Understanding Emission Scopes: Key to Effective GHG Accounting
The global community has become increasingly aware of the impact of greenhouse gas (GHG) emissions on our planet’s climate and ecosystem. With the advent of the Paris Agreement, aimed at keeping the rise in global temperatures below 1.5°C, businesses are recognising the urgency of reducing their environmental impact.
To reduce an organisation's carbon footprint, a thorough understanding of their footprint is essential. This includes knowing the sources of emissions and the various emission scopes before embarking on reduction strategies.
Why Do We Need to Know About Emissions?
Excessive human-induced GHG emissions intensify the natural greenhouse effect, leading to severe consequences for Earth's ecosystems and global temperature. Understanding carbon emissions is crucial for effective mitigation, both individually and organisationally.
The concept of GHG emissions scopes categorises and quantifies emissions systematically. This forms the foundation for targeted emission reduction strategies and helps in implementing measures for a sustainable future. The Greenhouse Gas Protocol (GHG Protocol) is central to understanding Scope 1, 2, and 3 emissions.
Emission Scopes and Their Significance
Scope 1 emissions are direct emissions from operations owned or controlled by a company. These emissions are sub-divided into four categories:
1. Stationary Combustion: Emissions from fuel combustion sources such as diesel generators for electricity.
2. Mobile Combustion: Emissions from company-owned vehicles.
3. Fugitive Emissions: Unintentional emissions from leaks in air conditioning units and refrigerators.
4. Process Emissions: Emissions from industrial processes, like cement production.
Understanding Scope 1 emissions is vital as they are directly tied to an organisation's activities, making them easier to measure and manage.
Scope 2 emissions are indirect emissions from the generation of purchased or acquired electricity, steam, or heat. These occur off-site, beyond the direct control of the organisation.
Examples include:
● Energy consumption in offices and sites from utilities.
● Energy generation from non-renewable sources.
● Steam or heat consumption from district energy systems.
● Cooling consumption from central systems.
Scope 2 emissions are crucial to measure as they reflect the indirect impact of an organisation's energy use.
Scope 3: Indirect Emissions – Not Owned
Scope 3 emissions are all indirect emissions not included in Scope 2 that occur in the value chain of the reporting company. This includes both upstream and downstream emissions.
Upstream emissions occur during the production of goods or services a business purchases or uses. For example, emissions from producing and transporting plastic for a retail business.
Downstream emissions result from the use or disposal of a business’s products or services. For example, emissions from the use of machinery manufactured by a company.
Scope 3 emissions include:
● Business travel (e.g., air travel)
● Employee commuting
● Waste generated in operations
● Purchased goods and services
● Upstream and downstream transportation and distribution
● Capital goods, investments, and franchises
● Leased assets
● Product use and end-of-life treatment
Scope 3 emissions are often the largest category, representing a significant portion of a company's total emissions.
Why Measure All Three Scopes of Emissions?
Organisations often struggle to mitigate their impact due to inadequate understanding of their emissions inventory. Measuring and reporting on all three scopes provide a comprehensive view of their environmental impact.
Examining emissions across operational stages enables companies to take environmental responsibility. This assists in identifying sources and implementing reduction strategies, aiding in setting targets and ensuring regulatory compliance.
Measuring all scopes also helps mitigate risks associated with emissions. It guides resource allocation and investment in emission-reducing technologies. Ongoing monitoring promotes continual improvement, enhancing environmental stewardship.
A study across 29 countries revealed that reducing GHG emissions had a positive reputation effect for 31.2% of companies. This also positively affected market demand.
Previously, many organisations only reported Scope 1 and 2 emissions. However, including Scope 3 emissions is becoming common practice. A CDP study in 2020 found that Scope 3 emissions are 11.4 times higher than Scope 1 and 2 combined. Therefore, measuring and reporting Scope 3 emissions is invaluable, as it represents a significant portion of total emissions.
Benefits of Comprehensive Emissions Measurement
Measuring all three scopes of emissions provides several benefits:
● Holistic Understanding: Offers a complete view of an organisation’s carbon footprint.
● Targeted Reductions: Identifies specific areas where emissions reductions can be most effective.
● Regulatory Compliance: Ensures adherence to evolving environmental regulations.
● Risk Mitigation: Helps in managing risks associated with climate change.
● Enhanced Reputation: Builds a positive image as a responsible and sustainable organisation.
● Operational Efficiency: Promotes resource efficiency and cost savings.
These benefits highlight the importance of a thorough GHG accounting process, ensuring that companies not only comply with regulations but also contribute positively to global climate goals.
Overcoming Challenges in Emission Measurement
Measuring emissions, particularly Scope 2 and 3, presents challenges due to their indirect nature. Overcoming these challenges involves:
1. Collaboration: Working closely with suppliers and partners to gather accurate data.
2. Technology: Implementing advanced tools for tracking and reporting emissions.
3. Training: Educating employees and stakeholders on the importance of emissions measurement.
4. Transparency: Maintaining clear and open communication about emissions and reduction efforts.
By addressing these challenges, organisations can improve the accuracy and reliability of their GHG accounting, leading to more effective climate action.
Understanding and measuring GHG emissions across all scopes are crucial steps in addressing climate change and promoting sustainability. Through thorough evaluation, organisations can pinpoint areas for improvement, establish reduction goals, and mitigate environmental consequences.
Embracing this comprehensive approach strengthens environmental responsibility, leads to cost savings, and enhances operational effectiveness, paving the way for a sustainable future. As businesses commit to detailed GHG accounting, they not only comply with regulations but also play a vital role in the global effort to combat climate change.