Understanding Scope 1, 2 and 3 emissions

One of the most discussed topics around sustainability is greenhouse gas emissions. Carbon dioxide (CO2) is one of those greenhouse gases, and is the most common.

When these emissions are released into the atmosphere, they trap heat and cause global temperatures to rise. Until all organisations, individuals, states and countries are working to reduce dramatically the level of carbon emissions they are producing, we cannot hope to tackle climate change effectively.

Greenhouse gas emissions are categorised into three types produced by businesses (and homes). They are known as Scope 1, 2 and 3 emissions. This terminology is established in the Greenhouse Gas Protocol (GGP), the world’s most used greenhouse gas accounting standard and the basis on which the UK reports emissions.

For businesses to take action on reducing emissions and to meet the Government’s Net Zero targets by 2050, it’s important to understand the three scopes to be able to assess and measure where a business’s emissions originate.

According to the Greenhouse Gas Protocol, by “developing a full greenhouse gas emissions inventory, incorporating Scope 1, Scope 2 and Scope 3 emissions, it enables companies to understand their full value chain emissions and focus their efforts on the greatest reduction opportunities”.

Defining Scopes 1, 2 and 3

The three categories – scopes – define a different set of emissions:

Scope 1 emissions are those that originate directly from your company, such as any fossil fuels burned directly on your premises in your usual business operations. Other examples would be the fuel used in fleet vehicles owned or leased (controlled) by the business, or gas burned in a boiler in the office.

Scope 2 emissions are those that your company indirectly causes when you purchase and use energy. For example, the electricity you buy to heat or cool a building, or to power your fleet of electric cars.

Scope 3 emissions are the hardest to determine as they are those that are produced by another source, ie. by your supply chain. Although your company does not own or control those emissions, you are indirectly responsible for them. For example, when your company buys, uses, and disposes of suppliers’ products, or causes energy to be used in order to deliver services to your business, or the fuel burned in vehicles delivering materials to your sites. Scope 3 emissions are throughout your whole value chain and without Net Zero buy-in from all your suppliers and stakeholders, this is the hardest emission to track and monitor.

The benefits of tracking emissions

The tracking of carbon emissions is becoming far more widespread across many industries, particularly those that operate or have suppliers that operate a fleet of vehicles. Technology has enabled the tracking of real time emissions data, giving far more accurate reporting statistics to help businesses evaluate their impact on the environment.

The benefits of tracking greenhouse gas emissions include:

• It drives innovation and cost saving

Scope emission reporting helps businesses identify the total emissions produced in their daily operations – both direct and indirect. Real time tracking provides a comprehensive view of the risks and identifies where opportunities are available to cut back on emissions, and potentially save costs such as more modern technology and improved solutions to streamlined processes and procedures. In addition, the data can be shared with external stakeholders to see where they can also make adjustments to their emissions.

• It strengthens credibility and stakeholder confidence

The more a business learns about greenhouse gases and carbon emissions and invests in sustainable solutions to reduce their direct and indirect emissions, the greater confidence customers and investors will have in their business. In addition, it increases credibility and trustworthiness among other businesses and consumers. The greater the awareness of climate change risk within the company, the more sustainable it and any investments will be.

By disclosing emission data, it demonstrates the business’s commitment to Net Zero, climate change and reducing emissions, strengthening its standing in the industry.

• It improves transparency across the value chain

Reporting the number of emissions produced allows your business to identify any value chain hotspots. Scope data helps to clarify the emissions sources, enabling the business to increase emission transparency. This helps stakeholders understand the business and its processes better.

How do you identify your business’s emissions?

Measuring emissions is a multi-step process and it is important to ensure the information is accurate. To start tracking and monitoring carbon emissions using the Greenhouse Gas Protocol, businesses should identify, categorise and report their emissions according to Scope 1, Scope 2 and Scope 3.

And while you’re doing that, despite it being a multi-step process, there are some immediate actions businesses within the timber engineering industry can consider to reduce emissions. These include:

• Switching to renewable and green energy suppliers for office buildings
• Using more energy-efficient electronic devices
• Switching to electric or hybrid vehicles

Have you started to track and monitor your business’ emissions? If so, the TRA would like to hear more. Tell us about the challenges you have met and overcome and any helpful tips you can share with fellow members of the Association. Send your ideas to info@tra.org.uk.