Scope 1, 2, and 3 emissions – it’s a phrase often used in relation to businesses measuring their carbon footprints. But what do these categories of emissions actually refer to??

Back in 2001 the Greenhouse Gas Protocol released a standardised framework for businesses to measure their emissions, in which they split emissions into 3 ‘scopes’, as the below diagram depicts:

Scope 1

Scope 1 emissions are direct emissions as a result of business activities i.e. from sources owned or controlled by the business itself.

That includes:

• Stationary combustion: emissions from fuels (oil or natural gas) used in business activities e.g. gas boiler used for heating company-owned buildings or in manufacturing.
• Mobile combustion: emissions from burning fuel to power company-owned vehicles e.g. delivery vans.
• Fugitive emissions: leaks or unintended emissions e.g. leaks from a faulty air conditioning unit.
• Process emissions: released during industrial processes e.g. fumes from a factory, CO2 released in cement production etc.

Scope 2

Scope 2 are indirect emissions released from the energy purchased by a business – electricity, steam, heat or cooling.

For most businesses, scope 2 emissions will be exclusively the electricity they purchase from a utilities company – used to heat the company's buildings, be it offices, manufacturing sites, warehouses, retail spaces or other.

Scope 3

Scope 3 encompasses all other indirect emissions that occur in the value chain of a company, but aren’t included in scope 2. Scope 3 emissions are almost always by far the largest portion of a company’s emissions, but are much more complicated to measure and tackle as they aren’t owned or controlled by the company directly.

Scope 3 emissions includes both:

Upstream emissions

These are any activities during production – from your suppliers. That includes:

• The goods and services you purchase to produce your end product or service e.g. raw materials, packaging, cloud computing services (take a look at how we reduced emissions at Lune by switching from Intel to ARM AWS)
  
• Transportation e.g. between your suppliers, or from suppliers to your manufacturing plant or warehouse
  
• Transporting materials and goods
  
• Employee commuting to/from the place of work
  
• Business travel.

Downstream emissions

These are activities after production – the distribution channels for your product or service. That includes:

• Transportation to the end customer i.e. any logistics services you use
  
• The lifetime end use of the product or service e.g. the emissions from energy needed by the customer to use your product

So, to summarise the difference between scope 1, 2 and 3 emissions:

Should you include scope 3 in your company calculations? 🧮

A big question is whether companies should be including scope 3 emissions when they measure their carbon footprint.

Scope 3 emissions represent the vast majority of a company’s carbon footprint across the value chain, so it’s important that they’re included in business emissions calculations, to get a real representation of environmental impact. 

Lots of businesses ignore their scope 3 emissions, often because they’re a lot more complex than scope 1 and 2. 

But there’s opportunity in the complexity. 

To address scope 3 emissions means looking beyond your own immediate activities as a business and collaborating on solutions with your suppliers and peers – which means increased potential for positive impact.

Scope 3 emissions are also vital to the true definition of net zero – so if your business has goals to reach net zero emissions, you need to be including how to address and minimise scope 3 emissions in your company's net zero journey.

For advice on how to approach scope 3 emissions, take a look at the guidance from the Greenhouse Gas Protocol.