What are Scope 1, 2 and 3 Emissions: GHG Protocol?

 

“We do not inherit the earth from our ancestors, we borrow it from our children.” Unknown.

Introduction

As per Stephen R. Covey’s Book, The 7 Habits of Highly Effective People, to get clarity in life, we can divide our priorities into 4 quadrants. The first will be Urgent and Important, 2^nd will be Important but not Urgent, the third will be Urgent but not Important, and the 4^th will be not Urgent & Important. It helps us to understand and focus on what is relevant for us.

Content: What are Scope 1, 2 and 3 Emissions?

1. What are Scope 1, 2 and 3 (Direct, Indirect & Other Indirect)?
2. What is the purpose and meaning of Scope 1, 2 and 3?
3. Why are they important?
4. What are the key challenges?

Read More: https://bit.ly/C2CC2G (Cradle to Cradle and Cradle to Grave)

Objective

The objective of measuring Scope 1, 2, and 3 emissions is to provide a comprehensive understanding of an organisation’s total greenhouse gas (GHG) impact across its entire value chain. Scope 1, 2, and 3 emissions are greenhouse gases that are released across an organisation’s entire value chain. Scope 3 emissions are the most complex, as they are released before and after a product is delivered or consumed.

Once you go through the article, you will understand the meaning of Scope 1, 2 and 3, relevant examples related to it, why it is important, and what the key challenges are.

Read More: https://bit.ly/LinearCircularEconomy

Definition: ISO 59004: 2024

Circular Economy (Cl 3.1.1): Economic system that uses a systematic approach to maintain a circular flow of resources by recovering, retaining or adding to their value while contributing to sustainable development. 

Sustainable Development (Cl 3.1.11): Development that meets the environmental, social economic needs of the present without compromising the ability of future generations to meet their own needs.

Life Cycle (Cl 3.2.4): Consecutive and interlinked stages in the life of a solution.

Linear Economy (Cl 3.5.10): Economic system where resources typically follow the pattern of extraction, production, use and disposal. 

End of Life (Cl 3.5.30): <Product> point in time when a product is taken out of use and its resources are either recovered for processing or disposed of. 

Life Cycle Assessment (Cl 3.6.8): Compilation and evaluation of the inputs, outputs and potential environmental impacts of a product system throughout its life cycle. 

Read More: https://bit.ly/ReduceRecyleReuse

Detailed Information

Monitoring Scope 1, 2, and 3 emissions is foundational for effective climate action, risk management, and long-term business sustainability. These categorisations first appeared in the Greenhouse Gas Protocol in 2001, the world’s most widely used greenhouse gas accounting standard. The scopes are a useful tool for businesses to discover and understand their entire value chain emissions to put their resources behind the best reduction opportunities.

Read More: https://bit.ly/GreenWashiing

Read More: https://bit.ly/BRSRblog

Why are there 3 Scopes of Emissions?

Classifying a company’s emissions into three scopes allows companies to better measure, manage, and reduce emissions in a meaningful way. This framework provides a fully comprehensive overview across a company’s entire value chain, meaning that targeted actions can be taken to reduce and eliminate emissions. This is a more holistic approach to emissions management.

Also, Scope 1, 2, and 3 standardise emissions reporting so that it is easier to compare emissions data across different organisations and industries.

Read more: https://bit.ly/WhatESG

Scope 1 Emissions (Direct):

Scope 1 emissions are the greenhouse gases that a company or organisation emits directly. This can be through company vehicles, fugitive emissions (leaks from equipment or infrastructure), or any emissions from owned or controlled sources. 

These emissions are often the first area of focus in a company’s efforts to reduce greenhouse gas emissions, as they have direct control over them.

Example:

• Fuel combustion from mobile sources like company-owned vehicles, like delivery trucks, service vans, or company cars.
• Fuel combustion from stationary sources like burning natural gas in company boilers or diesel fuel backup generators emissions.
• Process emissions like cement production, metal smelting, refining operations, iron and steel production, lime production, ethanol production, and hydrogen production (seam methane reforming).

