What does scope 1, 2 & 3 actually mean to your business? Our quick guide gives you a breakdown.
January 4, 2023
As businesses attention increasingly turns to becoming more sustainable, carbon emissions and the term Scope 1, 2 & 3 is everywhere. But what do the three scopes mean? Our guide gives you a quick summary to make sense of carbon jargon.
Scope 1: direct emissions
Scope 1 emissions are direct emissions from company-owned and controlled resources. Put simply, they're emissions that are directly released into the atmosphere from your operations. For example, the fuel from a company vehicle, and the processing emissions from on-site manufacturing such as fermentation or the refrigerants in your air conditioning.
Scope 2: indirect emissions
Scope 2 emissions are indirect emissions from the generation of your purchased energy. This is the electricity that keeps your lights on, powers the kettle for a cup of tea and maybe even charges your electric vehicle.
Scope 3: indirect emissions
This is where things get complex. Scope 3 emissions are quite simply all the indirect emissions not included in scope 2 that make up your companies operations. Think everything from how your employees get to work, any business travel they go on all the way to the products and services you buy or sell. It's a long, but crucial list as this is where 60-90% of your emissions come from.
Scope 3 emissions are broken down into upstream and downstream emissions and according to the GHG protocol are separated into 15 categories. Let's dig into the differences.
Upstream activities fall under several categories. Think of these as the emissions from products and services before they get to your facility.
Purchased goods and services includes all the upstream emissions from the things you buy. This can be the products used to create your final product (e.g. raw materials and packaging) as well as other products such as a new laptop or office supplies.
Capital goods are the final products and equipment used to manufacture your companies products, e.g. equipment, machinery, buildings, facilities and vehicles. Companies should record capital goods in the year of purchase, not over a period of time.
Fuel and energy-related activities are the emissions from the production of fuel and energy purchased and consumed by the reporting company. For example, this is the energy losses before you flick on the kettle or the energy required to deliver fuel to a pump.
Transportation and distribution is the emissions from delivering products to your office, warehouse or production facility.
Waste generated in operations relates to the emissions from the things you throw away, recycle or compost.
Business travel the emissions from flights, buses, cars etc for company purposes can often make up a large part of a company's emissions. Employee commuting should also be considered to track the emissions of how your employees get to work.
Transportation and distribution is also included in downstream emissions, this time, it's the emissions from delivering your products to your customers, you can decrease these emissions by using electric vehicles or cargo bikes.
Use of sold products looks at the emissions from how you customers use your products. If you're a brewery this may be the refrigeration required to make your beer extra crisp, if you sell cars it would be the fuel required to make it work.
End of life treatment looks at what happens after your products reach the end of their life. For example, how does a customer dispose of your product based on what it's made from. It's tricky as you can't rely on a customer to dispose of it in the way you want them to so we often use averages here.
Leased assets are complex and relate to upstream and downstream emissions. Examples include the lease of a vehicle or machinery and the emissions from the use of this product.
Why measure scope 3 emissions?
While it may initially seem like a challenge to measure your scope 3 emissions across your value chain, it's a crucial step in your climate journey as it accounts for the majority of your carbon emissions. For Apple, their scope 3 emissions account 99% of their total footprint. If you're a marketing agency it may be greater than 90%.
Zevero have made it easier for companies to understand where their emissions come from and put in place a plan to reduce them. Are you ready to join leading companies and start your climate journey?