Carbon Accounting for Beginners: Master the Basics of Scope 1, 2 and 3 Emissions

Introduction

Feeling overwhelmed by the complex world of carbon accounting and afraid of getting it wrong? You’re not alone. This guide is here to turn the seemingly intricate maze of Scope 1, 2, and 3 emissions into a straightforward path you can confidently navigate. We’ll break down each scope in plain English, showing you not just what they are, but how they fit into the bigger picture of your business’s sustainability efforts.

The Scopes Simplified

Scope 1: The Energy You Control

Scope 1 emissions are from sources you own or control, like company vehicles and boilers. They’re your direct carbon footprint – the most immediate and actionable. Reducing Scope 1 can be as straightforward as optimizing energy use and embracing renewable solutions.

Scope 2: The Energy You Buy

Scope 2 emissions come from the energy you purchase, like electricity and heating. Though not produced by you, they’re still your responsibility. Reducing these involves energy-efficient practices and sourcing renewable energy.

Scope 3: The Hidden Majority – Up and Down Your Value Chain

Scope 3 emissions are often the bulk of your footprint, covering all other indirect emissions. They’re trickier, involving everything from business travel to the end-of-life treatment of your products. They involve your wider ecosystem of suppliers, employees and customers and a collaborative approach is needed. Understanding Scope 3 is crucial for a full emissions picture and often where significant changes can be made.

Why Care About All Three?

Embracing all three scopes is vital for a holistic approach to sustainability. Scope 1 and 2 are more controllable and offer quick wins, but Scope 3’s depth can reveal more significant, long-term benefits – from operational efficiencies and employee engagement to customer trust and industry recognition.

Ready to delve deeper into real-world examples? Explore how one of our clients tackled their Scope 3 emissions.

Breaking Down Scope 1 Emissions: The Energy You Control

What exactly are Scope 1 Emissions?

Scope 1 emissions are the direct result of your business activities. These emissions come from the fuel your company burns, and the vehicles you own. They include a variety of gases, from the well-known CO2 to less common but impactful ones like SF6 and PFCs.

How to Measure and Manage?

Measuring Scope 1 is all about looking at the direct sources you control. It involves meticulous tracking and reporting – think of it as keeping a carbon diary for your business. By understanding your Scope 1 emissions, you’re better equipped to reduce them, perhaps by switching to renewable energy or making your operations more energy-efficient.

Categories within Scope 1:

Stationary Combustion: This is about the fuel you burn at a fixed source. Imagine a generator at your office running on diesel – that’s stationary combustion.
Mobile Combustion: Here, we’re talking about vehicles. If your company owns cars or trucks, the emissions they produce fall under this category. It’s a common source of Scope 1 emissions.
Fugitive Emissions: Think of these as sneaky emissions. They’re the leaks – like refrigerants escaping from your air conditioning systems, both onsite and during transit.
Process Emissions: These are specific to manufacturing processes. For instance, if your company is brewing beer, the emissions from the chemical processes involved would be categorized here. Assessing these often requires a Lifecycle Assessment (LCA) to pinpoint emission factors accurately.

Unpacking Scope 2 Emissions: The Energy You Purchase

What are Scope 2 Emissions?

Think of Scope 2 emissions as the carbon footprint of the energy you buy. This includes the electricity to light up your offices, the heat to keep them warm, and the steam used in your operations. Unlike Scope 1, these emissions aren’t produced directly by you, but they’re still on your tab because you pay for this energy.

Measuring and Reducing Scope 2

Measuring Scope 2 is about keeping tabs on the energy you purchase. Look at your electricity, heating, and cooling bills – they’re the starting point. Reducing these emissions not only helps the environment but can also lead to cost savings through reduced energy bills and enhanced energy efficiency.

Remember, every kilowatt-hour of energy saved or shifted to renewable sources is a step forward in your sustainability journey. Reducing these emissions can be done in several ways, such as:

Boosting Energy Efficiency: Simple steps like improving building insulation can significantly cut down the energy needed, reducing your Scope 2 emissions.
On-Site Renewable Energy: Installing solar panels or wind turbines can help generate your own clean energy, reducing reliance on purchased energy.
Choosing Renewable Energy Sources: Opting for renewable energy from your utility provider can also shrink your Scope 2 footprint, as you’ll be using energy generated from sources like wind or solar instead of fossil fuels.

Categories within Scope 2:

Electricity: In the UK, most of our electricity is purchased offsite. If you’re buying your electricity, it’s part of your Scope 2 emissions.
Heat and Gas: While heat and gas often fall under Scope 1, in the UK, they can also be part of Scope 2 if you’re purchasing these energies and not generating them onsite.

If you’re curious about your company’s carbon footprint across Scope 1 and 2, try our free Carbon Snapshot tool. You’ll get a start on knowing your carbon emissions.

Demystifying Scope 3 Emissions: Up and Down Your Value Chain

What are Scope 3 Emissions?

Scope 3 is the ‘behind-the-scenes’ of your carbon footprint. These emissions aren’t directly produced by your company nor do they come from the energy you buy. Instead, they’re the result of all the other activities related to your business, from the goods you purchase to the way your products are disposed of at their end of life. It’s a vast and varied category that often forms the bulk of a company’s emissions.

Want to understand how to decode scope 3 to get ahead? Check out our guide to supplier engagement and collaboration.

Breaking Down Scope 3 Categories

Purchased Goods and Services: Everything your company buys in a year – from daily coffee to outsourced services.
Capital Goods: Assets that stick around for a while, like laptops, machinery, and land equipment.
Fuel & Energy-Related Activities: Energy use that doesn’t fall under Scope 1 or 2, like oil you buy but don’t burn yourself.
Upstream Transportation & Distribution: Anything coming into your company or deliveries you pay for, including transportation owned or leased.
Waste Generated Operations: How your waste is managed, whether it’s recycling, composting, or landfill.
Business Travel: When employees travel using transport services not owned by your company.
Employee Commuting: Daily travel from home to work, including remote working emissions.
Upstream Leased Assets: Assets you don’t own but use, like rented spaces and equipment.
Downstream Transportation & Distribution: Anything leaving your company or dleiveries you pay for.
Processing of Sold Products: Emissions from further processing of products you sell.
Use of Sold Products: Emissions from the usage of your products over their lifetime.
End-of-Life Treatment of Sold Products: How your products are disposed of.
Downstream Leased Assets: Items you lease out to others.
Franchises: Emissions from franchises you own.
Investments: Emissions from companies you invest in.

Why Scope 3 Matters

Tackling Scope 3 can be a game-changer. It’s where you often find the most significant opportunities for reducing your carbon footprint. It’s about understanding the full extent of your environmental impact and taking steps to mitigate it. This could involve choosing more sustainable suppliers, redesigning products for better end-of-life outcomes, or encouraging greener practices across your supply chain.

Start Your Journey

Whether you’re ready to tackle Scope 1, 2, or 3, Our Carbon is here to guide you every step of the way. With clear, practical advice and tools, we’ll help you turn sustainability from a challenge into an opportunity for growth and leadership.