Challenges:

• Major investment in new technologies or equipment
• Limited technological options for replacing fossil fuels with cleaner alternatives

Read More: https://bit.ly/ClimateChnages

Scope 2 Emissions (Indirect):

Scope 2 emissions are what a company purchases from a utility or other supplier. While the emissions from these sources occur at the facility where this energy is generated, they are attributed to the company that consumes the energy.

Examples:

• Purchased electricity like electricity used to power computers, air conditioning, lighting, refrigeration, electronic systems, and cooling systems.
• Purchased steam for manufacturing processes like chemical production and food processing plants, or for heating large buildings.
• Purchased Heating or Cooling which heat buildings from a central source, or boiler systems sourced externally or air conditioning or refrigeration systems.

Challenges:

• No ability to influence or control how the grid generates electricity
• The grid may be heavily dependent on fossil fuels
• Insufficient infrastructure to reduce emissions quickly.

Read More: https://bit.ly/LifeCycleAssesment

Scope 3 Emissions (Other Indirect):

Scope 3 emissions are a little more complicated. These are the emissions a company or organisation is responsible for across its entire value chain (Upstream: emissions from mining metal, making parts, and delivering them to your factory and Downstream: emissions from customers driving the car, and how it’s disposed of at end-of-life). This can be from buying products or services from a supplier, all the way through to when customers use their product or service. Scope 3 emissions are typically the biggest of the three scopes (More than 70% contribution).

Upstream Emissions:

1. Purchased Goods and Services
2. Capital Goods
3. Fuel- and Energy-Related Activities (not included in Scope 1 or 2)
4. Upstream Transportation and Distribution
5. Waste Generated in Operations
6. Business Travel
7. Employee Commuting
8. Upstream Leased Assets

Downstream Emissions:

1. Downstream Transportation and Distribution
2. Processing of Sold Products
3. Use of Sold Products
4. End-of-Life Treatment of Sold Products
5. Downstream Leased Assets
6. Franchises
7. Investments

Read More: https://bit.ly/CircularEconomyPrinciples

Examples:

• Purchased goods and services, like the production of raw materials like metals, plastics, and textiles.
• Capital Goods like the production of durable goods like machinery, equipment, and buildings.
• Fuel and energy-related activities like fuels and energy bought by a company that are not accounted for in Scope 1 or Scope 2.
• Transportation and distribution of raw materials and goods to a company.
• Business Travel
• End-of-life treatment

Read More: https://bit.ly/SDGCircularity

Challenges:

• Companies face high costs and investment requirements
• Resistance to change
• Limited tools for accurate measurement
• Varying regulations
• Integration with business strategy
• Impact on stakeholder relationships

Read More: https://bit.ly/17SDGGoals

Conclusion:

Scope 1, 2, and 3 emissions categorise a company’s greenhouse gas output. Scope 1 covers direct emissions from owned sources, Scope 2 includes indirect emissions from purchased energy, and Scope 3 involves all other indirect emissions across the value chain. Monitoring them supports sustainability, compliance, and climate action goals.

Monitoring Scope 1, 2, and 3 emissions is crucial for understanding a company’s full environmental impact. It enables effective carbon reduction strategies, ensures regulatory compliance, enhances transparency, and supports sustainability goals. Tracking all scopes also helps improve efficiency, build stakeholder trust, and drive long-term climate resilience and competitiveness.

Read More: https://bit.ly/3PillersSustainability

Read More: https://bit.ly/ISO59000Series

References:

ISO 14064

GHG Protocol

Industry Experts

This is the 232^nd article of this Quality Management series. Every weekend, you will find useful information that will make your Management System journey Productive. Please share it with your colleagues too.

In the words of Albert Einstein, “The important thing is never to stop questioning.” I invite you to ask anything about the above subject. Questions and answers are the lifeblood of learning, and we are all learning. I will answer all questions to the best of my ability and promise to keep personal information confidential.

Your genuine feedback and response are extremely valuable. Please suggest topics for the coming weeks.