Greenhouse gas emissions affect the planet’s health. They are produced (directly or indirectly) by almost every process in our fossil fuel-dependent world. And the sheer scale of these emissions, and surprisingly manageable ways to reduce them, are why they are taking a central focus in the growing decarbonization movement.
This movement has been growing for decades and is now widely accepted. With a growing number of targets like The Paris Agreement (2050 net-zero emissions), governments, investors, and the public sector are calling for change—which begins with understanding exactly how many emissions are being produced, why they're being produced, and where they're coming from. This information helps develop a carbon emissions inventory, which shows the net release or intake of emissions. Ultimately, an inventory helps identify areas for emissions reductions and a manageable way to quantify these efforts.
Developing an emissions inventory starts with quantifying all of the emissions an organization creates or removes from the environment. These emissions are separated into Scopes 1, 2, 3, and 4.
Scope 1: Direct Carbon Emissions
In simple terms, Scope 1 emissions are emissions that a company directly makes. Officially, the Environmental Protection Agency (EPA) defines them as "direct [carbon] emissions that occur from sources that are controlled or owned by an organization."
These are arguably the easiest types of emissions to quantify when considering the four main Scope 1 areas:
Stationary Combustion = Emissions released by fuels used in onsite operations
Mobile Combustion = Emissions released by vehicles owned or controlled by a business
Fugitive Emissions = Emissions released by leaks
Process Emissions = Emissions released as part of an onsite industrial process/manufacturing
Any fossil-fuel-powered equipment or service that an organization controls will produce carbon emissions.
Scope 2: Indirect Carbon Emissions
Scope 2 emissions are indirect carbon emissions generated by the consumption of energy purchased from a utility company. They typically take the form of electricity, steam, heating, and cooling. While these emissions aren't generated directly by the organization using them, they result from their demand. As such, these emissions are tied to an organization's operations and are accounted for by the organization that uses them.
The amount of Scope 2 emissions that a business generates is directly dependent on how much energy they use. For example, a manufacturing company typically has larger Scope 2 emissions than an accounting business.
Emissions are Interconnected
It is widely held that Scope 1 and 2 emissions are primarily within an organization's control. This makes them a great starting place for developing a sustainability and emissions reduction strategy. With an effective plan, it is possible to reach net-zero Scope 1 and 2 emissions.
These first two scopes help identify direct and indirect emissions linked to an organization's day-to-day functioning. Whether it is the emissions created by work vehicles or the electricity needed to power its offices, these emissions sources fall squarely within Scope 1 and Scope 2. The following two scopes are more abstract but paint a picture of the interconnectivity businesses have with each other and society.
Scope 3: Value Chain Emissions
Scope 3 emissions are also known as “value chain emissions” because they include all of the indirect emissions that result from an organization’s value chain. In simple terms, Scope 3 emissions include all sources not within Scope 1 and 2 emissions, which means they come from upstream and downstream activities, like sourcing raw materials or third-party transportation of finished products or customer use of the product. One company’s Scope 3 emissions are another’s Scope 1 and 2.
For many businesses and industries, Scope 3 is where a majority of emissions are generated, and therefore where emissions can be reduced. This means that companies who track Scope 3 have leverage over their suppliers and are more likely to address life-cycle impact of their products.
Scope 4: Avoided Carbon Emissions
The previously mentioned scopes relate to carbon emissions generated from an organization's activities. Scope 4 balances this out by calculating saved emissions or how much carbon was not emitted due to a business's actions. This includes any carbon-reducing measures a group has embraced, like carbon offsetting or installing solar panels. Another relevant example of Scope 4 emissions are the emissions saved by working from home. Not only do employees avoid emissions by not commuting, but transportation emissions from telecommuting are significantly reduced.
Developing a Decarbonization Strategy for Your Business
The role of the carbon emission scopes is to help organizations better understand the emissions for which they are directly and indirectly responsible. It is becoming ever more critical to be aware of this data in our current time period. In many fields, it has become common practice for businesses to publicly report their annual emissions information. For example, 90% of companies on the S&P 500 report this data, which is up from 20% in 2011. These are some of the largest companies in the world, which not only means we can expect they will respond to public sentiment first, but also, they are an indicator of what is to follow for the rest of the business world.
In many cases, emission sources are relatively easy to identify, but quantifying emissions is more complicated. To ensure that all Scope 1 and 2 emissions are recorded similarly, the EPA provides frameworks and guidance on calculating and reporting each scope. These guidelines can be quite challenging to follow without prior knowledge or training. Hiring an experienced sustainability consultant is an effective way to make sure you are correctly quantifying your emissions. Additionally, the consultant is then armed with the relevant data to suggest decarbonization strategies or a sustainability strategy.
Find out why Emerald Built Environments is the go-to choice for hundreds of decision-makers and business owners when it comes to reducing emissions in design and operations--contact us today.
You can also learn more by watching our video on this subject, Who Needs to Know - Greenhouse Gas Emissions Part 2. Tracking and reporting greenhouse gas emissions is a new concern for many businesses. With it comes a whole new set of vocabulary people need to learn. In this video, we break down greenhouse gas emissions scopes 1 and 2 so you have a better idea of where to begin.