What are Scope 1, Scope 2 and Scope 3 Emissions?

Carbon emissions are responsible for 81% of our overall GHG (Greenhouse gas) emissions. To reverse the effect of climate change on the planet, we must focus on reducing our carbon footprint, and businesses will be required to be more transparent about their contribution and their plans to reduce it. To ensure companies are meeting their climate commitments they must report their GHG emissions and these are categorised into three scopes by the GHG protocol corporate standard. 

Scope 1 is classed as ‘direct' emissions. These are the emissions from company-owned and controlled resources. This means any emissions produced by the company itself such as from furnaces, methane emissions in agriculture or company's transportation fuel. Scope 1 can be split up into 4 categories: mobile combustion, fugitive emissions, stationary combustion and process emissions. Mobile combustion is any transportation usage that is owned by the company whereas stationary combustion would be fuels, boilers and heaters. Fugitive emissions are those from GHG leaks such as fridges or pipes. Process emissions are produced from industrial work and on-site manufacturing. 

Scope 2 emissions are ‘Indirect'. This would be emissions generated from energy you buy from a supplier. This would include usage of electricity, heat, steam and cooling – if they are from an external source. These emissions happen because of the company directly but they don't own or have control over the energy source.

Scope 3 covers the remainder of the emissions and are referred to as the ‘Not owned, indirect emissions'. They usually are the largest of company GHG emissions and can account for up to 90% of a business's carbon impact. They can be split up into two categories – upstream which are indirect GHG emissions related to purchased goods/services, and downstream which are linked to sold good/services. A few examples of upstream, Scope 3 emissions would be; waste generated in operations, business travel, employee commuting and bought goods. Whereas downstream examples would be; end of life treatment of sold goods, franchises and investments. 

Currently only scope 1 and 2 are compulsory to report while scope 3, in most cases, is voluntary. The only case in which you must report scope 3 is when disclosing energy use from business travel in rental cars or employee-owned vehicles where they are responsible for buying the fuel. Companies should aim to report all 3 scopes as a way of understanding their own emissions and that of their suppliers.

Companies such as Arla, Brewdog and Tesco are getting ahead of future legislation to understand and address their scope 3 emissions. By tackling the most difficult road block in their path to net zero they will be able to reduce their costs and liabilities in their fight against climate change. Some reports have even suggested that swift action on net-zero can create a boost to profits and lower costs. 

At TCL we can provide experienced support at delivering a carbon, energy, resource management and natural capital management projects to commercial, agricultural and public sector clients.