Understanding Scope 1, 2, and 3 emissions - walking the walk

by the Spherics Team
by
15
September
2021

‘You can’t manage what you don’t measure’ …is how the adage goes, and although touted rather often, it is the foundation upon which the Carbon Disclosure Project is built.

Measuring your business’ environmental impact is the first step to understanding, mitigating, and collectivising the effort to manage your emissions with both stakeholders and accreditors alike.

Yet, hiking the path to net zero emissions can feel impossible for your business if the weather coming in is making the terrain ahead indistinguishable.

Under your umbrella

The Greenhouse Gas Protocol (the ‘GHG’) supplies the world’s most widely used greenhouse gas accounting principles, with 9 out of 10 Fortune 500 companies reporting their impact to the Carbon Disclosure Project using this methodology.  

Not just for large multinationals, these collectivised standards can provide the protection your business needs by giving you visibility into not only your highest emitting areas but also the risks they are exposing you to.

You may have heard of the different ‘scopes’ which the GHG uses to categorise business emissions:

Scope 1 refers to direct emissions from your owned or controlled resources, e.g. from the fuel burned by your van or the gas used to power your boiler.

Scope 2 refers to indirect emissions from the heating, cooling and steam bought by your company from third party providers.

Scope 3 includes all other indirect emissions that occur within a company’s value chain. This will, most likely, make up the majority of your emissions.

Every breath you take, every move you make

As you start along your hike, the breaths you take, the sweat you drip, the path you erode, these are your Scope 1 emissions. The direct consequences from your own actions, production and supplies.

Along the way, you’ll inevitably need fuel to get you to your destination, so you buy some water, sports drinks and energy bars. These indirect items, the energy you procure for your activity, make up your Scope 2 emissions.

The emitters in Scopes 1 and 2 are primarily within your business’s control, so obtaining the data to measure the scale of these emissions is generally more straightforward. Likewise, the solutions to reduce their impact are usually more within reach too. Your business will know who supplies your energy, how much you use, and where it’s coming from – so making environmentally friendly switches are theoretically more accessible in these areas.

But, there’s more taking you over that hill than the strides you’re making and the sugar in your veins. The sun cream you put on this morning, the map guiding your way, and that Long, Hot Bath you’ll be taking once you make it home – all the other indirect items associated with this trip – they’re for your Scope 3 bucket.

Save the biggest until last

How many other articles do you think could be indirectly related to your walk? Do you count the website you looked up hike recommendations on? The car journey you took to buy new hiking socks? The trips you inspire others to take from your fireside storytelling? The wrapper from your energy bar? Where does it stop? This is the issue most businesses encounter when attempting to review Scope 3 emissions – deciding where ‘upstream’ begins and ‘downstream’ ends is incredibly challenging. (see Figure 1)

This isn’t just a complex beast to tackle; it’s the largest to take down – the majority of corporate emissions come from this last bucket. Scope 3 can cover anything in your business’s value chain or product portfolio – the GHG divides it into no fewer than 15 sub-categories to help define the parameters for which emitting areas to include. (see Figure 1)

Visibility into how your customers dispose of your product, what energy sources your distributers use, how cleanly your supplier disposes of waste, and how your employees commute to work is undoubtedly more opaque.

By taking each of these into account, you’ll get a much more holistic view of your company’s carbon footprint and, so, a better understanding of how to reduce it.

Scope 3 emissions are inherently more complex to control than 1 or 2 – but by honing in on your emitting hotspots and overlaying the level of influence you could have in each category – you could identify some potent next steps in reducing your emissions. And not just that, you’ll discover areas to bolster your bottom line, reduce risk and discover competitive advantages too - a walk in the park.

Understanding Scope 1, 2, and 3 emissions
Figure 1: Understanding Scope 1, 2 & 3 emissions.

Enter Spherics - A solution for understanding scope 1, 2 AND 3 emissions 

At Spherics, we have made it our mission to tackle the complexity of measuring scope 3 emissions head-on. In contrast to most other carbon accounting platforms, Spherics starts with the assumption that all of your emissions are scope 3.

We do this because the reality is, for most companies, scope 3 emissions end up accounting for most of their environmental impact. By taking this stance from the get-go, we’re giving you a more holistic view to your footprint from your very first step with us.

When analysing over 4,000 companies’ emissions inventories, upstream emissions (scope 3) are on average over twice that of a company’s own operational emissions. (CDP Report, 2015)

Our tool does the leg work, identifying scope 1 and 2 emissions from your data and re-tagging them as scope 3 (with a few little prompts from your users here and there!)

Looking at how, and understanding why, your business is spending its money gives us the best view to interpret your scope 3 emissions. It is your accounting data which provides us the key. 

So we’re through the door, but there are other sources of scope 3 emissions that won’t necessarily appear in spending data, one example would be how your employees travel to work. So in these cases we provide an additional layer of customer-led data capture to build a more complete picture of your scope 3 footprint.

We are always working to make Spherics as accurate, complete and specific as we can. Our customers can expect to come with us as we continually adapt to include additional functionality for the last scope 3 categories which are yet to be included. 


Contact

hello@spherics.io

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