We get it—most of us aren’t climate scientists or environmental lawyers who understand the nuances of carbon accounting or measuring your greenhouse gas (GHG) emissions. But here’s the thing: understanding your emissions is the foundation for building a solid sustainability strategy.

In this post, we’ll break down the three main categories of emissions—Scopes 1, 2, and 3—in simple terms. By the end, you’ll have a solid grasp of what each scope means and how to start measuring and managing your emissions.

Scope 1: Direct emissions

↪️ In a nutshell: Think of Scope 1 emissions as the ones that come directly from company-owned and controlled resources.

These may include:

  • Fugitive emissions: You guessed it—these are the emissions that escape from leaks, vents, or other unintended releases. They could be leaks from refrigeration and air conditioning equipment, methane emissions from handling coal or natural gas, or leaks of industrial gases.

  • Mobile combustion: Emissions from burning fuels in vehicles your company owns or controls, such as cars, trucks, buses, airplanes, trains, and ships.

  • Process emissions: Emissions released during industrial processes not from burning fuel. For example, CO2 from making cement, emissions from chemical reactions in steel production, and methane released during chemical manufacturing.

  • Stationary combustion: Emissions from burning fuels in things that don’t move, like boilers, furnaces, and incinerators, including fuel like natural gas, coal, oil, and biomass.

If you’re a software or services company, you likely won’t have much to report in Scope 1. But if, for example, you’re a manufacturer or hold sizable real estate, figuring out where these Scope 1 emissions come from is crucial for developing a targeted reduction strategy.

Some ways to reduce Scope 1 emissions include using energy more efficiently, switching to cleaner fuels, and fixing leaky equipment—but a truly impactful approach requires a holistic understanding of your emissions across all scopes.

Scope 2: Indirect emissions from purchased energy

↪️ In a nutshell: Scope 2 emissions are the indirect emissions that come from the electricity, heat, cooling, or steam your company buys.

These emissions occur when the power plant or utility provider generates the energy and can be broken down by the type of energy used:

  • Emissions from generating the electricity your company buys and uses. This is the most common type of Scope 2 emission.

  • Emissions from producing the heat (including hot water) and steam your company buys, like from a district heating system or an industrial process.

  • Emissions from generating the chilled water or other cooling agents your company buys.

To reduce your Scope 2 emissions, you’ll need to work closely with your energy suppliers and providers. Some effective strategies include using energy more efficiently, switching to renewable energy sources, and encouraging your energy providers to adopt cleaner power generation methods.

At Greenplaces, we help our clients identify the most impactful opportunities for reducing Scope 2 emissions based on their unique energy mix and supplier relationships.

Scope 3: Indirect emissions in the value chain

↪️ In a nutshell: Scope 3 is the biggest category and includes all the other indirect emissions that happen in your company’s supply chain. This means emissions that aren’t in Scope 2 but happen both upstream and downstream of your direct operations.

According to the GHG Protocol, Scope 3 has 15 subcategories, not all of which are relevant to every business:

Upstream Scope 3 emissions

These are all the emissions that happen before your direct operations, including:

  • Business travel: Emissions from transportation your employees use for work trips.

  • Capital goods: Emissions from making the big stuff (like buildings, machines, equipment) your company uses.

  • Employee commuting: Emissions from your employees getting to and from work.

  • Fuel and energy-related activities: Emissions from producing the fuels and energy your company buys that aren’t already counted in Scope 2.

  • Leased assets: Emissions from assets or spaces your company leases from others.

  • Purchased goods and services: Emissions from making the stuff your company buys.

  • Transportation and distribution: Emissions from moving products around before they get to you.

  • Waste treatment and disposal: Emissions from getting rid of the waste your company makes.

Downstream Scope 3 emissions

These are all the emissions that happen after your direct operations.

  • Distribution: Emissions from moving your products around after they leave your company.

  • End-of-life treatment of sold products: Emissions from getting rid of your products when they’re done being used.

  • Franchises: Emissions from businesses operating under your company’s franchise agreements.

  • Investments: Emissions tied to the investments your company makes.

  • Processing of sold products: Emissions from your customers processing the stuff you sell them.

  • Use of sold products: Emissions from your customers using the stuff you sell.

Scope 3 emissions can represent up to 90% of a company’s total emissions, which is why an increasing number of organizations, like Microsoft, are requiring their suppliers to disclose and reduce their Scope 3 emissions as part of their procurement process. 

Measuring Scope 3 can be complicated because you have to track down information from several sources in your value chain, but it offers the most comprehensive picture of your company’s carbon footprint and helps you find the best opportunities to reduce it.

Some ways to reduce Scope 3 emissions include getting your suppliers to be more sustainable, designing products with sustainability in mind, making transportation and logistics more efficient, and investing in low-carbon technologies and businesses.

At Greenplaces, we’re here to make sustainability easy and achievable for businesses of all sizes. Our platform gives you the tools and information you need to measure, manage, and talk about your sustainability efforts with confidence. For more detailed guidance and support, consider requesting a demo to kickstart your sustainability journey.

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