January 17, 2022

Article

Scope 1, 2 & 3 are the classifications of emissions used in the green house gas protocol and the basis used for mandatory green house gas reporting within the UK.

In summary:

Scope 1 covers direct emissions from owned or controlled resources. These emissions will be used directly on the entities own site or for its transport

Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling. These emissions are used on an entity’s own site but are produced elsewhere.

Scope 3 includes all other indirect emissions that occur up and down an entity’s value chain. These emissions will be indirectly controlled by the entity so are harder to manage.

In more detail:

Scope 1

Scope 1 emissions can be broken down in to 4 categories:

  • Stationery combustion, being fuels and heating sources
  • Mobile combustion, being fuel burned by vehicles owned or controlled by the entity
  • Fugitive emissions, being greenhouse gas leaks from refrigeration and air conditioning units
  • Process emissions, which are released during industrial processes such as the factory fumes.

Scope 2

Scope 2 emissions are generated from purchased utilities and energy providers. For lots of entities scope 2 will purely cover purchased electricity, although also incorporated in this scope are heat, steam and cooling emissions.

Scope 3

Scope 3 is then everything else. The emissions which are as a result of what we do through our liaison with stakeholders and our supply chain which are not purely within our control and are split between upstream and down stream.

Upstream activities can be split between:

  • Business travel and employee commuting
  • Waste generated and sent to landfill or treatment centres
  • Purchase goods and services from suppliers
  • Transportation and distribution (suppliers)

Downstream activities can be split between:

  • Transport and distribution (customers)
  • Investments split between equity, debt, project finance and managed investments
  • Use of the products you sell by the end user
  • End of life for the products you sell, can the goods / packaging be recycled?

Contributing to your success

If you would like to get on top of the emissions generated by your business please get in touch with your usual Albert Goodman contact or Sophie Parkhouse direct.

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