Quantifying Your Company’s GHG Emissions

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Businesses looking to reduce their greenhouse gas (GHG) emissions to meet corporate goals or internationally agreed targets may find themselves at a loss as how to measure, manage, and interpret emissions data. To provide a global framework for quantifying and managing GHG emissions for all types of industries, the Greenhouse Gas Protocol has established and defined scope 1, 2 and 3 emissions categories - as part of its Corporate Accounting Reporting Standard.

Why Quantify GHG Emissions?

Categorising emissions into the three scopes creates greater awareness of which types of activities within a business’ value chain are most carbon intensive, as well as which emissions are direct (scope 1) or indirect (scope 2 and 3). It further facilitates measuring emissions reduction progress and helps prevent double counting of emissions.

    Many companies are currently required to quantify and disclose scope 1 and 2 emissions as part of legal reporting requirements, and are now calculating scope 3 emissions in order to publish emissions associated with all business operations.

    Quantifying scope 3 emissions is also a key requirement for aligning with best-practice standards such as the SBTi.

      What Are Scope 1 Emissions?

      Scope 1 includes all direct emissions, that is – emissions generated from sources that are directly owned or controlled by the business; such as gas consumption for heating, corporate vehicles, refrigerants in HVAC systems, and any process emissions associated with industrial processes, e.g., factory fumes.

      What Are Scope 2 Emissions?

      Scope 2 includes all indirect emissions created from the production of a business’ purchased energy – steam, heating, cooling, and electricity consumption.

      What Are Scope 3 Emissions?

      Scope 3 includes all indirect emissions not accounted for in scope 2, that a business is responsible for. These emissions are typically divided into upstream and downstream emissions depending on whether the emissions are produced before or after the internal operations in the value chain.

      Examples of upstream sources of emissions include purchased goods and services, business travel and employee commuting, while downstream sources of emissions include franchises, investments, and end-of-life treatment of sold products.

      How to Quantify GHG Emissions?

      While data for scope 1 and scope 2 emissions are typically readily available for companies (using tools such as NUSdirect for electricity and gas consumption), data for scope 3 emissions involves engaging with a number of divisions within a business, such as finance, facilities management, and human resources. Scope 3 emissions normally make up the largest share of a company’s carbon footprint (often contributing 75%+ of total emissions).

      Scope 3 emissions are also usually more difficult to quantify and reduce, (compared to scope 1 and scope 2 emissions), since the emissions are not produced by the business itself and require long-term engagement with supply chains to collect accurate data, and action new corporate policies to carry out business operations in a more sustainable manner.

      How NUS Can Help

      Businesses committing to a net-zero journey will have to address scope 3 emissions, but creating a detailed and comprehensive carbon footprint can be a difficult task for many organisations to pursue alone. NUS is currently working with numerous businesses worldwide to produce industry-specific decarbonization roadmaps aligned with leading international standards.

      NUS' sustainability division helps businesses to better understand scope 1, 2, and 3 emissions, and provides guidance in collecting all required data and information from within companies to complete company-wide carbon footprints.

      For further insights on carbon footprinting and scope 3 emissions, continue reading here - Carbon Footprints and Scope 3 Emissions.

      More: Energy Market Commentary, Greenhouse Gas (GHG), Net-Zero, Science-Based Targets initiative (SBTi)

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