Module 2: Emission Scopes

NetNada Climate Academy

2.1 Scope 1

Now that we've delved into the fundamentals of what carbon accounting is, let's navigate through the different emissions scopes of a company. At first glance, adding up all the emissions from a company seems pretty tough. I mean, you've got emissions from using electricity, burning fuel in company cars, leaks from fridges and ACs, emissions from tossing out rubbish, and even from the snacks in the office. How are we supposed to keep track of all that at once? 

Well, the GHG Protocol Corporate Standard classifies a company’s GHG emissions into three ‘scopes.’ You can think of these scopes as buckets.

Scope 1 emissions are direct emissions from sources that are owned or controlled by the reporting company. These emissions typically result from activities such as combustion of fossil fuels in company-owned vehicles, boilers, furnaces, and other equipment. Examples of scope 1 emissions include:

  • Combustion of natural gas for heating
  • Emissions from company-owned vehicles
  • Emissions from onsite industrial processes

Identifying and quantifying scope 1 emissions is relatively straightforward since they originate from sources directly under the company's control.

2.2 Scope 2

Scope 2 emissions are indirect emissions associated with the consumption of purchased electricity, steam, heat, or cooling. While these emissions are not generated on-site, they result from the production of energy consumed by the reporting company. Scope 2 emissions are often categorised into four types:

  • Electricity: This includes energy used to power lighting, machinery, heating, and cooling systems within the company's facilities.
  • Steam: Generated from boiling water, steam is utilised in various industrial processes.
  • Heat: Heat is necessary for maintaining interior climates and heating water in commercial or industrial buildings.
  • Cooling: Cooling systems, whether powered by electricity or other means, are essential for regulating temperatures in buildings and industrial processes.

Quantifying scope 2 emissions requires obtaining data from energy providers or utility bills and applying relevant conversion or emissions factors to calculate the carbon footprint associated with purchased energy consumption. We’ll delve into emissions factors in a later module.

2.3 Scope 3

Scope 3 emissions are all indirect emissions (not included in scope 1 or 2) that occur in the supply/value chain of the reporting company, including both upstream and downstream emissions. Upstream emissions are associated with the production of your business’s products, while downstream emissions arise from their use and disposal.

Developing a complete GHG emissions inventory – incorporating scope 1, scope 2, and scope 3 emissions – enables companies to understand their total value chain emissions and to focus their efforts on the most significant GHG reduction opportunities.

Many companies worldwide are accounting and reporting their scope 1 and 2 emissions. However, many have not realised the GHG protocol now includes scope 3 - arguably the most important scope because emissions from the value chain are usually the majority of a company’s emissions. They account for 5.5 times more on average than a company’s direct emissions.

The GHG value chain protocol categorises scope 3 emissions into 15 distinct categories. The categories are intended to provide companies with a systematic framework to organise,  understand, and report on the diversity of scope 3 activities within a corporate value chain. The categories are designed to be mutually exclusive, such that, for any one reporting company, there is no double counting of emissions between categories. Each scope 3 category comprises multiple scope 3 activities that individually result in emissions. These categories include:

  1. Purchased goods and services
  2. Capital goods
  3. Fuel- and energy-related activities
  4. Upstream transportation and distribution
  5. Waste generated in operations
  6. Business travel
  7. Employee commuting
  8. Upstream leased assets
  9. Downstream transportation and distribution
  10. Processing of sold products
  11. Use of sold products
  12. End-of-life treatment of sold products
  13. Downstream leased assets
  14. Franchises
  15. Investments

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About the Course

Afonso Firmo

Environmental Engineer

These self-paced modules are designed to provide you with a comprehensive understanding of carbon accounting in the context of business.

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Introduction to Carbon Accounting

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