Renewable Energy & Cleantech

Organizations worldwide have been inspired to pursue a resilient recovery and accelerate decarbonization. Whether your organization is new to carbon reduction or far along its sustainability journey, it’s essential to have a thorough understanding of the emissions scopes to effectively reduce your company’s carbon footprint. As your company navigates its strategy for long-term success, consider how reducing emissions from each scope can uniquely contribute to a resilient and sustainable future.

Emissions Scopes Defined

The Greenhouse Gas (GHG) Protocol Corporate Standard—developed jointly by WRI and the World Business Council on Sustainable Development (WBCSD)—is the customary tool for the worldwide accounting of GHG emissions produced by organizations. The collective emissions of a company, generally known as its carbon footprint, are determined by applying a variety of emission factors (multipliers based on the global warming potentials of GHGs) to the organization’s emissions-producing activities.

All emissions that contribute to an organization's carbon footprint are categorized based off of the source. These categorizations are known as the emissions 'scopes'.

The GHG Protocol recognizes an organization’s emissions-producing activities as either direct or indirect. Direct emissions originate from sources owned or controlled by the reporting entity, such as a headquarters facility. Indirect emissions result from a company’s activities but occur at sources that the company neither owns nor ultimately controls, such as a utility or on an airline.

The Protocol further categorizes direct and indirect emissions into three different scopes:

• Scope 1: All direct emissions.
• Scope 2: Indirect emissions from purchased electricity, heat, or steam.
• Scope 3: Other indirect emission sources.

Let’s take a closer look at each scope… 

Scope 1 Emissions

Scope 1 encompasses all direct emissions that result from a company’s operations. These include emissions under a company’s control such as onsite fuel combustion, company-owned vehicles and in-house processing equipment.

Because these emissions are within a company’s direct purview, Scope 1 can be a good place to start when beginning a carbon-reduction journey. Scope 1 can be addressed using a variety of activities. Efficiency upgrades and optimization are a great first step for reducing a company’s controlled emissions on the demand side. Upgrading old equipment to more efficient models, performing LED lighting retrofits and using data-management software that helps monitor and improve the efficiency of operations can reduce the total volume of Scope 1 emissions.

Switching fuels can also be an appropriate mitigation measure, as there may be lower carbon fuels available to replace those currently used. For instance, coal emits more than 200 pounds (90.7 kg) of carbon dioxide per million BTUs compared to natural gas’ 117 pounds (53 kg).  Biofuels emit even less and renewable natural gas is an emerging option for a carbon-neutral energy source.

With today's technologies, no company can completely avoid direct emissions. To address those direct emissions that cannot be avoided, companies can use carbon offsets (also known as verified emissions reductions). Carbon offsets are generated from a variety of activities that reduce the volume of GHG emissions entering the atmosphere, prevent emissions from entering the atmosphere in the first place or remove GHG emissions from the atmosphere entirely. Common project types include landfill gas capture, forestry and fuel switching in favor of less carbon-intensive alternatives.  When paired in a 1:1 ratio with direct Scope 1 emissions, the carbon offset effectively neutralizes the environmental impact of the GHG.

For detail on carbon offsets, download our whitepaper Moving Organizations to Carbon Neutrality: The Role of Carbon Offsets.

Scope 2 Emissions

Scope 2 includes all indirect GHG emissions that result from purchased and consumed electricity, heat, steam or cooling.

Though these emissions physically occur at the third-party facility where the electricity is generated, they are driven by (and therefore attributable to) the end user that consumes the energy.  Purchased indirect energy consumption is a distinct category from other indirect emissions because it often represents a considerable portion of a company’s footprint.

Although indirect, Scope 2 emissions are becoming increasingly controllable by companies via renewable energy procurement and therefore represent a significant opportunity to make reductions.

Organizations can use a combination of energy attribute certificates (EACs), onsite renewable energy (sometimes known as distributed generation), power purchase agreements (PPAs), green tariffs, and even carbon offsets in some cases to address Scope 2 emissions. A record-breaking number of companies worldwide have set aggressive SBTs and RE100 renewable energy procurement targets in order to fully mitigate the emissions impact from their purchased, indirect energy.

For more guidance on clean energy and emissions reductions, as well as what you need to know about making claims, see this whitepaper.

Scope 3 Emissions

Scope 3 emissions are more nuanced, as they broadly represent all other indirect emissions from value chain activities. These emissions occur as a result of a company’s operations but are produced from sources neither owned nor controlled by the company. Examples include emissions generated by suppliers, employee commute and business travel, and landfill waste disposal.

Scope 3 reductions can take many forms: replacing business travel with virtual meetings or investing in less GHG-intensive travel options; reducing materials and resources consumed, and sustainably sourcing those that are consumed; implementing zero-waste policies and practices; favoring more sustainable suppliers; and engaging key suppliers on improving their own carbon footprint through efficiency measures, resource reductions, and renewable and clean energy procurement. Like Scope 1, unavoidable Scope 3 emissions may be remedied through the purchase of carbon offsets.

Companies that successfully engage their stakeholders and take action to address Scope 3 emissions are well-positioned to assert leadership in GHG management.

See our blogs How to Calculate Scope 3 Emissions and How to Reduce Scope 3 Emissions for more detailed guidance.

Managing your organization’s carbon footprint is not only good for the environment; it is also a way build back with resilience while reducing risks and creating new business opportunities. Corporate carbon accounting gives companies a full view of their operations, creates transparency along the corporate value chain, and allows for informed decision making on sustainability matters, while clean energy supply can help companies improve their resiliency and address unavoidable emissions.

Are you looking to calculate, reduce, or report your scope emissions?  Contact us to learn more and accelerate your decarbonization journey.