Why does my business need to measure its scope emissions?

Globally, concerns about the potential threats of climate change to societies is continuing to rise. Many governments, companies and other organisations are seeking to reduce their greenhouse gas emissions and carbon footprint. Measuring, reporting and assessing Scope 1, 2 and 3 emissions is a useful way for companies to reduce their environmental impact, find carbon hotspots and save money. When greenhouse gas emissions are categorised into different scopes, it enables organisations to better understand where their emissions come from across their value chain which, in turn, can help them focus their efforts on the greatest reduction opportunities.

 

What are Scope Emissions?

Scope emissions are a way of categorising the different types of greenhouse gas emissions that an organisation generates. They were first designed/developed and defined in 2001 by the Greenhouse Gas Protocol, which supplies the world's most widely used greenhouse gas accounting standards. Today, scope emissions are the basis for mandatory greenhouse gas emissions reporting across the UK.

 

What are Scope 1, 2 and 3 Emissions?

Scope 1 emissions are those released from sources owned or directly controlled by an organisation. These result from activities such as running machinery to produce goods or burning fuel when driving company vehicles.

Scope 2 emissions refer to an organisation's indirect emissions from the generation of purchased energy. This includes emissions released from the generation of electricity that an organisation purchases, for example to heat and light their buildings.

Scope 3 emissions include all other greenhouse gas emissions associated, not with the organisations itself, but with other entities that it interacts with within its wider value chain. They may sometimes be referred to as value chain emissions.

Scope 3 emissions can be separated into two categories – ‘upstream' and ‘downstream'. Upstream emissions are those related to the goods and/or services that the company use. Examples include greenhouse gas emissions from the production of purchased raw materials, waste generation in operations and employee commuting. Downstream emissions are linked to sold goods and/or services. They include emissions released from the transportation, use and end of life treatment of sold products, as well as from franchises and investments.

For the majority of companies, Scope 3 emissions account for over 70% of the company's total emissions. Failure to report these emissions is therefore likely to construct inaccurate pictures of an organisation's emissions profile as well as our susceptibility to climate change risks.

 

Monitoring Scope Emissions

Typically, compared to scope 1 and 2, scope 3 emissions are the most difficult category of greenhouse gas emissions to track, measure and address. For scope 1 and 2, a company will likely have the source data required to estimate their direct emissions and convert purchases of energy, including gas and electricity, into a value in tonnes of greenhouse gases. Meanwhile, Scope 3 emissions require companies to track activities up and down their entire value chain, from suppliers to end users, and companies are less likely to have the precise oversight of all emissions from the operations of all their suppliers and consumers. Nevertheless, multiple standards have been developed to help guide organisations to account for all their Scope 3 emissions, e.g. SBTI (Science Based Targets Initiative).

Tomson Consulting provide support and advice on how your company can achieve standards such as SBTI and give expert knowledge on how to reduce areas of high carbon emissions. Alternatively, at Tomson Consulting we can undertake a scope 1,2 and 3 carbon management plan for you, so you can sit back and relax whilst we evaluate your company and its supply chain!

 

Reducing Scope Emissions

In order to meet internationally agreed targets to limit global warming and mitigate climate change, companies will need to reduce emissions across all three scopes. This can be done in a number of ways and will vary for different types of organisations.

Ways in which a company's may decrease its Scope 1 emissions include transitioning to electric vehicles and using more energy-efficient machinery or processes. Cutting down Scope 2 emissions may be achieved by installing solar panels and switching to renewable energy rather than energy generated from fossil fuels.

Reducing Scope 3 emissions can be more complicated because organisations have less direct control over them compared to Scope 1 and 2. For example, the suppliers will have, in most circumstances, significantly greater influence over how emissions are addressed through their product design and purchasing decisions. Nevertheless, there are numerous ways in which organisations can still significantly cut scope 3 emissions. Organisations can make changes, for example, by finding alternative greener suppliers, collaborating with their suppliers on solutions to reduce emissions, enhancing the energy efficiency of their own products, and rethinking their distribution networks.

Despite complexities, more and more companies are already, or are promising to, implement schemes to reduce their Scope 3 emissions across the UK and worldwide. Given that Scope 3 emissions account for such a large proportion of a company's total emissions, cutting these emissions is vital to help companies reduce their overall impact on climate and could contribute to reducing overall greenhouse gas emissions by millions of tonnes per year.

 

Benefits of Cutting All Scope Emissions

The benefits of reporting and reducing all Scope emissions, and especially Scope 3, are widespread. Beyond helping to significantly reduce greenhouse gas emissions and reach international agreements to mitigate against the threats of climate change, it can directly benefit companies.

By more closely monitoring and assessing their operations across their entire value chain, companies can better identify and understand various risks and make more informed investment decisions. Organisations can also identify ‘hotspot' opportunities to decrease material and energy use and improve efficiencies, cutting emissions as well as reducing costs.

Monitoring and tackling emissions up and down its value chain additionally provides companies with the opportunity to engage with its value chain partners, increasing accountability and reducing future supply chain risks. It additionally helps to enhance corporate reputation and set the company apart from others by showing its leadership in sustainability and innovation. This increases customer engagement and loyalty, especially as consumers are becoming increasingly conscious of their decisions ethically and ecologically.

 

SOURCES

Carbon Trust – https://www.carbontrust.com/our-work-and-impact/guides-reports-and-tools/briefing-what-are-scope-3-emissions

Deloitte – https://www2.deloitte.com/uk/en/focus/climate-change/zero-in-on-scope-1-2-and-3-emissions.html

Greenhouse Gas Protocol – https://ghgprotocol.org/  

World Economic Forum – https://www.weforum.org/agenda/2022/09/scope-emissions-climate-greenhouse-business/