What are Scope 1, 2 and 3 Emissions

An introduction to GHG emissions reporting

Scope Emissions Explained

At the heart of the decarbonisation effort to combat climate change is the need to efficiently measure and track greenhouse gas (GHG) emissions. As companies, public bodies, and consumers continue to align with the global sustainable development agenda, it has become essential to ensure that carbon and GHG reduction strategies are in place, which first requires an understanding of those emissions.

For many organisations, gaining an understanding of their GHG footprint is a precursor to being able to set ambitious reduction targets, design and deliver effective climate solutions. Without this vital piece of information, planning and executing strategies to effectively reduce carbon emissions are likely to be wrought with problems. To combat this and further formulate a standardised approach to GHG reporting, emissions can be classified into three distinct ‘scopes’, as defined by the GHG Protocol Corporate Standard, which covers both direct and indirect emissions related to a given organisation.

scope 123 diagram
a diagram showing the different types of scopes 1, 2 & 3

What are Scope 1, 2 and 3 emissions?

The GHG Protocol has defined three scopes of emissions. The scopes correlate to who ‘owns’ those emissions and the level of control applicable to changing those emission levels at each stage.

Scope 1 and 2 emissions are a mandatory part of reporting for many organisations across the world and relate to systems that are within the reasonable control of an entity, such as onsite and purchased energy.

Scope 1 emissions

Scope 1 emissions are those emissions that a company makes directly.

Scope 1 Examples

  • Building onsite energy use (e.g., space heating)
  • Building refrigerants
  • Company Vehicles Fuel consumed by owned and leased vehicles

Scope 2 emissions

Scope 2 emissions are those emissions the company makes indirectly, such as by buying energy.

Scope 2 examples

  • Purchased electricity, steam, heating & cooling for own use

Scope 1,2 & 3 definitions

ScopeEmission TypeDefinition 
Scope 1Direct EmissionsGHG emissions directly from operations that are owned or controlled by the reporting company
Scope 2Indirect EmissionsIndirect GHG emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company
Scope 3All indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions

FIND OUT MORE ABOUT EMISSIONS REPORTING AND SCIENCE-BASED TARGET SETTING

Scope 3 emissions

Scope 3 emissions are centered on sources of emissions that are more external to a specific organisation, such as those across the supply chain. Scope 3 emissions remain mostly voluntary to report, however, in most cases the reduction of Scope 3 has the potential to have the largest impact.

Scope 3 emissions are often the most difficult to measure, track and report.
FIND OUT MORE ABOUT SCOPE 3 EMISSIONS REPORTING

Scope 3 examples

  • Purchased Goods and Services
  • Capital goods
  • Upstream and Downstream Transportation & Distribution
  • Business Travel (incl. Remote Working)
  • Employee Commuting
  • Leased Assets
  • Waste Generated in Operations
  • Investments

Upstream and downstream emissions

Upstream and downstream scope emissions refer to distinct phases in the lifecycle of a product or process where greenhouse gas emissions are generated, either directly or indirectly. These terms are often used in the context of assessing the environmental impact of activities.

Upstream Scope Emissions

Upstream scope emissions encompass the environmental impacts associated with the extraction, production, and transportation of raw materials, components, and energy sources required for a product or process. These emissions occur prior to the final manufacturing or operation stage. Upstream emissions include factors such as resource extraction, manufacturing of components, and transportation of materials to the production site. They are essentially the “pre-production” emissions that contribute to the overall carbon footprint of a product or process.

Downstream Scope Emissions

Downstream scope emissions encompass the environmental impacts that occur after the product has been manufactured or the process has taken place. These emissions are associated with distribution, use, maintenance, and disposal of the product. Downstream emissions may include factors such as transportation to end-users, energy consumption during product use, and the eventual disposal or recycling of the product at the end of its lifecycle. These emissions contribute to the overall environmental impact beyond the initial production phase.

In essence, the difference between upstream and downstream scope emissions lies in the timing and nature of the emissions. Upstream emissions are tied to the early stages of production and supply chain activities, while downstream emissions occur during the later stages, encompassing product usage, distribution, and end-of-life processes. A comprehensive understanding of both upstream and downstream emissions is crucial for a holistic assessment of a product or process’s environmental footprint.

scope 1 2 and 3 diagram

Why measure all three scopes?

While many organisations have ramped up their efforts to report on their carbon and energy emissions, there will continue to be an increase in the requirements associated with managing and auditing emissions through schemes such as TCFD and SECR. Reporting on Scope 1 and 2 is mandatory for many, whilst reporting emissions across the whole value chain will increasingly become harder to avoid.

Organisational power to change

The control an organisation has over its emissions should not start and stop at its front door. Utilising the power to influence behaviours throughout the value chain will be instrumental in reporting and minimising emissions related to a product or service. Understanding and reporting on emissions now will empower your business and provide a proactive approach to aligning with increasingly mandatory climate regulations.

What are the benefits of reporting your Scope emissions?

Organisations that engage with Scope 1, 2 and 3 reporting can see a myriad of benefits, including:

  • Improved transparency, customer trust, brand and reputational enhancement
  • Identification of the climate-maturity of key value chain players and the ability to identify value chain hotspots and weaknesses
  • Better understanding of exposure to resource, energy and climate-related risks
  • Lower energy and resource costs
  • Positive engagement with employees and consumers
  • Compliance with regulatory GHG reporting requirements

How We Can Help

Anthesis provides holistic, global solutions for the measuring and reporting of all scope emissions. We support clients to help identify carbon and greenhouse gas emissions across the value chain and strategically plan for a low carbon future. This support includes providing expert guidance and consultative services for legislative compliance, carbon management and assisting routes to carbon neutrality and sustainable energy management.

We are the world’s leading science-based advisory, purpose-driven agency and digitally-empowered activator. And always welcome inquiries and partnerships to drive positive change together.