Understanding Emissions:
A Guide for Businesses
The climate crisis demands immediate action, and businesses have a unique responsibility to reduce their environmental impact.
A critical step in this journey is understanding where emissions come from, which starts with the widely recognized Scope 1, 2, and 3 emissions framework—and extends to emerging discussions about Scope 4 emissions. In this article, we break down each scope, provide practical examples, and showcase case studies to help businesses identify their emissions sources and take actionable steps toward sustainability.
Scope 1: Direct Emissions
Scope 1 emissions are direct greenhouse gas (GHG) emissions that occur from sources owned or controlled by a company. These include emissions from combustion in owned or controlled boilers, furnaces, vehicles, and industrial processes.
Example:
A manufacturing plant’s on-site combustion of natural gas to power machinery contributes to Scope 1 emissions.
Delivery vehicles owned by a logistics company releasing carbon dioxide while transporting goods.
Case Study: General Motors
General Motors (GM) has taken steps to reduce Scope 1 emissions by transitioning their manufacturing plants to renewable energy sources and improving energy efficiency within their operations. Their commitment includes investing in electrification to replace fossil fuel combustion.
Photo credit: dps.ny.gov
Scope 2: Indirect Emissions from Energy
Scope 2 emissions stem from the generation of purchased electricity, steam, heating, or cooling consumed by the company. While these emissions are created off-site, they are a direct result of a company’s energy use.
Example:
An office building’s electricity consumption from a coal-powered grid.
A retail chain using heating systems fueled by purchased natural gas.
Case Study: Google
Google has achieved 100% renewable energy for its global operations by purchasing renewable energy credits (RECs) to match its electricity consumption. This strategy effectively offsets Scope 2 emissions while driving investments in renewable energy projects.
Scope 3: Value Chain Emissions
Scope 3 emissions encompass all indirect emissions that occur in a company’s value chain, both upstream and downstream. These emissions are often the largest and most challenging to address.
Example:
Upstream: Emissions from raw material extraction, supplier manufacturing, and transportation of goods.
Downstream: Emissions from the use of sold products (e.g., gasoline burned in customer vehicles) and end-of-life treatment of products.
Case Study: Unilever
Unilever’s ambitious commitment to halving the GHG footprint of its products includes a focus on Scope 3 emissions. They work closely with suppliers to source sustainable ingredients and encourage consumers to adopt lower-carbon lifestyles through product innovations and awareness campaigns.
Scope 4: Avoided Emissions
While not formally part of the GHG Protocol, Scope 4 emissions refer to the emissions a company can help avoid through the use of its products or services. These are increasingly relevant in evaluating a company’s net-positive impact on the environment.
Example:
A renewable energy company providing solar panels that replace fossil fuel-based energy systems.
Software tools that enable remote work, reducing transportation emissions.
Case Study: Tesla
Tesla’s electric vehicles (EVs) contribute to avoided emissions by displacing the use of internal combustion engine vehicles. Additionally, Tesla’s energy storage solutions support the transition to renewable energy, reducing reliance on fossil fuels.
How to Identify and Measure Your Emissions
Understanding your company’s emissions requires a structured approach:
Conduct a GHG Inventory: Identify emissions sources across all scopes. Tools like the Greenhouse Gas Protocol and software such as Sphera or SIMAP can assist.
Engage Stakeholders: Collaborate with suppliers, employees, and customers to gather data and drive awareness.
Prioritize High-Impact Areas: Focus on the most significant emissions sources for meaningful reductions.
Set Science-Based Targets: Align reduction goals with the Paris Agreement to ensure your company’s efforts contribute to global climate goals.
Key Benefits:
- Maps out supply chains to the source, ensuring ethical sourcing.
- Monitors the sustainability and social impact of suppliers.
- Offers tools for risk mitigation, helping to reduce supply chain disruptions.
How It Helps Scale Sustainably: As your business grows, ensuring that your supply chain remains transparent and ethical is crucial. Sourcemap helps identify areas of improvement, prevent greenwashing, and ensure that your company’s growth aligns with your sustainability goals.
Choose the Right Tools for Sustainable Scaling
For Scope 1: Transition to electric or low-carbon alternatives for company-owned vehicles and machinery.
Example: Replace diesel delivery trucks with EVs.
For Scope 2: Invest in energy efficiency and renewable energy procurement.
- Example: Install rooftop solar panels and switch to green energy providers.
For Scope 3: Collaborate with value chain partners to reduce upstream and downstream emissions.
- Example: Work with suppliers to adopt sustainable practices and materials.
For Scope 4: Innovate to create products and services that enable emissions reduction for users.
Example: Develop energy-efficient technologies or carbon-negative materials.
The Business Case for Emissions Management
Beyond environmental responsibility, managing emissions can:
Enhance Brand Reputation: Consumers and investors increasingly value sustainability.
Reduce Costs: Energy efficiency and waste reduction often lead to financial savings.
Mitigate Risks: Proactive action minimizes regulatory, market, and climate-related risks.
What's next?
Understanding Scope 1, 2, 3, and 4 emissions provides a roadmap for companies to address their carbon footprint. By taking deliberate steps to measure, reduce, and innovate, businesses can lead the way in the transition to a sustainable future. Rema Labs is here to help your company navigate this journey with tailored strategies for emissions reduction and sustainability leadership. Contact us today to start making a meaningful impact.
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