Understanding Scope 1 and 2 greenhouse gas emissions

“Mapping your organisation’s Scope 1 and 2 emissions is an essential step on your sustainability journey – both from a compliance perspective and as a catalyst for impactful climate action.”

A holistic assessment of your organisation’s carbon footprint requires you to identify the precise source of your greenhouse gas (GHG) emissions.

Specifically, whether they’re generated by company-owned assets or sources in your wider value chain. But with many potential sources to consider, getting clarity on the exact origin of emissions is essential to moving forward on your sustainability journey.

There are three distinct emissions ‘Scopes’, as defined by the Greenhouse Gas (GHG) Protocol: Scope 1 (direct emissions from owned sources), Scope 2 (indirect emissions from energy generation) and Scope 3 (other indirect emissions).

Read on to find out how to efficiently measure and report your Scope 1 and 2 emissions. To learn more about Scope 3 emissions, read our next article.

Why do you need to measure your company’s carbon footprint?

As businesses face calls for more transparency on their environmental impacts, it’s essential to have an effective emissions inventory.

This allows you to provide transparent climate disclosures and comply with legislation such as the EU’s Corporate Sustainability Reporting Directive (CSRD). It also enables you to identify emission hotspots so you can optimise your operations and continually reduce GHG emissions.

Scope 1 and 2 emissions tend to be easier to measure than Scope 3 because they come from sources directly owned or controlled by your company.

Typical Scope 1 emission sources include offices, factories, company vehicles and on-site fuel combustion.

Scope 2 refers to emissions caused by the generation of energy purchased by your company. In this definition, ‘energy’ refers to electricity, heat, steam or cooling. Although these emissions are generated by the utility provider, they’re still part of your company’s carbon footprint.

What’s the best way to calculate Scope 1 and 2 emissions?

The data needed to calculate your Scope 1 and 2 emissions can often be found in your company’s own operational and financial records. For example, you can calculate the GHG emissions associated with your on-site fuel combustion by multiplying the amount of fuel used by the appropriate ‘emission factor’.

‘Emission factors’ refer to the tonnes of carbon dioxide equivalent (tCO₂e) emitted by a particular source (find out more in our article on carbon footprinting). Note that tCO₂e encompasses many different greenhouse gases besides CO₂, including methane, nitrous oxide and fluorinated gases.

To ensure high-quality carbon footprint calculations, it’s important to select the most relevant and up-to-date emission factors for each source. You should also carry out regular quality control checks to ensure that your data collection and calculation processes are producing representative results.

How can a carbon management accounting platform simplify the footprinting process?

Given the wealth of data and detail involved in carbon footprinting, the process can quickly become overwhelming. A great way to consolidate data and streamline calculations is to use a carbon accounting platform.

These digital services can help you implement a more structured approach to carbon footprinting by automating data collection and analysis, as well as reporting.

This means they can speed up the creation of your GHG inventory and inform your sustainability strategy. For example, the systems can highlight areas of your operations that are carbon ‘hotspots’, helping you target emission reductions.

What are the next steps on your sustainability reporting journey?

Mapping your organisation’s Scope 1 and 2 emissions is an essential step on your sustainability journey, both for compliance and as a catalyst for impactful climate action.

However, Scope 1 and 2 emissions are only part of the story. Indeed, for many companies, Scope 3 emissions make up the majority of their corporate carbon footprint.[1] And because they’re generated by third parties, these emissions are often more challenging to track and measure than Scope 1 and 2 emissions. Building a comprehensive GHG emissions inventory including Scopes 1, 2 and 3 therefore requires close collaboration, both internally and with external partners.

Read our next article to find out more about what it takes to map your Scope 3 emissions across the value chain.

Want to find out more about getting support with your company’s GHG inventory? Get in contact today for a free consultation with one of our experts.

[1] CDP. Only 37% of scope 3 emissions from European businesses are addressed by corporate decarbonization measures (2023). Available at: https://www.cdp.net/en/articles/companies/only-37-of-scope-3-emissions-from-european-businesses-are-addressed-by-corporate-decarbonization-measures (Accessed: 01 October 2024).