Understanding Scope 1, 2, and 3 emissions
Greenhouse gas (GHG) emissions must be reduced globally to stop climate change. The goal to be achieved is set out in the Paris Agreement: to keep the average global warming well below 2°C above pre-industrial levels, and ideally below 1.5°C.1
As concerns about climate change and environmental sustainability continue to grow, companies and organizations around the world are increasingly focused on measuring and reducing their GHG emissions and decarbonizing their operations, value chains, and processes to be more sustainable.
The Greenhouse Gas Protocol, a widely accepted standard, categorizes emissions into three different scopes: Scope 1, Scope 2, and Scope 3. This classification of emissions is intended to help measure progress toward the huge reductions needed to keep global temperature rise well below 2°C.
This article provides an overview of these three scopes and focuses on the environmental impact of business travel, which falls under Scope 3.
Scope 1, 2 and 3 emissions explained
Under the GHG Protocol, an organization’s greenhouse gas emissions are divided into three scopes. Whereas Scope 1 and 2 are mandatory to report, Scope 3 is voluntary to report and at the same time, the most difficult to monitor. However, organizations that manage to report all three scopes gain a sustainable competitive advantage.
Scope 1: direct GHG emissions
Scope 1 emissions encompass direct emissions that result from sources owned or controlled by an organization. These emissions are the most easily identifiable and measurable, as they originate from activities occurring within an organization. This includes on-site energy, heating, industrial processes, manufacturing, running machinery, vehicles, refrigerants, air conditioning, etc.
Scope 2: indirect GHG emissions
Scope 2 emissions are indirect emissions created by the purchased energy, steam, heating, and cooling for own use. Installing solar panels or sourcing renewable energy rather than using electricity generated using fossil fuels would cut a company’s Scope 2 emissions.
Scope 3: other indirect GHG emissions
Scope 3 is an optional reporting category and includes all other indirect emissions that occur in the value chain of the reporting company. These emissions are a result of an organization’s operations but are not owned or controlled by the organization. To measure Scope 3 emissions, an organization has to track activities across the entire value chain – from suppliers to end users, including both upstream and downstream emissions. Upstream emissions are indirect GHG emissions related to purchased or acquired goods and services, such as business travel, generated waste, transportation, and distribution etc. Downstream emissions are indirect GHG emissions related to sold goods and services, such as processing and use of sold products, or leased assets.
Why Scope 3 emissions are important
Often, Scope 3 emissions, make up a significant portion of a company’s carbon footprint. By addressing Scope 3 emissions, businesses are acknowledging the full impact of their operations. By measuring Scope 3 emissions, organizations can also identify opportunities for energy efficiency and cost savings, setting themselves apart from competitors and enhance their reputation and relationships with stakeholders.
How can Scope 3 emissions from business travel be reduced?
Business travel falls under Scope 3 emissions. The aviation sector is growing rapidly and will continue to grow. Studies suggest that the demand for air travel will increase significantly over the next 20 years.2 Given that aviation is a hard-to-abate sector and the associated challenges, this underscores the urgency of implementing measures to tackle emissions from air travel.
So what steps can organizations take to address emissions from air travel?
An organization should first calculate its carbon footprint from its business travel and then establish science-based and measurable targets. One of the most effective ways to reduce a carbon footprint is to fly less. Whenever flying is unavoidable, companies should use SAF to reduce the emissions of their business travel. There is also the option to compensate the carbon emissions through purchasing carbon credits on a trusted offsetting platform.
Navigating the path to sustainability
By understanding, measuring, and addressing their Scope 1, 2, and 3 emissions, companies can reduce their environmental impact and contribute to a more sustainable future by making conscious decision. While Scope 1 and 2 emissions are mandatory to report, Scope 3 emissions, such as business travel, are critical for companies to manage. When it comes to reducing business travel emissions, there are several solutions to consider, such as flying less, using SAF and/or offsetting carbon emissions.
Greenhouse Gas Protocol
Convened in 1998 by the World Business Council for Sustainable Development and World Resources Institute, the Greenhouse Gas Protocol provides the world’s most widely used greenhouse gas accounting standards, guidance, tools, and training for businesses and governments to measure and manage climate-warming emissions to track progress toward climate goals.3 The GHG Protocol defines three scopes of emissions for GHG accounting and reporting purposes, to help delineate direct and indirect sources of emissions, improve transparency, and provide utility for different types of organizations and different types of climate policy and business objectives.4
Sources:
[1] unfccc.int/process-and-meetings/the-paris-agreement
[2] icao.int/Meetings/FutureOfAviation/Pages/default.aspx
[3] ghgprotocol.org
[4] ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf
