Organisational and operational boundaries are fundamental concepts that outline key characteristics of any GHG inventory. They help both internal and external stakeholders in addressing important queries related to corporate GHG emissions tracking.
GHG emissions are categorised into three scopes: Scope 1 are direct emissions sources that are owned or controlled by a company, whereas scope 2 and 3 indirect emissions are a consequence of the activities of the company but occur from sources not owned or controlled by it.
This diagram illustrates how these sources play a role in the value chain of a business.
While it might be challenging to track Scope 3 emissions as it requires a lot more data from a company’s clients and suppliers, it is crucial to measure this scope as it makes up 65–95% of most companies' carbon impact.
In this figure, it is evident that Scope 3 needs to be addressed in a company’s GHG accounting.
Scope 1 emissions refer to direct GHG emissions produced from sources that are owned or controlled by a company. This includes emissions from on-site combustion of fuels, industrial processes, and transportation of owned or controlled vehicles. They are considered the most direct and immediate responsibility of the organisation.
Direct GHG emissions are principally the result of the following types of activities:
Generation of electricity, heat, or steam through the combustion of fuels.
Manufacturing or chemical processing of chemicals and materials.
Transportation of materials, products, waste, and employees in company-owned or controlled mobile combustion sources.
Fugitive emissions resulting from intentional or unintentional releases of refrigerant gases within air conditioning, (e.g. equipment leaks, hydrofluorocarbon emissions during the use of refrigeration).
Reducing energy consumption in facilities and buildings: Unplug appliances and power down computers and other electronic equipment at night. Run fans to keep air flowing throughout the space to help HVAC systems run more efficiently.
Increasing energy efficiency: Adding or replacing insulation can help prevent energy loss and significantly reduce emissions
Installing energy efficient appliances: Energy label ratings are given to products that meet energy efficiency standards, and can help organisations make better decisions about the appliances they use in their premises
Scope 2 emissions represent indirect GHG emissions associated with the generation of purchased electricity, heat, or steam consumed by an organisation. These emissions are generated off-site, rather than the organisation's own facilities.
Though indirect, Scope 2 emissions are still under the organisation's control through purchasing decisions. For example, purchased electricity represents one of the largest sources of GHG emissions and the most significant opportunity to reduce Scope 2 emissions.
Companies can usually calculate scope 2 emissions based on the consumption outlined in their energy bills. Accounting for these emissions allows them to assess the risks and opportunities associated with changing electricity and GHG emissions costs.
Investing efficient equipment and infrastructure
Switching to renewable electricity: Emerging green power markets provide opportunities for some companies to switch to less GHG-intensive sources of electricity
Installing an efficient on-site co-generation plant: Particularly if it replaces the purchase of more GHG-intensive electricity from the grid or electricity supplier
Collecting and reporting data on your Scope 3 emissions: With this data they can identify hotspots and develop strategies to reduce GHG emissions
Providing incentives and guidance to suppliers to support their decarbonisation journey: Work with suppliers to help them adapt more sustainable production practices
Making products and packaging recyclable whenever possible: Recycling helps reduce GHG emissions by reducing energy consumption and the amount of waste decaying in landfills
Writing refreshed policies on business travel: Business travel is a significant contributor to emissions and usually avoidable
We dive deeper into Scope 3 emissions with this article, Managing Scope 3 emissions.
Biogenic CO2 refers to CO2 emissions from biological origins (e.g. biofuel combustion, biogas production) as opposed to CO2 emissions from fossil fuels. Biogenic CO2 emissions are often referred as ‘short-cycle’ carbon. As such, they fall outside of the established scopes.
However, as companies turn to biogenic alternatives in their operations, biogenic CO2 emissions have increased over the years and can potentially hinder progress toward net-zero goals.