What Are Scope 1, Scope 2, and Scope 3 Emissions?

What Is the Greenhouse Gas (GHG) Protocol?

The Greenhouse Gas (GHG) Protocol is an internationally recognized accounting tool designed to help businesses, governments, and other organizations understand their GHG emissions. It provides a consistent framework for measuring and reporting greenhouse gas emissions that organizations of all sizes can use. 

The GHG Protocol defines four scopes of emissions: Scope 1 (direct emissions), Scope 2 (indirect emissions from the generation of purchased electricity, heat, and cooling consumed by the organization), Scope 3 (other indirect emissions resulting from activities of the organization but occurring at sources owned or controlled by another entity) and GHG removals (activities that permanently remove GHGs from the atmosphere). 

The Greenhouse Gas Protocol (GHGP) covers six key greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbon (PFCs) and sulphur hexafluoride (SF6). 

Carbon dioxide is the most common of these gases and has been produced in large amounts due to human activities such as burning fossil fuels. Methane is released through natural processes like agriculture, waste management, and landfills, while fertilizers and other industrial processes can emit nitrous oxide. 

Hydrofluorocarbons are synthetic compounds used in refrigerants and aerosol cans, while perfluorocarbons and sulfur hexafluoride are produced by industrial processes. All six of these gases have been identified as having an impact on climate change, so organizations need to track their emissions to reduce their environmental impact.

The Protocol was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), with sector guidance from partner organizations. The Protocol is now accepted as a global standard, adopted by governments, businesses, civil society, international organizations, and financial institutions worldwide.

Scope 1: Direct Emissions

The first among 3 emissions, Scope 1 emissions, are direct greenhouse gas (GHG) emissions that arise from sources owned and operated by the organization, such as fuel combustion in vehicles or machinery. These emissions can be reduced through initiatives such as more efficient engines, renewable energy use, and improved fuel switching. 

Natural gas is a Scope 1 emission. This means that it is an emissions source directly released by an organization or facility. Natural gas combustion releases carbon dioxide, methane, nitrous oxide, and other air pollutants into the atmosphere. 

Therefore, organizations must track their Scope 1 emissions from natural gas use to accurately report their total emissions. Additionally, organizations should strive to reduce their natural gas use to reduce greenhouse gas emissions released into the atmosphere. 

By implementing efficiency measures and transitioning to renewable energy sources when possible, organizations can take meaningful steps towards reducing their Scope 1 emissions from natural gas use.

Organizations can also work with suppliers to reduce Scope 1 emissions along their value chain. To measure these emissions, organizations need to understand their energy consumption and the sources of their fuels. 

They should also consider monitoring air pollutants such as nitrogen oxides (NOx) or particulate matter (PM). Verifying Scope 1 emissions requires organizations to collect high-quality data from all relevant sources and develop detailed records. 

Organizations need to track scope 1 emission factors over time to measure the progress of their efforts and understand the impact of any changes implemented. This will help inform strategies for further reducing Scope 1 emissions. Organizations should also consider engaging stakeholders (such as employees or members of the public) to gain additional insights and feedback on the success of their GHG reduction initiatives.

Scope 2: Indirect Emissions – Owned

Scope 2 covers emissions from the consumption of energy purchased by an organization for its own use. This includes electricity, heat, and steam from sources owned by another entity (such as power plants, natural gas processors, and water boilers). It can also include other non-electrical purchased energy, such as fuel for transportation and other activities. It’s important to note that Scope 2 only covers emissions from energy purchased by an organization and does not include any of the company’s production activities, which are considered Scope 3 emissions

To track a company’s emissions under Scope 2, it is essential to map out the energy sources used. This includes understanding where the energy comes from and what fuels produce it. 

It also requires collecting data on how much energy is purchased and information about the various emissions factors associated with each source (e.g., the amount of CO2 emitted per unit of electricity consumed). The emissions from each source can then be combined to get a total Scope 2 emissions figure. 

Organizations can also take steps to reduce their Scope 2 emissions by switching to renewable energy sources or purchasing more efficient equipment and technologies that use less energy. Other strategies, such as joining a green power program or participating in carbon offset projects, are also available. Ultimately, by understanding and managing their Scope 2 emissions, organizations can make progress toward achieving their sustainability goals.

Companies must report their Scope 1 and 2 emissions under the Global Reporting Initiative (GRI) Standards. The GRI is a set of voluntary sustainability reporting guidelines that guide companies on how to disclose information about their environmental, social, and economic performance. 

Companies must report all direct and indirect greenhouse gas emissions to meet the requirements of the GRI Standards. Companies may also need to report additional indirect emissions, known as Scope 3 emissions, depending on their business activities and operations.

