Scope 1, 2, 3 emissions explained for Small and Medium-Sized Businesses

In the pursuit of sustainability, understanding the different categories of greenhouse gas (GHG) emissions is crucial for businesses of all sizes. The GHG Protocol Corporate Standard classifies emissions into three distinct scopes – Scope 1, Scope 2, and Scope 3. This classification helps businesses identify and manage their carbon footprint more effectively. Let's delve into what each scope entails and provide examples relevant to small and medium-sized enterprises (SMEs).

Scope 1: Direct Emissions

Scope 1 emissions are direct GHG emissions that occur from sources owned or controlled by the company. These are the emissions you produce directly through your business activities.

Examples for SMEs

• Manufacturing: A small furniture manufacturing workshop emits CO2 directly from the combustion of wood waste used to heat the facility.
• Restaurants: Direct emissions from cooking with gas stoves.
• Transportation: A logistics company's emissions from its fleet of delivery vehicles.

Key Considerations

• Inventory all company-owned or controlled sources of emissions.
• Focus on energy efficiency and consider transitioning to cleaner energy sources for direct activities.

‍

Scope 2: Indirect Emissions from Purchased Electricity

Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company.

Examples for SMEs

• Offices: Emissions associated with the electricity used to power computers, lighting, and HVAC systems in an office building.
• Retail Stores: The CO2 emissions resulting from electricity used to power point-of-sale systems and keep the lights on.
• Service Industries: Emissions from the electricity consumed by data centers that host the servers of a tech company.

Key Considerations

• Consider purchasing green power, such as wind or solar energy, to reduce Scope 2 emissions.
• Invest in energy-efficient appliances and lighting to decrease overall electricity consumption.

‍

Scope 3: All Other Indirect Emissions

Scope 3 emissions are all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, both upstream and downstream.

Examples for SMEs

• Supply Chain: Emissions associated with the production of materials purchased by a clothing boutique from suppliers.
• Business Travel: Emissions from flights taken by employees of a consulting firm.
• Product Use: Emissions resulting from the use of a product sold by a company, like the fuel consumption of vehicles sold by a car dealership.
• Waste Generated: Emissions from the disposal and treatment of waste generated in the operations of a food packaging company.

Key Considerations

• Engage with suppliers to understand and potentially reduce the emissions associated with purchased goods and services.
• Consider the end-of-life impact of your products and explore opportunities for recycling or more sustainable waste management.
• Incorporate carbon offsetting strategies for emissions that cannot be directly reduced.