Emissions Scopes

Definition of emissions scopes:

Emissions Scopes are a system for determining a company’s overall greenhouse gas emissions. Divided into three parts, the Scopes include the full range of a company’s polluting activity; companies then use this information to make more sustainable decisions.

What are emissions scopes?

The business community is under increasing pressure to support efforts to keep global warming below the 1.5°C threshold set by the 2015 Paris Agreement. But in order to reduce their environmental impact, companies first need to be able to accurately measure the emissions that result from their activities.

The “scopes” are an environmental reporting methodology designed by the Greenhouse Gas (GHG) Protocol: a leading impact-reporting organization that provides the world’s most widely used greenhouse gas accounting standards. The methodology provides a clear framework for measuring the emissions that stem from a company’s direct operations, as well as those resulting from its wider value chain activities.

How do emissions scopes work?

The GHG Protocol separates emissions into the following three scopes:

Scope 1 – “Direct emissions”: these are caused by the combustion of fuel in facilities and assets owned by the reporting company, such as factories, turbines, and owned vehicles.

Scope 2 – “Bought energy”: Indirect emissions caused by the third-party production of electricity, steam, heating, and cooling bought by the reporting company.

Scope 3 – “Value-chain emissions”: Indirect emissions caused by the upstream and downstream activities necessary to the operation of the reporting company, e.g., raw material sourcing, logistics, and product disposal or recycling.

What are the benefits of emissions scope reporting?

Reporting on emissions scopes helps the company to pinpoint emissions hotspots in its operations and prioritize its emissions-reduction strategies to target them. It also allows the reporting company to work with value-chain partners to meet sustainability targets. For example, the reporting company’s procurement team may use the emissions data they gather to identify which suppliers are making satisfactory progress on sustainability and which need to do more. Reporting on and reducing emissions caused up and down the value chain is essential for achieving a carbon-neutral economy.

What is the future of emissions scope reporting?

The Climate Transparency 2021 report states that the G20 group of countries is responsible for approximately 75% of global GHG emissions. However, only 4% of organizations in these countries disclose information on all key climate impact indicators.

As a solution, mandatory climate disclosure obligations for large companies are currently being considered in major economies such as the USA and the EU. These measures will help ensure that more companies disclose their environmental impacts, which will be vital in securing an effective transition to carbon neutrality by 2050.

Want to learn more about emissions scopes?

Read up on what is ESG really means.