Scope 1, 2, and 3 emissions explained
To calculate your full carbon footprint, you must take into account both direct and indirect emissions, across Scope 1, 2, and 3.
Greenhouse gas emissions are classified into three scopes: Scope 1, Scope 2, and Scope 3. These scopes are determined by where the emissions originate from. Scope 1 covers direct emissions that a company generates while performing its business activities, whereas Scope 2 covers indirect emissions from purchased energy, and Scope 3 covers indirect emissions in the value chain.
For most companies, the value chain is responsible for the vast majority of emissions, often around 90%. This makes it absolutely vital to include Scope 3 when calculating your carbon footprint.
The terminology of Scope 1, 2, and 3 was introduced in the Greenhouse Gas Protocol (GHG Protocol), which sets the standards for measuring GHG emissions all around the world. Both the Paris Agreement and virtually every corporate sustainability reporting program are based on the GHG Protocol, making it crucial to understand the framework.
Scope 1 emissions are direct GHG emissions that a company generates while performing its business activities. This includes:
- Generation of electricity, heat, or steam.
- Manufacture or processing of chemicals and materials, as well as waste processing.
- Transportation of materials, products, and waste using vehicles owned or controlled by the company.
- Fugitive emissions, such as equipment leaks of gases or vapors from pressure-containing equipment.
Scope 2 emissions are the indirect emissions generated by the production of purchased energy. This includes:
- Purchased electricity
- Purchased heating
- Purchased cooling
Scope 3 emissions are all other indirect emissions that occur in the value chain of a company and are not already included within scope 2. These emissions are a consequence of the company’s business activities but occur from sources the company does not own or control. They account for approximately 92%[CDP] of an average company’s emissions. Scope 3 emissions include the following:
- Emissions generated in the company’s supply chain, such as extraction, production, and transportation of purchased materials and fuels.
- Emissions generated from the use of sold products and services.
- Emissions generated from waste disposal. This includes the disposal of waste generated both in operations and in the production of purchased materials and fuels, as well as disposal of sold products at the end of their life.
Why measure your Scope 1, 2, and 3 emissions?
The world’s top-performing companies are committing to net zero: to reduce their emissions as much as possible, and then compensate any remainder with high-quality climate investment.
To reach net zero, the first step is to measure all of your emissions – Scope 1, 2, and 3.
Measure your full Scope 1, 2, 3 emissions
Normative’s carbon accounting engine calculates your entire climate footprint and identifies emission hotspots. Our carbon specialists use this intelligence to create a tailored reduction plan – and a climate investment strategy for what you can’t reduce.