Scope 3: Indirect Emissions – Not Owned

Scope 3 emissions, also known as indirect emissions, are those resulting from activities related to the production of a company’s goods and services. This includes the emissions arising from the use of purchased electricity and heat, upstream transport of materials and fuels by suppliers, business travel, and employee commuting. 

These indirect emissions account for up to 80% of total greenhouse gas emissions for many organizations. Net zero targets include Scope 3 emissions and Scopes 1 and 2. To effectively manage Scope 3 emissions, companies must assess the sources of their indirect emissions and develop strategies to reduce them. 

Organizations can take numerous approaches to reduce their Scope 3 greenhouse gas emissions. These strategies range from switching to renewable electricity and fuels, improving energy efficiency in buildings and equipment, cutting down on travel, and reducing waste and packaging. 

Companies can also work with their suppliers to reduce the GHG emissions associated with the transportation of goods and materials or take steps to encourage employee commuting by public transport, cycling, car share programs, and other green alternatives. Furthermore, they can offset their Scope 3 emissions through carbon credits or other approaches.

Scope 3 emissions are not mandatory to report, though there are many benefits in doing so. By tracking and reporting Scope 3 emissions, businesses can better understand their company’s carbon footprint and overall impact on the environment and identify potential areas for improvement. Additionally, by reducing Scope 3 emissions, organizations can set an example for other businesses and demonstrate their commitment to sustainable practices. 

However, reporting Scope 3 emissions may also be a requirement in certain jurisdictions and sectors, such as those involved in government contracting or international agreements. Ultimately, the decision to report on Scope 3 emissions should involve careful consideration of the potential benefits and costs associated with doing so.

The question of whether companies should be responsible for Scope 3 emissions is a contentious one. On the one hand, some believe that companies should take responsibility and commit to reducing their overall carbon footprints. 

This view is based on the notion that corporate social responsibility entails taking action to mitigate environmental and climate impacts through various strategies like green energy investment, process improvements, and sustainable supply chain management. 

On the other hand, some argue that companies should not be held responsible for Scope 3 emissions. They point to factors such as the distance of suppliers from production sites, varying levels of corporate influence on suppliers’ emissions, and uncertainties about the cost-effectiveness of interventions at a local level as reasons why companies should not be held financially responsible for Scope 3 emissions. 

Ultimately, it is up to companies and stakeholders alike to understand the implications of Scope 3 emissions and determine how best to address them. Companies can take proactive steps, such as setting climate-related targets and investing in renewable energy projects. At the same time, stakeholders can encourage businesses to reduce their carbon footprints by voting with their wallets and supporting companies that practice sustainability. By taking collective responsibility, we can create a more sustainable future for all.

What the GHG Protocol Requires Your Company To Do

The GHGP covers all aspects of handling, packaging, labeling, transport, storage, and disposal of hazardous materials that are traded internationally. It also provides specific risk assessment and management guidance for safely handling hazardous materials. 

Additionally, it provides guidance on emissions reduction, waste minimization, and recycling to minimize the environmental impact of hazardous materials. By providing these standards and protocols, the GHGP helps ensure that global trade is conducted ethically while protecting people and the environment.

The GHG Protocol requires your company to conduct an inventory of its GHG emissions, measure progress towards reducing those emissions, and set improvement targets. Companies must also create a plan to offset any remaining emissions that cannot be reduced. This involves identifying which activities emit the most carbon and setting goals for reducing them.

To conduct an inventory of GHG emissions, your company must first calculate its baseline emissions. This involves collecting data from various sources, such as fuel consumption, electricity usage, and waste disposal. Baseline calculations must include data from the past three years to be considered complete.

Scope 1 GHG Protocol is a set of standardized guidelines for measuring and reporting organizational greenhouse gas (GHG) emissions. The protocol provides guidance on calculating, verifying, reporting, and managing Scope 1 emissions — the direct GHG emissions associated with an organization’s operations.

Once your company has calculated its baseline emissions, it can begin setting reduction targets. These goals should be based on the company’s specific circumstances and can be informed by prior carbon reduction experience or best practices in the industry. Companies should also set reporting goals to ensure that progress is being made toward achieving the targets.

In addition to reducing their GHG emissions, companies may consider offsetting any remaining emissions that cannot be reduced. Offsetting involves investing in projects that reduce GHG emissions elsewhere. Examples of offsetting activities include the installation of solar panels and the planting of trees.

The GHG Protocol Corporate Standard requires organizations to consistently measure, report, and manage their greenhouse gas (GHG) emissions. The standard covers both direct and indirect emissions, which include Scope 1 (direct), Scope 2 (indirect electricity), and Scope 3 (other indirect).

By complying with the GHG Protocol, your company can demonstrate its commitment to sustainability and help create positive change in the world. The process requires careful planning and implementation but can ultimately lead to a more sustainable future for everyone.