#Knowledge
Climate strategy & accounting
An Overview of the Greenhouse Gas Protocol’s Scopes
Scopes 1, 2, and 3 in detail
Scopes 1, 2, and 3 in detail
The Greenhouse Gas Protocol (GGP) allows companies to accurately and transparently account for their greenhouse gas emissions.
It is an internationally recognized standard first published in 1998, which has been continuously updated to reflect changing requirements and up-to-date scientific findings. The GGP is the go-to for companies trying to calculate their carbon footprints and comply with legal requirements for CO₂ reporting.
It provides a clear system for measuring and comparing greenhouse gas emissions by dividing emissions into three scopes, ensuring that companies can maintain an effective overview of emissions, even through complex supply chain structures and diverse emission sources.
But what exactly do the individual scopes entail? Why are these distinctions important? And how do these scopes help in the implementation of climate targets? That is precisely what we will examine in this blog article.
The Greenhouse Gas Protocol divides a company’s emissions into three categories: Scopes 1, 2, and 3. This structured division helps to distinguish between direct and indirect emissions, making complex relationships easier to understand.
Scope 1 covers all direct emissions generated within the company.
These include, among others:
These emissions arise under the direct control of the company, and are often the easiest to reduce.
These are direct emissions from combustion processes used for heat generation on the company’s site.
Example: Consumption of fossil or biogenic fuels in heating systems or combined heat and power (CHP) plants.
These are direct emissions generated through combustion processes in the company owned vehicles. Relevant data sources for this include fuel cards, and information on distances driven.
Examples:
Scope 1.3 covers direct greenhouse gas emissions caused by leaks.
Some leaked gases, such as chlorofluorocarbons, have a high global warming potential and ozone-depleting properties and have been banned by the Montreal Protocol. But, many of these refrigerants continue to be used and the hoses and seals containing these refrigerants can faulter and cause leaks. Data on the amount of leakage can be collected from invoices containing information on the amount of refrigerant refilled.
Examples:
These are direct emissions from corporate processes involved in the manufacture of products.
Examples:
Scope 2 covers emissions generated by purchased energy, for example for electricity, steam, heat, and cooling. These emissions are generated by the energy supplyers, not by the company itself, making them indirect emissions.
Examples:
Although the company does not directly cause these emissions, it bears responsibility through its choice of energy sources.
Electricity
Indirect emissions from purchased electricity are typically the main contributor to scope 2 emissions, and arise during the generation of the electricity by the supplier. Note that emissions from the upstream supply chain, i.e., from the exploration of fossil fuels or the construction of power plants, do not fall into this category (see Scope 3.3).
Examples:
Steam
These are indirect emissions from purchased steam, i.e., emissions generated during steam production at the supplier’s site.
District heating
This covers indirect emissions resulting from the purchase of local or district heating. These emissions associated with heat generation do not occur directly at the company’s site and therefore differ from combustion emissions under Scope 1.1 Stationary Combustion.
District cooling
These are indirect emissions from purchased energy used for cooling.
Scope 3 covers all other indirect emissions – from raw materials to the end of use. These include:
Determining scope 3 emissions is often a particularly extensive process, both in terms of data collection and the development of reduction measures. And it usually requires close cooperation between different company departments as well as with suppliers and service providers.
These indirect emissions occur in the upstream value chain—by your suppliers. This category includes all emissions resulting from the extraction of raw materials and the manufacture of goods that you purchased in the reporting year. In addition to physical products, this category also includes services. It is important to ensure that these emissions are not already included in other categories of upstream Scope 3 emissions (Scope 3.2–3.8).
Examples:
This category includes all upstream greenhouse gas emissions generated during the production of capital goods procured by your company in the reporting year. Only emissions from the production of capital goods are taken into account, not those generated by their use.
Examples:
This category includes emissions resulting from the extraction and supply of fuels, the construction and operation of power plants, and energy distribution. Provided that they are not already included in Scope 1 and 2.
These can be divided into four subcategories:
This category includes emissions resulting from the transport and distribution of goods purchased and/or produced in the reporting year that were caused by external service providers (e.g., multimodal transport by ship and truck).
Examples:
This scope covers emissions generated during the treatment and disposal of waste and wastewater produced by the company but carried out by external service providers (e.g., waste disposal companies). The company has no direct influence on the emission process but is nevertheless responsible for the emissions.
Examples:
This scope covers emissions generated by company employees through business travel.
It should be noted that these are means of transport that are not owned by the company, such as:
This category includes emissions generated by employees commuting to the company location. They can be caused by various modes of transport, such as cars, buses, trains, or other modes of public transportation.
These are emissions resulting from the use of rented or leased properties, plants, and equipment that have not yet been recorded under Scope 1 or Scope 2.
Examples:
The emissions reported here arise in connection with external transportation and distribution (between the reporting company and the end consumer), which are not paid for by the company being reported on. Scope 1 and Scope 2 emissions from transport companies, distribution service providers, retailers, and (optionally) end customers are recorded.
Examples:
Emissions resulting from the further processing of intermediate products sold by the reporting company fall into this category.
Examples:
This category includes emissions generated by end consumers during use of goods.
Examples:
Scope 3.12 covers emissions arising from the disposal of sold products at the end of their life cycle.
Examples:
This category includes emissions generated by assets owned by the reporting company but leased or rented by other entities. Please note: The emissions listed here should not already be included in Scope 1 or 2.
Examples:
These are emissions generated by the operation of franchise businesses in which the reporting company acts as the franchisor.
Examples: Emissions from fast food restaurants operating as franchises
The final Scope 3 category, Scope 3.15, considers emissions resulting from business activities related to investments. This also includes emissions from energy consumption related to investments.
Examples:
The division of emissions into scopes helps companies to record and calculate their emissions in a structured manner and identify the biggest emission drivers.
While emissions and reduction potential in Scope 1 and Scope 2 lie within the company’s immediate sphere of influence, measures in some Scope 3 require cooperation with suppliers and service providers. Scope 3 therefore reflects the shared responsibility for emissions of participants across the entire value chain.
