these gases – tonnes (t) of carbon dioxide (CO2) equivalent (e) (tCO2e).These gases play a crucial role in maintaining the planet's temperature, but an excess of certain greenhouse gases, primarily from human activities like burning fossil fuels and deforestation, has led to enhanced greenhouse effect and global warming, resulting in climate change and the measurement of individual or organizational environmental impact often referred to as 'carbon footprints.' It’s also important to note that these gases have different lifecycles in the atmosphere and different powers of warming.

The GHG Protocol

The categorizations of scope 1, 2, and 3 emissions were established within the Greenhouse Gas Protocol (GHG Protocol), a global standard for computing greenhouse gas emissions. Nearly every corporate sustainability reporting initiative worldwide relies on the GHG Protocol as its foundation.

Scope 1 Emissions: Direct emissions

Scope 1 emissions encompass the direct greenhouse gas emissions that originate from your owned or controlled sources. These sources typically include on-site combustion of fossil fuels like natural gas for heating, vehicles powered by diesel or gasoline, and industrial processes such as chemical reactions that release emissions into the atmosphere. In essence, Scope 1 emissions are the "in-house" carbon footprint, directly linked to an organization's operations.

For many organizations, Scope 1 emissions represent a critical starting point in their emission reduction journey. Taking control of these direct emissions can lead to immediate impact and positive change. Reducing Scope 1 emissions often involves adopting cleaner energy sources, enhancing energy efficiency, and optimizing industrial processes to minimize emissions at their source.

How to measure Scope 1 emissions

To calculate Scope 1 emissions accurately, use direct data where possible. For instance, for on-site combustion, quantify the amount of fuel consumed and apply appropriate emission factors that reflect the type of fuel and combustion efficiency.

Scope 2 Emissions: Indirect emissions

Moving beyond direct emissions, Scope 2 emissions encompass the indirect greenhouse gas emissions associated with purchased energy, primarily the electricity consumed. While these emissions occur off-site at facilities operated by utility companies, they are a result of energy consumption driven by an organization's activities. Scope 2 emissions offer a lens into the environmental impact of an organization's energy consumption, including both renewable and non-renewable sources.

Scope 2 emissions are categorized into two subcategories: Location-based and Market-based. Location-based emissions are determined by the average emissions of the energy mix supplied by local utilities. In contrast, Market-based emissions consider the actual emissions generated by the energy consumed, including any renewable energy certificates or offsets purchased. This distinction reflects an organization's commitment to utilizing cleaner energy sources and its role in supporting the growth of renewable energy infrastructure.

How to measure Scope 2 emissions

To calculate Scope 2 emissions accurately, obtain your energy consumption data and determine the emissions associated with the energy mix provided by your local utility.

Scope 3 Emissions: Indirect value chain emissions

Scope 3 emissions extend the environmental lens beyond an organization's immediate operations and energy consumption. These emissions encompass a broad array of indirect impacts occurring throughout an organization's value chain – from production and distribution to product use and disposal. While often the most challenging to quantify, Scope 3 emissions account for the majority of a company's carbon footprint, highlighting the interconnectedness of sustainability efforts across industries and sectors.

Scope 3 emissions fall into two main categories: upstream and downstream emissions, further divided into 15 specific sources. Upstream emissions originate before goods or services reach your organization and encompass extraction, manufacturing, and supply chain transport emissions. Downstream emissions occur after product or service use and include customer use, end-of-life treatment, distribution, franchises, leased assets, and investments. This breakdown helps identify emission hotspots, enabling strategic carbon footprint reduction and sustainability decisions.

Understanding and managing Scope 3 emissions require collaboration and engagement with suppliers, customers, and other stakeholders. Initiatives like supply chain optimization, circular economy practices, and sustainable product design can significantly influence Scope 3 emissions, fostering positive change throughout the value chain.

How to measure Scope 3 emissions

The measurement of Scope 3 emissions is more complex, as it involves stakeholders from across your entire value chain. Begin by identifying the various categories of Scope 3 emissions applicable to your organization, such as purchased goods and services, business travel, and employee commuting. Collect data from suppliers, distributors, and other relevant stakeholders to quantify these emissions, and consider utilizing industry-specific emission factors for accurate calculations.

Find out more about Scope 3 emissions measurement.

A holistic approach to carbon emission management

When it comes to emission management and sustainability, it's crucial to recognize that the three scopes are interconnected. Organizations cannot holistically address their carbon footprint by focusing solely on one scope while neglecting the others. Each scope plays a distinct role in portraying the environmental impact of an organization, and a comprehensive approach is necessary to drive effective change.

Reducing carbon emissions

Once you have conducted your carbon inventory and measured your carbon emissions across all three scopes, the next step is implementing an impactful reduction strategy, which includes effective target setting.

Find out more about creating an impactful reduction strategy with our dedicated guide. 

To conclude

Measuring and understanding greenhouse gas emissions across all three scopes is the crucial first step in taking effective climate action. While Scope 1 addresses direct emissions, and Scope 2 deals with indirect emissions from energy consumption, it's Scope 3 that often constitutes the largest part of an organization's carbon footprint – and this is a shared responsibility. Collaborative efforts and holistic strategies that encompass all three scopes are essential to meaningfully reduce emissions and drive sustainability. By setting impactful reduction targets, organizations can contribute significantly to combating climate change and building a greener future.

Want to learn more about how to get started with carbon measurement? 

Contact us directly for support from our expert team. 

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