At the heart of any business’s climate action strategy is a thorough and credible calculation of your greenhouse gas (GHG) emissions underpinned by a clear understanding of the different emission sources. Creating this is a real challenge for companies of every size, but it is the critical first step in identifying and establishing realistic and achievable reduction targets to minimise your impact on the climate.
In this guide, we’ll take you through what you need to know. We’ll help you identify and understand your main emission sources and explain how to categorise them into scope 1, scope 2, and scope 3 emissions.
The global community has recognised the urgent need to reduce GHG emissions to prevent further global warming. In the 1997 Kyoto Protocol, 192 countries agreed to commit to binding targets and measures for combatting climate change for the first time in history. This agreement forms the basis for the Greenhouse Gas (GHG) Protocol which sets a clear, and globally consistent, set of standards for monitoring, and reporting on, your progress.
What are GHGs and how do they affect the climate?
The term “greenhouse gases” (GHGs) refers to a variety of different gases that trap heat in the Earth’s atmosphere. These GHGs absorb the sun’s energy and slow the rate at which that energy escapes into space. In this way, GHGs effectively insulate the Earth like a blanket. This is known as “the greenhouse effect” and is a natural phenomenon, without which life on earth would not survive. By storing heat in the atmosphere, the greenhouse effect stops the whole planet from freezing. However, over hundreds of years, we have disrupted the natural balance of the greenhouse effect.
Human actions like cutting down forests and burning fossil fuels, have upset the delicate balance of the greenhouse effect. The result is a planet warming at the fastest rate for millennia, and global industrialisation has, effectively, turbo-charged that change. This is why the world came together to agree legally binding limits and targets in the Paris Agreement. This sets out a shared global responsibility to reduce GHG emissions and prevent the global temperature from rising any more than 1.5 °C above pre-industrial levels by 2050.
What is CO2e?
Greenhouse Gases have different levels of potency, and these are determined by two things. How much energy they absorb (their radiative efficiency) and how long they stay in the atmosphere (their lifetime). Combining these two figures allows us to create a value for each of the different GHGs. This is called their Global Warming Potential (GWP).
Climate Scientists designed GWP to enable us to compare the global warming impacts of different gases. The higher the GWP, the more that gas warms the earth. Methane (CH4) only stays in the atmosphere for around 12 years but while it is there, it is nearly 30 times more potent than CO2, which stays in the atmosphere for thousands of years. Nitrous oxide (N2O) stays in the atmosphere for over 100 years and is over 273 times more potent than CO2.
As the most widely emitted, and best understood, of the GHGs, CO2 was selected as the basis for a standard equivalent measure for all other greenhouse gas emissions. This is known as “CO2e” and enables us to simplify and standardise our measurement and reporting of the warming effect of different gases.
What’s the difference between scope 1, 2, and 3 emissions?
The idea of “scopes” comes from a project management concept which refers to all the processes and resources needed to complete a project. By separating direct and indirect emission sources, this avoids two companies being held responsible for the same emissions.
The GHG Protocol breaks down a business’s GHG emissions into three categories as follows:
Scope 1
These include direct emissions from sources your business owns. This might be emissions from on-site energy generation, such as natural gas and other heating fuels. It might be refrigerants escaping from freezers or aircon units. It could be emissions from internal combustion engines in any vehicles that your business owns. Basically, it is any emissions coming directly from equipment owned by your business.
Scope 2
These are actually much larger than many businesses realise – accounting for more than a third of all global GHGs. This makes them a ripe target to reduce your business’s GHG emissions. Scope 2 emissions include indirect emissions from purchased or acquired energy, such as electricity, steam, heat, or cooling, that is generated off-site and consumed by your business. Electricity purchased from a utility company is generated offsite, so this would be classed as an indirect emission and recorded as such.
Scope 3 – indirect value chain emissions
Scope 3 includes all the other indirect emissions that occur in the value chain of your business. These are the emissions from activities of assets that are entirely out of your control, but which are part of your value chain. This could be the energy used to transport and wash your laundry or the emissions arising from your meat suppliers. Even though these emissions are out of your direct control, they could well represent the largest portion of your GHG emissions. As a result, getting to grips with them could have a major impact on your carbon reduction strategy.
Scope 3 emissions figures will be based on financial information you supply and fall into two distinct categories. These are “upstream emissions” – which come from the production and transportation of the products and services you buy or lease – and “Downstream Emissions” which come from the use and disposal of those products.
Not every scope 3 emission category will be relevant for every company, but knowing and understanding them is very useful to be able to set, and put in place, effective reduction strategies. For example, emissions arising from your staff’s commuting would be classified as a scope 3 upstream emission so helping your team reduce their carbon footprints will also help lighten yours.
We hope this gives you a clearer picture of how carbon tracking works and what you need to do to reduce your corporate carbon emissions. This blog only touches the surface, but our Carbon Tracker will help you achieve a detailed analysis of your CO2e emissions. It is user-friendly and available to use for Green Tourism Members.
