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LOUIS FRANK 14 November 2023

Understanding Scope 1, 2, and 3 Carbon Emissions

In this article, we delve into the concept of Scope 1, 2, and 3 carbon emissions, explaining their significance and impact. We will also explore the challenges associated with calculating greenhouse gas emissions and provide insights into the Global Greenhouse Gas (GHG) Protocol, a widely accepted framework for emissions accounting. By understanding these concepts, businesses can gain awareness of their environmental impact and develop effective strategies to reduce carbon emissions across their operations.

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Carbon emissions can be categorized into three scopes:

  1. Scope 1: Scope 1 carbon emissions refer to direct greenhouse gas emissions that occur from sources that a company owns or controls. Examples of Scope 1 emissions include CO2 emissions from burning fossil fuels for heating, onsite generators, and company-owned vehicles.
  2. Scope 2: Scope 2 carbon emissions encompass indirect greenhouse gas emissions stemming from purchased electricity, heating, or steam. These emissions result from the consumption of energy from third-party sources, such as utilities. To calculate Scope 2 emissions, organizations often refer to specific grid emission factors determined by the region's power generation mix.
  3. Scope 3: Scope 3 carbon emissions are considered indirect emissions that are attributed to a company's value chain activities, including its suppliers, customers, and other stakeholders. These emissions are often the most challenging to track, as they are influenced by factors outside a company's direct control. Examples of Scope 3 emissions include emissions from the extraction, production, and transportation of purchased goods, as well as business travel and employee commuting.

The GHG Protocol and its complexities

The GHG Protocol is a globally accepted accounting framework for measuring and managing greenhouse gas emissions and has been digitised into the FINGREEN AI platform. There are a number of challenges which arise when assessing this complex framework.

  1. Data Availability: Gathering comprehensive and reliable emissions data can be complex and time-consuming.
  2. Data Interpretation: Differentiating and categorizing emissions between scopes require proper understanding and interpretation of emission sources and activities.
  3. Calculations within the Methodologies: There are a number of complex emission calculations within the framework which need to be carefully navigated
  4. Scope 3 Complexity: Tracking and managing Scope 3 emissions is particularly challenging due to their indirect nature and reliance on external sources.

FINGREEN AI offers a user-friendly tool to help sustainability expert better track data, monitor progress and calculate carbon emissions in line with the GHG Protocol. This tool simplifies data collection, analysis, and reporting.

By leveraging FINGREEN AI's tool, ESG experts can:

  • Effortlessly collect and centralize emissions data from various sources.
  • Customize reports to meet industry requirements and compliance standards.
  • Set emission reduction targets and track progress towards sustainability goals.

Understanding Scope 1, 2, and 3 carbon emissions and the challenges involved in calculating greenhouse gas emissions is key for businesses striving for sustainability. FINGREEN AI's tool provides a comprehensive solution to efficiently manage and optimize carbon emissions, helping organizations align with ESG goals and contribute to a greener future. Embrace this tool and take the first step towards a more sustainable business model.