Scoping Out Scope 1, 2, and 3

Many regions of the world, particularly in Western Europe, continue to prioritize greenhouse gas and sustainability regulations.

This global focus on emissions means that even if American companies are now taking a relaxed view on such things as Scope 1, 2, and 3, they will need to adhere to them if they want to do business in many other parts of the world.

This interconnectedness underscores the importance of understanding and managing these emissions.

As to Scope 1, 2, and 3, many of us may be unclear what these terms refer to. To empower you, here is a practical and easy-to-understand guide that should help. We will explain these terms and, taking a step further, use real-world situations, making it easier for you to grasp and apply them in your business.

Scope 1

Scope 1 emissions are referred to as direct emissions. They are greenhouse gases that an organization emits from sources it owns or controls directly.

For example, say you are a distributor with a fleet of gas-powered trucks. These trucks emit greenhouse gas emissions as they are driven. Because you own or control their use, these are direct emissions from your company.

Managing and reducing these emissions is up to you. In other words, you are in the driver's seat when it comes to reducing these Scope 1 emissions.

Scope 2

Scope 2 emissions are indirect emissions.

As defined by the Greenhouse Gas (GHG) Protocol, these indirect emissions are produced from the generation of electricity, steam, heating, and cooling purchased for your facility. These emissions occur at the facility where the energy is generated, not where it is consumed.

This means your organization is not responsible for them. Still, your organization should address Scope 2 emissions. To do so, look for outside vendors that have taken steps to reduce their Scope 2 emissions by purchasing green energy, for instance, from wind farms.

Scope 3

Scope 3 emissions get a bit more intricate and slightly more complicated but understanding Scope 3 emissions is crucial for any organization wanting to reduce its overall carbon and environmental footprint.

Scope 3 emissions are indirect greenhouse gas emissions in a company's value chain that aren't directly under its control. These include upstream activities (like the materials purchased to produce goods and services) and downstream activities (emissions released when the consumer or purchaser uses the product). Examples include:

????????? Emissions the result of collection raw materials for products.

????????? Employee business travel and commuting.

????????? Waste generated in business operations.

In other words, Scope 3 emissions occur outside the company's boundaries but result from its business activities.

While Scope 3 emissions can be harder to calculate, doing so and reducing these emissions can pay dividends. Like most sustainability practices, this can lead to significant cost savings because operational efficiencies are improved. Controlling these emissions can also improve a company's standing among investors.

Even more, managing Scope 3 emissions reduces the risk of fines when marketing products or services globally and often leads to innovation and new product development.

Let's remember. Sustainability is all about innovation: exploring new ways to monitor, manage, and reduce greenhouse gas emissions to protect our planet.

-Steve