What Are Scope 1, Scope 2, and Scope 3 Emissions? - Beyond Procurement
Insights & Guides

What Are Scope 1, Scope 2, and Scope 3 Emissions?

graphic element

With so many enterprises taking steps to address their greenhouse gas (GHG) emissions, you’ve likely encountered terms such as Scope 1, Scope 2, and Scope 3 emissions during your initial research and wondered what they refer to.

In short, they represent classifications of the different types of GHGs emitted as a result of a company or organisation’s activities. The different “scopes” help differentiate between direct, indirect, and broader emission-generating activities up and down the value chain (including supply-side and consumer activities).

To clear up any confusion, let’s take a closer look at what these different scopes of emissions mean and what you can do about them.

Scope 1, 2, and 3 Emissions Defined

As mentioned, there are three distinct scopes when measuring and reporting a company’s GHGs emissions. They are the product of the Greenhouse Gas Protocol, the world’s leading GHG accounting standard, and help to categorise emissions according to where and how they occur.

So without further ado, let’s take a closer look at the three scopes of emissions:

What Are Scope 1 Emissions?

Perhaps the most straightforward category for companies to address, Scope 1 emissions are those generated from sources either owned or directly controlled by a business. Typical examples of these emissions include those generated by your fleet of internal combustion engine (ICE) vehicles or the boiler(s) you use to heat your company facility.

What Are Scope 2 Emissions?

Scope 2 emissions are perhaps best defined as indirect emissions generated when companies purchase commodities such as energy to carry out their necessary activities. For example, the electricity you buy to power the lighting in your company building would fall under this scope.

What Are Scope 3 Emissions?

Here is where the scope becomes far more expansive. Rather than emissions that companies are responsible for (either directly or indirectly), Scope 3 emissions cover all emissions associated with a company – right across the value chain. Your entire sphere of influence concerning emissions is included in this scope, from GHGs produced in a supplier’s factory to those generated by your product or service when used by your consumers.

Scope 3 is somewhat of a catch-all category, as anything not falling into Scope 1 or Scope 2 automatically falls into this scope. From employee commuting to waste generated up and down your supply chain, there’s no question that Scope 3 emissions are the so-called “big” ones when it comes to reducing your organisation’s carbon footprint.

Why Are There Three Distinct Categories of Emissions?

The different categories, or scopes, are helpful as they help break down an organisation’s total GHG emissions into more manageable categories. Scope 1 and Scope 2 cover emissions that are directly within a company’s control and so give you an immediate platform upon which you can work to reduce these emissions.

For instance, you can electrify your heat demands, switch to an electric vehicle fleet, and commit to only utilising energy from renewable sources. All these steps will help reduce your carbon footprint and set you on the path to becoming a more sustainable business.

However, the third scope is needed to cover the entirety of your organisation’s impact on the planet.

Let’s say you manufacture widgets in the UK. While you can take steps such as those mentioned above to reduce your direct and indirect emissions, pause to think about the raw material extraction, processing, and transportation emissions involved before your company even purchases any raw materials or begins manufacturing.

In other words, the different categories of emissions, and Scope 3 in particular, help to paint a clearer picture of how your business impacts the environment.

They also help provide a roadmap towards becoming a more sustainable business by helping you prioritise your efforts. Direct emissions (Scope 1) are the easiest to address and thus are often tackled first before companies move on to indirect emissions (Scope 2) and then ultimately the broader scope (Scope 3) of your entire value chain’s emissions.

Why Should Companies Bother Measuring and Tackling Scope 3 Emissions?

Given the scale of Scope 3, it can undoubtedly feel overwhelming, or perhaps even unachievable on first viewing, to try and tackle some segments of these emissions.

However, here’s the problem. For many companies, Scope 3 emissions account for 70% (or more) of their carbon footprint. So even if you’re following a stringent carbon reduction plan covering Scope 1 and Scope 2 emissions, the truth is that most of the GHG emissions created at your behest lie outside of your own operations.

While progressing to carbon-neutral certification (which only covers Scope 1 and Scope 2 activities) is commendable, if you’re serious about reducing your organisation’s environmental footprint, tackling Scope 3 emissions should be a top priority.

Furthermore, if you’re looking to become a net-zero business, you must tackle and report on your efforts to reduce your organisation’s Scope 3 emissions.

There are also significant rewards (beyond reducing your environmental impact) associated with tackling Scope 3 emissions. For starters, this emission tranche offers the biggest opportunities for business cost savings. For instance, by engaging suppliers and helping with their energy efficiency, those energy cost reductions can be passed onto you – dramatically improving your profitability and gaining an edge over your rivals in the process.

