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Scoping it out: what are Scopes 1, 2 and 3?
What do these terms mean, and how do they differ?

Context

In the world of carbon measurement and accounting, the terms 'Scope 1, 2 and 3' are seemingly ubiquitous and often bandied about with little explanation. This is a problem, because the distinction between them is crucial when calculating and reducing business emissions in line with scientific standards (see the aklimate blog post on Carbon Neutral and Net Zero for more on this). The following article covers the definitions of Scope 1, Scope 2 and Scope 3, and the differences between them.

Greenhouse Gas Protocol infographic on the different emission 'scopes'

Summary

In brief, as defined by the GHG Protocol, the three ‘Scopes’ that emissions fall into are as follows:

  • Scope 1: Direct emissions from activities under the organisation's control, such as gas heating, fleet vehicles.
  • Scope 2: Indirect emissions from electricity purchased by the organisation.
  • Scope 3: All other indirect emissions, including: purchased goods & services, business travel, commuting, waste, use of products, distribution, investments, leased assets and franchises.

aklimate Summary Table

Additional Information

Scope 1

Scope 1 emissions are the direct emissions caused by resources controlled by the company. These are divided into four categories:

  • Stationary combustion includes all fuels and heating sources (e.g. gas boilers)
  • Mobile combustion concerns all vehicles owned or controlled by a firm, burning fuel (e.g. company cars and vans).
  • Fugitive emissions refers to the leakage of greenhouse gases (e.g. refrigeration, methane pipes).
  • Process emissions are released during industrial processes, and on-site manufacturing (e.g. production of CO2 during brewing, creating fertiliser, making cement)

Scope 2

Scope 2 emissions refer to the indirect emissions that are released into the atmosphere as a result of the consumption of purchased electricity (and heat and cooling). For most organisations, electricity will be the most important, or only, source of Scope 2 emissions.

Scope 3

Scope 3 emissions cover all indirect emissions, not included in Scope 2, that occur in the value chain of the reporting company, including both upstream and downstream emissions. In other words, all the emissions that are linked to the company’s operations that are not directly controlled by the organisation. This includes the entirety of a business' supply chain. The GHG Protocol, to which the aklimate methodology is aligned, separates Scope 3 emissions into 15 categories. Some of the most important are as follows:

Upstream:

  • Business Travel
  • Employee Commuting
  • Purchased Goods & Services
  • Operational Waste

Downstream:

  • Use of Sold products
  • End of Life of products
  • Investments
  • Leased Assets

Why is Scope 3 so important?

In the vast majority of businesses, emissions along the value chain represent by far the biggest source of greenhouse gases. At Mastercard for example, Scopes 1 and 2 combined have only constituted between 5% and 10% of the overall company footprint over the last 5 years. Similarly, the below diagram highlights the huge importance and significance of Scope 3 to overall emissions of Microsoft, as per their 2020 Sustainability Report:

Given the relative importance of Scope 3, all of our measurement and reduction pathways highlight and focus on Scope 3, ensuring our customers will have a genuine climate impact. Be wary of the many calculators you can find online that will only consider Scopes 1 and 2, thus ignoring and neglecting the majority of an organisation's impact. Get in touch with aklimate today, if you have any questions, or if you would like to measure and reduce the Scopes 1, 2 and 3 of your business, and thus consider the full picture when it comes to your carbon emissions.

Useful Resources:

GHG Protocol FAQs

GHG Protocol Diagram

Microsoft Sustainability Report 2020 (esp. pp 16-17)

Mastercard Sustainability Report 2020 (esp. pp 26-43)

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