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Request a demoWhat are Scope 3 emissions?
Greenhouse gas emissions are categorised into three groups or 'Scopes' by the most widely-used international accounting tool, the Greenhouse Gas (GHG) Protocol. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company’s value chain.
Scope 1 | Scope 2 | Scope 3 |
Fuel combustion Company vehicles Fugitive emissions | Purchased electricity, heat and steam | Purchased goods and services Business travel Employee commuting Transportation and distribution (up- and downstream) Investments Leased assets and franchises |
Why should an organisation measure its Scope 3 emissions?
There are a number of benefits associated with measuring Scope 3 emissions. For many companies, the majority of their greenhouse gas (GHG) emissions and cost reduction opportunities lie outside their own operations. By measuring Scope 3 emissions, organisations can:
- Assess where the emission hotspots are in their supply chain;
- Identify resource and energy risks in their supply chain;
- Identify which suppliers are leaders and which are laggards in terms of their sustainability performance;
- Identify energy efficiency and cost reduction opportunities in their supply chain;
- Engage suppliers and assist them to implement sustainability initiatives
- Improve the energy efficiency of their products
- Positively engage with employees to reduce emissions from business travel and employee commuting.
How can my organisation measure its Scope 3 carbon emissions and value chain carbon footprint?
We offer a range of services to help you measure and manage your value and supply chain emissions:
Value and supply chain sustainability
Includes building a low carbon strategy and supplier engagement.
Footprint measurement and analysis
Includes calculation of your organisation or product carbon footprint.
Carbon Trust Standard
Certification for organisations that are reducing greenhouse gas (CO2e) emissions in their supply chains.
To find out more about any of the above, please contact us.
Read more about the Corporate Value Chain (Scope 3) Accounting and Reporting Standard at the GHG Protocol website.
Scope 1 – direct emissions
Scope 1 emissions include direct emissions from the company’s owned or controlled sources. This includes on-site energy like natural gas and fuel, refrigerants, and emissions from combustion in owned or controlled boilers, and furnaces as well as emissions from fleet vehicles (e. g. cars, vans, trucks, helicopters for hospitals). Scope 1 emissions encompass process emissions that are released during industrial processes, and on-site manufacturing (e.g., factory fumes, chemicals).
Unlike direct emissions, the GHG Protocol defines indirect emissions as “a consequence of the activities from the reporting company but occur at sources owned or controlled by another company.” These include Scope 2 and Scope 3 emissions. However, the GHG Protocol makes a clear distinction between the two categories.
Scope 2 emissions – indirect emissions
According to the GHG Protocol, Scope 2 emissions represent one of the largest sources of global greenhouse gas emissions by accounting for at least a third of it. That is why assessing and measuring Scope 2 emissions present a significant emissions reduction opportunity. But what do these emissions include?
Scope 2 emissions include indirect greenhouse gas emissions from purchased or acquired energy, like electricity steam, heat, or cooling, generated off-site and consumed by your company. For example, electricity purchased from the utility company is generated off-site, so they are considered indirect emissions.
However, if your company is for example an industrial facility that generates its energy on-site from owned or controlled sources, the greenhouse emissions associated with the energy generation are classified as direct Scope 1 emissions. The same applies to companies, such as electricity utilities or suppliers, which control their energy generation facilities and sell all their power into the local grid. The greenhouse gas emissions from these generation facilities are reported in Scope 1 emissions.
In
summary, Scope 2 encompasses indirect emissions associated only with the generation of purchased or acquired energy. However, other upstream emissions associated with the production and processing of upstream fuels, or transmission or distribution of energy within a grid, are tracked in Scope 3.