Greenhouse Gas Accounting and Carbon Emissions Scopes
Carbon emission scopes 1, 2, 3 are the three recognized scopes for carbon (GHG) accounting. GHG accounting is a corporate or organizational assessment that measures the direct and indirect carbon emissions that contribute to a company’s or entity’s carbon footprint. Carbon emissions calculations are important when considering the sustainability of any operation. A corporate or business carbon footprint calculation can be used towards reporting, marketing, and risk mitigation. Below is a short review of the three GHG emissions scopes and what they mean to businesses aimed at making sustainability improvements.
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Carbon Accounting Tools and Calculators
There are many carbon accounting tools available based on the standards and guided framework set by the Greenhouse Gas Protocol (GHG Protocol). The GHG Protocol provides the latest tools and training for counting carbon emissions which are used by a variety of entities such as governments, industry associations, NGOs, businesses and other organizations. Their GHG Emissions Calculation Tool is a free, Excel-based tool that allows organizations and businesses to self-calculate their GHG emissions. Additionally, they provide a review service that offers guidance for an organization to cut their carbon emissions.
Carbon Emissions Scope 1
Scope 1 includes all direct emissions from the activities of an organization or under their control. This includes fuel combustion on-site such as gas boilers, fleet vehicles and air-conditioning leaks.
Here are some ways to reduce and manage direct emissions such as:
- Control the loss of energy from your business locations. Controlling the amount of air conditioning and heating loss can cut back on how much energy you use. Air leaks around windows, doors, and garages should be completely sealed. Correct installation of eco-friendly insulation can also reduce energy loss from buildings. Modifications and updates that follow the Leadership in Energy and Environmental Design (LEED) qualifications will help you improve your building’s efficiency in many ways.
- Purchase energy efficient appliances and equipment. An investment in the latest, most energy efficient appliances will not only lower your emissions output, but also save you money. Energy Star offers many free return calculators on their website, including the Cash Flow Opportunity Calculator that can ease financial concerns that may come up when making large investments on boilers, water heaters, air conditioning and commercial-sized equipment.
- Use electric or hybrid vehicles in your transportation fleet. While purchasing an electric or hybrid vehicle is an ambitious investment, there are federal tax credits and state and utility incentives to help offset the high upfront costs. In the U.S., this is the Plug-In Electric Vehicle (PEV) tax credit along with numerous incentives that vary by state. Further, electric vehicles can produce a favorable ROI on fuel and other vehicle maintenance costs. In fact, electric vehicles are far more energy efficient with only a 15-20% energy loss compared to a 64-75% energy loss for gasoline engines.
Carbon Emissions Scope 2
Scope 2 includes indirect emissions from electricity purchased and used by the organization. Emissions are created during the production of the energy and eventually used by the organization.
Here are some ways to reduce and manage Scope 2 indirect emissions:
- Purchase alternative energy from utility providers with clean energy options. Reach out to your local energy and utility providers and ask for their energy mix percentages. Those who use more renewable energy power or less harmful fossil fuels will be more sustainable and will reduce the amount of carbon emissions your business is responsible for. Some also offer a “clean energy only” option for a premium.
- Purchase carbon off-sets. For the emissions that your business must use or cannot control, a purchase for renewable energy credits or carbon off-sets will help you decrease your carbon footprint.
Carbon Emissions Scope 3
Scope 3 emissions cover all other indirect emissions from activities of the organization, occurring from sources that they do not own or control. These are usually the greatest share of the carbon footprint, covering emissions associated with business travel, procurement, waste and water.
Here are some ways to reduce and manage Scope 3 indirect emissions:
- Cut back on travel. Due to the COVID-19 pandemic, many companies have made the switch to remote work and are continuing to hold meetings online instead of in-person. While it has taken time to adapt to such an abrupt change, these virtual interactions have substantially lowered travel emissions worldwide.
- Use transportation methods that produce less GHG emissions. If you and your employees must travel, there are some transportation methods more eco-friendly than others. For instance, traveling by train produces a fraction of the carbon emissions per traveler than those in cars, buses and planes. This of course depends on your proximity to train stations and other forms of public transit. Another idea is to consider buying carbon offsets to cover employee air travel.
- Encourage employees to cut back their commute emissions. Consider organizing a carpooling program for employees or set up a rideshare pickup system (i.e. Lyft, Uber) to combat the emissions produced from employee commutes. Additionally, adding bicycle spaces or installing electric vehicles charging stations close to the entrances would also be great encouragement for commuters to think more sustainably.
- Create a green purchasing policy for your business. Procurement can be one of the main expenses for a company and, subsequently, a huge contributor to their greenhouse gas emissions. Buying locally or from sources that have sustainability initiatives can cut the emissions surrounding your business purchases. Check out our article to find out more about green procurement and how to design one for your business.
- Cut back on waste generated. Recycling is much better for sustainability than sending items to a landfill, but it also produces emission when recycled products are processed. Practicing efficiency and innovation that leads to less waste all together will reduce carbon emissions related to waste streams. Six Sigma is a set of tools and techniques that help achieve process improvement. The main objective of the Six Sigma process is to eliminate errors and process variation. Contracting or having a Six Sigma expert amongst your company can help cut back on the amount of waste your business produces.
- Practice sustainable investing. Your company investments should be sustainably minded and reflect your carbon emissions standards. Choosing portfolios and companies with Environmental, Social and Corporate Governance (ESG) practices will ensure the extra money your business invests will contribute to sustainability and not solely used to benefit shareholders. You can also encourage sustainable investing by offering sustainable portfolios for employees’ 401k plans.
Use GBB Tools to Target Carbon Emission Scopes 1, 2, 3
If you are interested in lowering your emissions output, Green Business Bureau offers green initiatives that align with carbon emissions scopes 1, 2 and 3. These initiatives can be prioritized and completed at your own pace using the GBB EcoPlanner.
Initiatives Related to Scope 1
Initiatives Related to Scope 2
Initiatives Related to Scope 3
Carbon Emission Scopes 1, 2, 3: Conclusion and Recap
Carbon emissions Scopes 1, 2, 3 are an important aspect to consider for a business striving to be more sustainable. The idea of accounting for all GHG emissions your company produces can be overwhelming. However, frameworks such as the GHG Protocol break them down into three scopes that can be tackled separately.
Scope 1 considers all emissions under the direct control of the company. This includes emissions produced onsite and vehicle fleet emissions. Companies can cut back on these emissions by reducing energy waste from buildings and adding electric or hybrid vehicles to their fleet.
Scope 2 emissions are produced indirectly from purchased power and utilities. To cut back in this area, reach out to local energy providers to acquire information about the fuels they use, and purchase from the one with the most sustainable fuel mix.
Scope 3 emissions account for the largest part of a company’s carbon footprint, and, whether upstream or downstream, these are emissions associated with all company activities such as: procurement, waste, investments, leased assets, life cycle of products and supply chain.
About the Author
Natalie Sheffey Soto
GBB Green Ambassador
Natalie Sheffey Soto is a content writer for the Green Business Bureau. Growing up in the Appalachian Mountains, she developed a love for the natural environment and has committed herself to a career working to protect it. She is currently pursuing a Master’s in Global Sustainability with a concentration in Sustainable Business at the University of South Florida. Along with her outdoor enthusiasm, Natalie loves to play sports and foster animals for local rescues.