Are Carbon Accounting Scopes fit for purpose?

We seem to be spending a lot of time talking about which scopes to include in different policies, business plans and other assessments. We aren't talking enough about why we are grouping emissions in this way and whether it will drive the behaviours needed to decarbonise our economy.

A quick recap:

• Scope 1 covers direct emissions within a business's control
• Scope 2 covers indirect emissions from energy supply
• Scope 3 covers indirect emissions. It includes 14 potential categories covering the emissions an organisation can influence but not have direct control of, like how their employees commute to work, what their customers do with the materials they make or how the materials they purchase are made.
• There is also the lesser known Scope 4 which considers the wider use of products made, such as emissions avoided by using product A instead of product B. This is an interesting area of development, with the opportunity to drive decarbonisation behaviours in the design phase of a product's life cycle.

History of Scopes

Scope 1, 2 and 3 originate from the GHG Protocol, a globally recognised standard for disclosing corporate emissions. The first guidance was published over 20 years ago, with value chain emissions (Scope 3) guidance launching in 2011. The guidance has helped many companies navigate their emissions profile and identify "quick wins" to reduce emissions.

The world where the GHG Protocol was developed looked very different. It was the 1990s, Sustainable Development was the buzzword of the day, Net Zero was an unknown contender. We did not have the robust scientific evidence base we have now, or the recognise the need to decouple emissions from economic growth. We did not even have smartphones! The world has transformed.

The aim of the GHG Protocol was to encourage businesses to "do their bit", the guidance was therefore flexible enough to cover different business needs and allowed for offsetting for organisations who could not decarbonise their own operations.

The guidance is still a great starting point for SMEs and companies unfamiliar with their emissions footprint. Awareness has grown amongst businesses in large part due to this guidance. But global emissions have continued to rise over the past 20 years and digital technologies and tools have advanced greatly in this time. We can now identify methane emissions using satellites and use digital platforms to exchange emissions data or trade carbon credits.

Are "Scopes" becoming unhelpful buzzwords?

Scopes were designed to support a corporation in making climate related business decisions, but their application has become more universal and increasingly becoming language used by policymakers.

Given how flexible their interpretation is, I tend to get a bit nervous when a company states their Scope 3 emissions in terms of tonnes of Carbon Equivalent (tC02e). There is often limited transparency about what that figure includes; different categories of scope 3, the offset emissions, temporal boundaries used and the additionality of emissions.

Ultimately Scope 3 and Scope 2 is someone else's Scope 1, if we improved the reporting of emissions at source across our economy we should have a more transparent picture of a company's indirect emissions.

I also hesitate when policies target scope 2. Many energy consumers have little control over the emissions of their energy supplier and energy suppliers are often at the mercy of lengthy planning processes and legacy fossil fuel power stations. Electrification is the best way for most industries to decarbonise but should industries be penalised for switching to electricity if the supply is not yet decarbonised?

So what now?

Scopes were always designed with corporations in mind, they were about supporting climate related business decisions, not their consumers. There are other tools and guidelines for consumers to calculate their carbon footprints and for governments to model national emissions. There are tools to assess a products life cycle and guidelines to encourage circular economy principles. But the challenge with all these tools and guidelines is that they lack interoperability. We cannot add up all company emissions and consumer emissions to get the UK total. So what is the real figure? How do we make sure activities have a material effect on emissions reduction and support a global target of Net Zero?

We need to take stock and design a Carbon Accounting Framework that can leverage the tools and capabilities of our technology driven world. We need to stop conflating the act of holding emitters to account with emissions reporting - lets build a more complete picture of emissions to meet the needs of businesses, consumers and governments. Lets create a single source of truth to ensure emissions are actually reducing at the global scale needed. We need transparent emissions data to have a more open discussion around carbon accountability.

Key to the development of a Carbon Accounting Framework will be effective coordination and regulatory oversight. If you are interested in exploring what that might look like you can find some of my recent publications here:

• Carbon Accounting: The Future is Digital - Blog on Energy Systems Catapult website
• Complex carbon accounting ecosystem is holding industry back - Article in Energy Manager Magazine
• Carbon Accounting and Standards in Industry: A framework for Innovation and Growth - Report from Energy Systems Catapult.

As always, I am happy to have my thinking challenged, revised and improved through constructive discussions with industry and the wider carbon accounting community. It is only through engagement that we can develop and move towards a more inclusive low carbon economy.

Conclusion

So are Carbon Accounting Scopes fit for purpose? Scopes were fit for their original intended purpose, to increase awareness amongst corporations and encourage climate considerations in business decision making. However, they are not the only guidelines or terms we should be using to support our overarching goal - which is global emissions reduction. There is no one size fits all set of guidance that will give us a transparent picture of emissions and make 2+2 add up to 4.

Global emissions have not reduced since the GHG protocol guidelines were introduced so we need to take stock and leverage our increasingly digitalised world to improve access and transparency of emissions data. This will only be achieved through effective coordination, including international cooperation, and through good, independent, regulation to ensure all emitters are on a level playing field.

What kind of world do you want to live in? I want to live in a world where innovation is targeted to achieve a credible low carbon economy, supported by a robust evidence base. Ultimately, what we now need is to be able to track and trace emissions throughout our economy and supply chains, only then will we be able to establish an investment framework for innovators that truly decouples emissions from economic growth.