Lastly, tracking and measuring your Scope 3 emissions might not be as complex or time-consuming as you think.

How Can Scope 3 Emissions Be Measured?

The good news is that many tools are available to help companies develop comprehensive and reliable inventories of their GHG emissions. Leading carbon footprint and net-zero consultants, have whole suites of products at their disposal to help you keep track of your Scope 3 emissions.

From business carbon calculators to software that helps track and measure your Scope 3 emissions along your value chain, a wealth of resources is available to help you tackle these sometimes difficult-to-quantify emissions.

We know that time investment and capital expenditure are constant stumbling blocks when tackling climate change at an organisational level. However, by including Scope 3 emissions in your work to become a more sustainable operation, you can incrementally reduce your environmental impact while reaping the rewards from doing so in the form of cost savings and competitive advantages.

Working with Scope 3 consultants, such as ourselves here at Beyond Procurement, removes the guesswork from the equation when tackling these challenging emissions. In short, you can develop a roadmap that will ensure you track and subsequently reduce your Scope 3 emissions cost-effectively and efficiently.

How Challenging Is Reducing Scope 1, 2, and 3 Emissions?

Once the subject of cost has been broached, we often find the next elephant in the room when tackling GHG emissions at the business level is the question of efficacy. How much work is this going to take to make a real difference?

There’s no doubt that Scope 1 and Scope 2 are the easiest areas to address when it comes to reducing your organisation’s carbon footprint and GHG emissions. They are almost universally within your control, and strategies can be implemented without requiring significant change management.

The problem, as explained, is your value chain is likely the most significant contributor to your GHG emissions. While you can develop a comprehensive Scope 3 emissions reduction plan, you may be met with suppliers resistant to new policy adoption as well as consumers and even employees who are reluctant to make lifestyle changes in relation to your organisation’s activities.

That said, it’s where the most potential lies regarding significant reductions in business costs and GHG emissions. For example, by implementing a supplier sustainability programme, you can reduce the emissions associated with your supply chain and help your key suppliers gain monetary savings – including reduced energy and waste disposal costs. Those savings can then be passed onto you.

You can often achieve even greater emissions reductions by engaging your workforce in the process. From encouraging car-sharing to promoting public transport or even leveraging the government-approved cycle-to-work scheme, employee engagement is another powerful method for achieving Scope 3 reductions.

Lastly, if you’re genuine in your bid to become a sustainable business, you’ll need to tackle Scope 3 emissions head-on. They are likely where the bulk of your GHG emissions are to be found, and net zero will become the new standard to which businesses are held.

While carbon neutrality is an important first step, to truly make a difference to our planet and future-proof your business, you’ll need to become a net-zero organisation. Four in every five consumers are already aware of the term, and public understanding of the concept is increasing.

While there’s undoubtedly more public education work to do regarding the meaning of net zero, there’s no doubt that being a company on the road to net zero has enormous benefits in terms of brand value and customer perception.

How Can Organisations Start Tackling Scope 1, 2, and 3 Emissions?

Many pathways are available to companies looking to make a genuine difference to our planet’s future. Those serious about reducing their environmental impact should start by assessing their Scope 1, Scope 2, and Scope 3 emissions.

The best way to start is with an official pledge to begin your journey to net zero. It will demonstrate that you’re serious about the goal and provide focus, motivation, and direction to your specific emissions reduction programme.

Then it’s time to measure your emissions, with business carbon measurement and other GHG emission tracking tools to establish a benchmark against which to track your progress over time.

Next, you need to develop a strategy. From addressing your emissions hotspots to identifying quick wins, you must perform a comprehensive audit of your corporate footprint and develop a plan based on those findings.

Lastly, you need to take action and carry out the tasks set out in the strategy that you’ve developed. With frequent reviews and refinements to your programme over time, you’ll soon start to see the emissions reductions you need to achieve net zero status. You can then measure your efforts against your initial benchmarks and celebrate your successes along the way.

Contact Beyond Procurement Today to Start Tackling Your Emissions

If you need help with any or all of the above, please contact Beyond Procurement today. As a leading net zero consultancy, we offer companies and organisations of all sizes bespoke services to help them achieve their net zero goals.

From comprehensive carbon audits to industry-leading Scope 3 emission tracking, we can offer you the tools, strategies, and roadmap you need to become a net zero organisation in the shortest possible time frame. Our ZERO programme allows you to create a bespoke journey to net zero from inception to completion.

Click here to book an initial 15-minute consultation to see how Beyond Procurement can help you to get started on your journey to net zero.