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Scope 1: Direct Emissions
Scope 1 emissions are direct emissions from sources directly owned or controlled by the company/organisation. These include emissions from combustion in boilers, furnaces, and vehicles, as well as emissions from chemical production in owned or controlled process equipment.
Scope 2: Indirect Emissions from Purchased Energy
Scope 2 covers indirect emissions from the generation of electricity, steam, heating, and cooling that is purchased and consumed by the reporting company. Despite not being emitted directly by the company, these emissions result from the company's energy use and operation.
Scope 3: Indirect Value Chain Emissions
Scope 3 emissions include all indirect emissions not included in Scope 1 or 2 that occur within the value chain of the reporting company, including both upstream and downstream emissions. These are the result of activities from assets not owned or controlled by the company, but are related to the company's operations. For example, supply chains and distribution channels will be included in Scope 3 emissions.
How Scope 1, 2, and 3 Emissions Work Together
Understanding and managing Scope 1, 2, and 3 emissions is crucial for comprehensive climate action. Scope 1 and 2 emissions are often more straightforward to calculate and manage, while Scope 3 emissions tend to be more complex due to their extensive value chain involvement.
Challenges with Reporting on Scope 3 Emissions
Scope 3 emissions typically make up the largest portion of a company’s emissions and are the most complex to work out. Even a large portion of companies in the DAX-40 face challenges with reporting on their Scope 3 emissions, meaning that those who manage to do this successfully can set themselves up to be true sustainability leaders in their respective industries.