Throughout the last decade, corporate social responsibility has become increasingly prevalent as a number of influential companies are publicly releasing information about their environmental and social impact and working to reduce that impact. As the global temperature rise creeps toward 2° Celsius, preventing a permanent alteration of the planet requires a fundamental shift in business models. If the global population does not achieve drastic reductions in greenhouse gases, businesses will be unwittingly changed by the innumerable effects of climate change.
The first step to reducing the environmental impact of a company is to determine the business' current emissions. A leading emissions accounting mechanism is provided through the GHG Protocol. Emissions are divided into three "scopes," which show the different areas of emissions. Learning these three scopes is essential to mitigate net impact within each.
Scope 1: Direct Emissions
Emissions from Scope 1 include all the direct emissions that come from a business. According to the GHG Protocol, direct emissions are “emissions from sources owned or controlled by the reporting entity.” Some of the most common sources are coal-powered heating systems and gas-fueled vehicle emissions. However, depending upon practices, some businesses may release additional fumes from production or manufacturing. For example, a power plant owned by a corporation will release emissions from the combustion that comes with mass energy distribution. This business would account for these emissions in Scope 1. Meanwhile, a tech startup might have Scope 1 emissions only from heating their office space and using gas for company vehicles.
Scope 2: Privately Owned Indirect Emissions
Scope 2 accounts for most emissions from energy not directly produced by fuel combustion or natural gas usage. For most businesses, electricity is the only source of emissions in this scope. Other examples of sources include the bi-products of purchased energy sources such as steam, heat, and cooling. The power grid that provides electricity to companies relies upon natural gas. Therefore, when a company purchases a monthly electricity service or invests in an electric HVAC system, the emissions from their energy usage are indirect. Further, companies using electric vehicles for transportation must consider emissions under this scope.
Scope 3: All Other Indirect Emissions
Scope 3 includes all other indirect emissions. Emissions along the value chain from employee commute to product disposal account create a massive portion of most businesses’ carbon footprints. All downstream and upstream actions performed by a company must be accounted for in this scope. This includes the transportation of company product, business travel, products purchased for the business, and consumer waste.
Corporations must focus on reducing their impact for all scopes of carbon emissions. The true carbon footprint of a company cannot be determined through one scope alone. When companies look at their impact through each of these scopes, they can create a resilient and sustainable business.
Interested in learning the carbon footprint of your business? Request a demo from Ecolytics! We help companies determine their Scopes 1, 2, and 3 emissions. We also recommend efficiency measures to reduce their impact and create a more sustainable business. To keep up with Ecolytics, follow us on our social media platforms linked below!
