Module Introduction

History of Scope 1, 2 & 3

The terms "Scope 1, 2, and 3" were first introduced in the early 2000s as part of the Greenhouse Gas Protocol (GHG Protocol). The GHG Protocol was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) to provide a standardized framework for measuring and managing greenhouse gas emissions.

The initial version of the GHG Protocol was released in 2001, and it introduced the concept of categorizing emissions into three scopes to better understand and manage the various sources of emissions associated with an organization's activities. The terms "Scope 1," "Scope 2," and "Scope 3" were coined to define these different categories of emissions. This terminology has been widely adopted across many standards and regulations since then.

Find out more about the different Scopes below:

• Scope 1 emissions

  Scope 1 refers to direct emissions produced from sources that are owned or controlled by an organization. Common examples include:
  1. Combustion of Fossil Fuels: Emissions from burning fossil fuels for heating, such as natural gas in boilers or furnaces, and for operating vehicles and equipment owned by the organization. Note that this does not include any upstream emissions associated with fuel extraction, refining, and transportation.
  2. Industrial Processes: Emissions from processes that release greenhouse gases directly, such as chemical reactions, as a result of the organization's operations.
  3. Waste Management: Emissions from the decomposition of organic waste in landfills, as well as emissions from waste treatment and disposal practices.
  4. On-Site Refrigeration and Air Conditioning: Emissions from refrigerants used in on-site cooling and air conditioning systems, as these chemicals are potent greenhouse gases.
  The definition of what to include is anything that is ‘owned or controlled’ and so can include any source of emissions (or removals) that are owned or controlled, so could be anything from energy consumption, fugitive emissions, industrial processes, product uses, agriculture, land use and land use change, or waste management.

• Scope 2 emissions

  Scope 2 encompasses indirect emissions generated from the consumption of purchased energy, such as electricity, heating, or cooling. These emissions occur offsite but are associated with an organization's operations. These emissions occur offsite but are linked to an organization's activities.

  Here are some key components of Scope 2 emissions:

  1. Purchased Electricity: Emissions generated during the production of the electricity that an organization purchases and consumes. This includes emissions from power plants that produce the electricity used by the organization.
  2. Purchased Heating and Cooling: Emissions from the production of heat and cooling energy that an organization buys and uses for its operations.

• Market vs. Location-based calculators

  There are two methods for calculating Scope 2 emissions: location-based and market-based methods.

  The market-based approach involves accounting for emissions based on the specific energy sources an organization purposefully purchases, considering the emissions factors associated with each source. For example, companies can purchase renewable energy credits (RECs), power purchase agreements (PPAs) or other low-carbon energy from suppliers, and the market-based method seeks to take account for the energy a company has purposefully chosen. While RECs and PPAs typically have zero emission factors, energy companies will often provide an emission factor that represents the energy a company has chosen, which should be used in the Scope 2 calculations.

  On the other hand, the location-based method employs average emissions factors based on the overall energy mix of a geographic area's electricity grid. While simpler to calculate, this approach may not account for an organization's efforts to use cleaner energy and might not fully represent its sustainability initiatives. The choice between these methods hinges on an organization's priorities, as the market-based method offers precision while the location-based method provides a standardized but potentially less tailored view of emissions.

• Scope 3 emissions

  Scope 3 emissions encompass a wide array of indirect greenhouse gas emissions that occur throughout an organization's value chain, beyond its direct operational boundaries. These emissions reflect the entire lifecycle of products and services an organization uses or produces, as well as other activities that indirectly influence its environmental impact.

  Scope 3 emissions are often the most complex and challenging to quantify due to the diverse range of activities involved.

  Broadly, Scope 3 can be separated into upstream and downstream activities. In Manufacture 2030, we estimate emissions from upstream Scope 3 only.

  Typical sources of emissions for manufacturing facilities can include: 

  1. Material extraction and processing (included within ‘purchased goods and services’)

  2. Upstream transportation and distribution of getting materials to a user’s facility

  3. Waste generated in operations which would include any waste treated off-site. Bear in mind that any waste treatment that occurs on-site (e.g., incineration of waste in owned incinerators) would be classed as Scope 1

  4. Energy-related activities outside the manufacturing facility, including the extraction, processing, and transportation of energy sources like coal, oil, and natural gas.

Self-assessment Quiz

Now you have learnt more about Scope 1, 2 & 3 emissions, check your understanding by completing the short quiz below.

Please note that completing the self assessment quiz also keeps your customers informed on your progress if they have asked you to engage with the M2030 PCF Academy. M2030 will never share answers or performance, simply that you have completed the quiz for this module. 

📂Cheat Sheet PDF

You can download a PDF version of this module's content below

• GHG Principles 1 - Scope 1, 2 & 3 Emissions.pdf1000 KB