Direct, Indirect and Avoided Emissions through Scope 1, 2, 3 and 4  

Direct, Indirect and Avoided Emissions through Scope 1, 2, 3 and 4


Climate change is intricately linked to human emissions of greenhouse gases, and businesses play a crucial role in the global emissions landscape. To clearly understand and categorize emissions from businesses, the concept of ‘scopes’—Scope 1, Scope 2, and Scope 3—was developed by the Greenhouse Gas Protocol, the most widely used international accounting tool for government and business leaders to understand, quantify, and manage GHG emissions. Let’s delve into these scopes and their relevance in the fight against climate change.  

What Is Scope 1, Scope 2, and Scope 3 Emissions? 

Scope 1: Direct Emission

Scope 1 covers all direct emissions from the activities of an organization or under their control. These are usually emissions that occur from sources that are owned or operated by the company, such as fuel combustion in boilers, furnaces, vehicles, or leakages from industrial processes and refrigeration. Addressing Scope 1 emissions often involves a shift to cleaner energies, improving efficiency, and adopting new technologies to reduce overall emission levels. 

Scope 2: Indirect Emissions from Energy Purchases 

Scope 2 addresses indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the company. Although these emissions occur at a facility that is not owned or directly controlled by the organization, they are the result of the organization’s energy use. Companies reduce their Scope 2 emissions by shifting to renewable energy sources, increasing energy efficiency, and engaging in energy contracts that ensure the provision of low-carbon energy. 

Scope 3: All Other Indirect Emissions 

Scope 3 emissions are the most comprehensive, covering indirect emissions that occur in a company’s value chain. These include emissions associated with business travel, procurement, waste and water usage, as well as the use of the company’s products and services by customers. Unlike Scope 1 and 2, Scope 3 inventory is challenging due to the range of activities and the indirect relationship, making tracking and managing these emissions more complex. 

Scope 4: Avoided Emissions  

Scope 4 Emissions or “Avoided emissions,”, are a relatively recent concept in carbon accounting and environmental sustainability coined by World Resource Institute. Scope 4 accounts for emissions avoided when a product replaces other goods or services, serving the same function but with lower carbon intensity. This idea broadens the scope of carbon accounting to take into consideration a company’s positive environmental impact in addition to its direct and indirect emissions. 

Why Differentiate Emissions into Scopes? 

Clarity in Reporting: Differentiating between scopes provides a clearer picture of where emissions originate and can help target reduction efforts. It also makes reporting more transparent and comparably across organizations. 

Targeted Reduction Efforts: Understanding different emission types allows companies to develop specific strategies. For example, if an organization’s Scope 1 emissions are significantly higher than Scope 2 emissions, they may choose to focus on initiatives such as upgrading their fleet or improving energy efficiency in their facilities. 

Strategic Planning: Understanding the different types of emissions enables companies to develop tailored strategies for emission reduction. For example, reducing Scope 3 emissions may involve collaborating with suppliers, implementing supply chain optimization, or encouraging telecommuting among employees. 

Compliance and Accountability: Many regulatory frameworks and reporting standards, such as the Greenhouse Gas Protocol developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), Science Based Target Initiatives (Sbti) require organizations to report emissions across different scopes. Compliance with these standards enhances accountability and helps organizations demonstrate their commitment to sustainability. 

Meticulously examining and addressing each scope, businesses can develop targeted strategies to reduce their carbon footprint, enhance sustainability practices, and contribute to global efforts in combating climate change. Organisations can cultivate a corporate responsibility and environmental stewardship culture by continuously assessing, adjusting, and monitoring emission reduction programmes. This will help pave the way for a more sustainable future for future generations.  

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