Sustainability and climate action are increasingly important for both companies and consumers. To calculate your own CO2 emissions and develop a reductions strategy, it is important to first understand the different sources of emissions: These are often categorized as either scope 1, scope 2 and scope 3. In this article, you will learn the difference between the emissions scopes and why they are crucial for your company if it wants to actively counteract climate change.
Greenhouse gas emissions, which lead to climate change and damage the environment, are a growing problem. Mitigating the effects of climate change has led to the development of various strategies to control and reduce emissions. Understanding the emission categories scope 1, scope 2 and scope 3, are a key part of an effective climate strategy.
The Greenhouse Gas (GHG) Protocol
The Kyoto Protocol, in which the international community first agreed on binding targets and measures to curb climate change in 1997, forms the basis for the Greenhouse Gas (GHG) Protocol. This is a private set of standards for accounting for and publicly reporting greenhouse gas emissions.
Globally, the standards outlined in the GHG Protocol are the most widely used for companies' carbon accounting. They take international climate policy into account and close possible gaps in national regulations. The GHG Protocol is developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
The greenhouse gases covered by the standard are: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs),perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3). These greenhouse gases are standardized to the global warming potential of CO2, which by definition has a value of 1. We refer to this as the CO2 equivalent, or CO2e. The GHG Protocol defines three emissions scopes to categorize these greenhouse gases.
What are scope 1 emissions?
Scope 1 emissions are direct emissions that originate from sources that a company controls or is responsible for. They are closely linked to internal activities and include various processes that release greenhouse gases.
Combustion in stationary plants: emissions from energy sources (natural gas and other fuels) at company sites
Combustion in mobile plants: exhaust gases produced by the combustion of fuels from the company's own vehicle fleet (cars, trucks, etc.)
Emissions of volatile gases: Leakages, e.g. from air conditioning and cooling systems
Process emissions: gases released from chemical and physical reactions during the manufacturing process and from production facilities
The importance of reducing scope 1 emissions
Reducing scope 1 emissions is important because this can be directly controlled by companies. By implementing more efficient technologies or processes, and switching to renewable energy, it is possible to reduce your company's impact on the climate. This leads to a smaller carbon footprint and could also result in cost savings and a more positive public image.
What are scope 2 emissions?
Scope 2 emissions are indirect emissions caused by the purchase of energy, such as electricity, steam, heating and cooling. These emissions are not generated directly on site, but are the result of activities outside the company's boundaries.
Scope 2 emissions examples
Emissions released through the consumption of purchased electricity, steam, heating and cooling, for example:
Emissions resulting from the generation of district heating purchased by one of the company's office buildings
Emissions from the generation of electricity used by the company for lighting, machinery, equipment and/or electric vehicles
Why it is important to reduce scope 2 emissions
Reducing scope 2 emissions is important to minimize a company's overall impact on the environment. Switching to renewable energy and improving energy efficiency can help reduce your company's carbon footprint and also reduce dependence on fossil fuels. This contributes to slowing climate change, and a company can also benefit from long-term cost advantages.
What are scope 3 emissions?
Scope 3 emissions are indirect emissions that result from activities in a company's value chain but for which it does not directly control. This includes both upstream and downstream activities. Recording them is a difficult and lengthy process, as the entire value chain of a product or service must be considered.
Scope 3 categories and examples
Scope 3 emissions can be divided into 15 categories.
Upstream Activities:
Purchased goods and services
Purchased capital goods
Upstream fuel and energy-related activities
Transportation and logistics (purchased/contracted by the company)
Waste generation
Business travel
Employee Commutes
Leased assets
Downstream Activities:
Transportation and logistics (not purchased/contracted by the company)
Processing of sold products
Use of sold products
Treatment of products sold at the end of their life cycle
Leased assets
Franchises
Investments
The challenge with scope 3 emissions
Because they are outside of their direct control, scope 3 emissions are a challenge for companies to both calculate and reduce. it is essential for companies to collaborate with stakeholders along their supply chain and create incentives for sustainable practices. For example companies could address scope 3 emissions by encouraging suppliers to reduce emissions and promote more sustainable sourcing practices.
Why companies should reduce scope 3 emissions
Knowing your scope 3 emissions is an important part of understanding the overall impact of a product or service on the environment. Companies that focus on reducing scope 3 emissions can better achieve their sustainability goals while also strengthening their resilience. This can also help to increase customer and investor confidence in sustainability efforts.
Sustainability initiatives and targets
Many companies are setting ambitious targets to reduce emissions and pursuing a more sustainable future. These initiatives range from switching to green energy to promoting resource-efficient production processes.
First Climate's consulting team would be happy to advise you individually. Get in touch with us! impact@firstclimate.com
The role of governments and society
Governments play an important role in shaping the framework conditions for reducing emissions. They can promote the transition to sustainable practices through legislation, regulations and incentive programs. At the same time, consumers also help motivate companies to take sustainable measures through their purchasing decisions and environmental awareness. A growing awareness of environmental issues can increase the demand for environmentally friendly products and services.
The future of emissions reductions
The future of emissions reductions lies in the continuous innovation of technologies and business models that promote a sustainable economy. By working together, businesses, governments and society can collectively have a positive impact on our environment.
This requires investing in research and development, promoting circular economy concepts and incentivizing businesses to adopt sustainable practices. If you want to learn more about possible climate strategies for your company and our climate projects, First Climate is your experienced partner. Let's start working together!
6 questions about scope 1, scope 2 and scope 3 emissions
What types of emissions does the scope 1 category include?
The Scope 1 category includes direct emissions from a company's internal activities, such as emissions from production facilities and company-owned vehicles.
What measures can companies take to effectively reduce scope 1 emissions?
What benefits can companies gain from reducing scope 2 emissions?
Why are scope 3 emissions so difficult to capture?
How can consumers motivate companies to focus on reducing their scope 3 emissions?
What financial incentives are available for companies to encourage emissions reductions?
About the Author
Federico Cavallucci is a senior consultant for corporate climate strategies, specializing in carbon accounting and climate target development. With a dedicated focus on the manufacturing and energy sectors, he guides clients through their decarbonization journey, leveraging his expertise to implement sustainable practices and achieve climate goals. Prior to joining First Climate in 2022, Federico served as an environmental specialist at Saipem, where he focused on the company’s decarbonization strategy.
Contact us! impact@firstclimate.com
