What Are Scope 1, 2 & 3 Emissions? How Can Companies Measure Them?

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One of the greatest known threats to our environment is the release of greenhouse gases (GHGs).

Large emissions of GHGs such as carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O), trap heat in the atmosphere, leading to global warming.

Companies across the world are under increasing pressure to measure their own emissions so they can find ways of bringing them down, with the ultimate aim of eliminating them all together and achieving net zero.

Sources of emissions

When companies’ emissions are measured and analysed, they are said to be assessed within three different ‘scopes’.

This is how the Greenhouse Gas Protocol – the global greenhouse gas accounting standard – categorises the different emissions produced by a company’s activities and its wider value chain, including its suppliers and consumers.

The Greenhouse Gas Protocol states: “Developing a full [greenhouse gas] emissions inventory – incorporating Scope 1, Scope 2 and Scope 3 emissions – enables companies to understand their full value chain emissions and focus their efforts on the greatest reduction opportunities”.

Examples of scopes 1, 2 and 3

Scope 1 covers emissions that a company owns or controls directly, such as the amount of fuel burned by its own fleet of vehicles.

Scope 2 covers indirect emissions, which means that they are a consequence of the company’s activities, but do not occur from sources owned or controlled by that company. For example, the electricity or energy it buys for heating and cooling buildings, which is produced on its behalf.

Scope 3 also covers indirect emissions, but this includes emissions that occur in a company’s value chain, outside of its own operations. For example, emissions that are produced when suppliers produce raw materials, or when consumers buy or dispose of a product.

Why do we need to measure emissions?

The GHG Protocol helps government and business leaders to understand, quantify and measure greenhouse gas emissions (GHG).

Calculating scope 1, 2 and 3 emissions enables a company to get a true picture of the impact their activities – and those of their suppliers and consumers – are having on the environment.

After first dividing the emissions into the three scopes, the calculations are then used to make a company footprint.

This enables a business to find out where the emission hotspots are across their value chain, so they can prioritise reduction strategies.

This calculation can also be used to determine the amount of carbon offsets to purchase in order to achieve carbon neutrality.

How are emissions calculated?

A greenhouse gas (GHG) inventory is a document that lists the quantities of GHG emissions from a business over a year.

It can also apply to the emissions produces over the lifecycle of a product – from its design to end-of-life waste processing.

GHG emissions are expressed as tCO2e. This stands for tonnes (t) of carbon dioxide (CO2) equivalent (e).

Carbon dioxide equivalent is a standard unit for counting GHG emissions, regardless of whether they’re from carbon dioxide or another gas, such as methane.

Because CO2 is the main culprit when it comes to human-induced climate change, every GHG is translated into a CO2 equivalent. This translation is based on the global warming potential (GWP) of a given GHG. The higher the GWP of a given GHG, the higher the greenhouse gas effect caused by that GHG.

For example:

Let’s say a business’s sustainability manager wants to measure the greenhouse gas impact from heating the office space and running a fleet of five vehicles, which uses 5,000 litres of diesel fuel each year.

The emission factors associated with burning diesel are calculated as 2.66kg CO2e/litre.

From this, the sustainability manager can estimate the GHG emissions associated with heating the office space and running the five vehicles, as follows:

(5000 + 5000) x 2.66 = 26,600 kg CO2e/year

If a business is calculating scopes 2 and 3 – which are indirect emissions – they will need to gather supplier-based data to track the individual emissions from suppliers, then use that data to estimate how much is from activities related to the business.

What impact will calculating scopes 1, 2 and 3 have on a business?

Calculating emissions along the value chain is key to any business’s sustainability strategy.

There is no one-size-fits-all approach, as every business will have different suppliers, different products or services, and emit different amounts of GHGs.

Working from data specific to your business means a sustainability manager or consultant can make accurate calculations as to where the emission hotspots are and prioritise where changes need to be made.

For example, scope 3 emissions may show that a particular supplier is raising the business’s emissions due to a particular activity.

The sustainability consultant can recommend that the activity itself be changed to an alternative which produces lower emissions, or that a new supplier is found.

Changes to business activities, including the measurement of emissions, requires research, development and innovation. This can drive up business costs in the short to medium term, while the business adjusts.

But with pressures from government, consumers, competitors and investors – and a race to net zero – no business can afford to ignore the issue.

With the right attitude and combination of skills and knowledge obtained from the IEMA’s range of environmental management courses, any business can use scope 1, 2 and 3 calculations to its advantage, to become greener, more competitive, enhancing both reputation and profitability.

Picture of Matthew Channell
Matthew Channell
Matthew is TSW Training’s Commercial Director. He writes about performance focussed learning, leadership, and management approaches that have real-world, sustainable impact.
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