Carbon emissions have become a hot topic globally, with more and more companies developing aggressive roadmaps towards zero carbon and net neutrality. In recent times, sustainability has become a business imperative and no longer just a component of traditional CSR initiatives. The Scope 1, 2, and 3 emissions as defined by the GHG Protocol have come up with a comprehensive guideline on this topic, which has become the central piece towards success in achieving zero carbon goals.
The Carbon Majors Database report published by the Carbon Disclosure Project (CDP) highlights that just 100 companies are responsible for a surprisingly high 71% of the global GHG emissions that cause global warming since 1998. This report emphasizes the role that companies and their investors play in tackling climate change.
Measurement and mitigation are essential components for the success of any program, and this is where the Scope 1, 2, and 3 emissions come into the picture. Scopes 1 and 2 are compulsory to report, while Scope 3 emissions are voluntarily reported and often the hardest to monitor. Each of these scopes is further defined below.
Scope 1 Emissions are direct emissions generated from company-owned and controlled resources. They are released into the atmosphere as a direct result of activities at a company level. Scope 1 Emissions are further divided into four categories: stationary combustion, mobile consumption, fugitive emissions, and process emissions. These categories cover emissions from burning conventional fuels, company vehicles, greenhouse gases, and industrial processes and on-site manufacturing.
Scope 2 Emissions are indirect emissions from the generation of purchased energy, typically related to electric consumption, building heating, and cooling, etc. For most organizations, electricity is the only source of Scope 2 emissions. The energy consumed falls into two scopes: Scope 2 covers the electricity consumed by the end-user, while Scope 3 covers the energy used by the utilities during transmission and distribution.
Scope 3 Emissions are all indirect emissions not included in Scope 2. They occur in the value chain of the reporting company, including both upstream and downstream emissions. According to GHG Protocol, Scope 3 emissions are separated into 15 categories. Upstream activities, such as business travel, employee commuting, waste generated in operations, purchased goods and services, transportation and distribution, fuel and energy-related activities, and capital goods, are all part of the Scope 3 emissions. These categories cover emissions from transportation by land, sea, and air, emissions related to third-party warehousing, and emissions relating to the production of fuels and energy purchased and consumed by the reporting company, to name a few.
In conclusion, understanding Scope 1, 2, and 3 emissions is essential for companies to achieve their zero carbon goals. It helps companies to measure, monitor and mitigate their carbon footprint, and in turn, contribute to a better and sustainable future for all. While Scopes 1 and 2 are mandatory, Scope 3 is voluntarily reported and often the hardest to monitor. However, it is crucial to address Scope 3 emissions if we are to achieve our global goals towards a sustainable future.
We will learn more about how we can offset Scope 1 and 2 emissions using IRECs and VPPAs in a future blog post.
If you are interested in learning more about VPPAs and how they can enable your organisation in achieving your net-zero goals, do reach out to us at sales@vibrantenergy.in or at www.vibrantenergy.in