“ AS THE LEADER OF THE WORLD’S LARGEST ECONOMY AND THE LARGEST EMITTERS … WE EMBRACE OUR RESPONSIBILITY TO DO SOMETHING ABOUT IT”
- Barack Obama (Previous President of the United States of America)
When some people think of sustainability they often think of the individual’s responsibility, and some think about government, but today I am going to look at corporate responsibility. As I started to gain experience working within the sustainability field, I heard terms that were never spoken in class but were relevant to the corporate world. The term I heard the most related to corporate goals such as Scope 1, 2, and 3 Emissions. So this is a topic I wish to read and learn more about.
When was this concept created? Why is it relevant to corporations?
Well, Scope Emissions started in 2001 through the Greenhouse Gas Protocol (GHGP), which is an initiative that started in 1998 internationally to develop Greenhouse Gasses (GHG) accounting and reporting standards. The GHGP initiative involves many different stakeholders such as businesses, non-governmental organizations (NGOs), governments, and other governments, and others convened by the World Resources Institute (WRI), a U.S.-based environmental NGO, and the World Business Council for Sustainable Development (WBCSD), a Geneva-based coalition of 170 international companies.
With the rise of climate change problems and movements, corporations are seeing a change in consumer behavior, Deloitte research had shown that since 2020 consumers are becoming increasingly conscious of companies’ environmental policies. Since the pandemic, 40% of the public has become more likely to actively take part in social issues, issues such as climate action. Companies are now trying to adapt to consumer demand from companies to be more active in climate action and reflection. The Deloitte research also showed that 23% of consumers have said they would switch to brands whose beliefs align with their on environmental matters. 42% have actively changed the companies they purchase products from due to their lack of action within their organization for environmental policy changes. And lastly, 21% of consumers would tell others to change the brands they use to those that have the same concerns and beliefs on environmental issues as them.
What are Scope Emissions?
Scope Emissions are distinct categories that outline the types of emissions created internally and externally in relation to the specific business/organization.
Before we delve into Scope Emissions it is important to look into the types of emissions that are created, direct and indirect.
Direct Emissions: GHG emissions that are produced by the business/organization through their operations.
Indirect Emissions: GHG emissions that come from the business/organization, not through them directly but instead caused by external business/organization they rely on.
With the information on direct and indirect emissions, we can now look into the 3 Scope Emissions.
Scope 1 Emissions (Direct Emissions): GHG emissions arise from operations within the business/organization which they are responsible for, this can be machinery to make or move products or waste, vehicle emissions, or emissions from running the building (boiler, furnace, etc.).
Scope 2 Emissions (Indirect Emissions): GHG emissions come from energy production bought from another business/organization. This can be seen through the purchase of electricity, the Scope 2 Emissions come from the business/organization that the electricity was purchased from. A way to mitigate these emissions could be to install a renewable source of electricity, such as solar panels in which there would be no fossil fuel dependency.
Scope 3 Emissions (Indirect Emissions): GHG emissions that are not created by the business/organization themselves but by the consumers that use the products purchased. Scope 3 is seen as an optional category and is often seen as the most difficult emissions to target. Deloitte notes that Scope 3 Emissions can be up to 70% of a business/organization’s carbon footprint.
The World Economic Forum states that “That means measuring Scope 3 Emissions involves tracking activities across the entire business model — or value chain — from suppliers to end users.”
This means businesses/organizations would need to look at both upstream and downstream activities in order to measure the emissions created.
Here is a diagram that illustrates the emissions created through the 3 Scope Emissions.
Dow Jones & Company. (2021, June 23). Consumers Expect Brands to address climate change. The Wall Street Journal. Retrieved from https://deloitte.wsj.com/articles/consumers-expect-brands-to-address-climate-change-01618945334
GHG protocol. (n.d.). Retrieved from https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf
Read, S. (n.d.). What is the difference between Scope 1, 2 and 3 emissions, and what are companies doing to cut all three? World Economic Forum. Retrieved from https://www.weforum.org/agenda/2022/09/scope-emissions-climate-greenhouse-business/#:~:text=The%20Scope%201%2C%202%20and,aim%20of%20the%20Paris%20Agreement.
What are scope 1, 2, and 3 emissions? Net0. (n.d.). Retrieved from https://net0.com/blog/scope-1-2-3-emissions
What are scope 3 emissions?: Ghgi analytics: CO2 emissions reporting. GHG Insight. (2022, November 4). Retrieved from https://www.ghginsight.com/what-are-scope-3-emissions/#:~:text=Examples%20of%20upstream%20Scope%203,life%20treatment%20of%20sold%20products.
