Breaking down Scopes 1, 2 and 3

When accounting for business emissions, understanding all emissions caused both directly and indirectly (across Scopes 1,2 & 3) by the business is essential in achieving a holistic assessment. 
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What are Scopes 1, 2 and 3 of the Greenhouse Gas Protocol

The GHG Protocol enable this by considering emissions from three Scopes:

  • Scope 1 emissions covers direct emissions from company-owned and/or controlled assets, for example operating your forklift that runs on LPG
  • Scope 2 covers indirect emissions from the generation of purchased energy, for example the electricity you buy from a utility provider. For most businesses, electricity purchases make up >95% of Scope 2 emissions.
  • Scope 3 covers all remaining indirect emissions generated in your company's value chain, both upstream and downstream. For example, an online retailer who uses a logistics partner to deliver their packages must account for the emissions of the delivery in their Scope 3 emissions.

The proportion of emissions that is in Scopes 1, 2 and 3 differs significantly depending on the type of business you are. For businesses that purchase and sell a high number of goods and services, the majority of emissions are typically in Scope 3. For example, for many supermarkets in the UK >90% of emissions will fall into Scope 3. Whereas for businesses that have highly emitting processes in their direct manufacturing / production operations, they may see 60+% of the business in Scopes 1 and 2. Example of these businesses may be a glass bottler or textile manufacturer.

For full examples of the types of activities that appear in each Scope, do look at our Glossary.

Why do my targets depend on emissions Scope?

The Science Based Targets standards suggest setting a minimum of two different targets for your business - one for Scopes 1 & 2 and one for Scope 3. The logic here is that businesses have much more operational control over their Scope 1 and 2 emissions, as those emissions are a direct result of their operations and therefore, more ambitious targets can be set and tracked. With Scope 3 emissions, businesses have much less control over decarbonisation - they can largely only use supply chain influence - and the accuracy of measurement is typically lower.

Then why does the SBTi still suggest setting Scope 3 Science Based Targets? Primarily for two reasons:
  • Firstly, for many businesses Scope 3 can be the major source of emissions. Therefore, excluding these emissions from targets would not enable a business to decarbonise fast enough to align to 1.5C of warming. In fact, the SBTi only requires businesses to set Scope 3 targets if Scope 3 makes up >40% of your baseline.
  • Secondly, Scope 3 targets create an incentive for your business to engage your supply chain in decarbonisation. Given the enormity of the challenge supply chains face, this incentive for collaborate can be a great enabler for a sustainable future. In fact, the SBTi do allow you to set an "engagement target", which involves signing up a proportion of your supply chain to Science Based Targets. This functionality will be available in the Altruistiq application soon.

Why do my targets depend on emissions Scope?

We always advise that businesses set Scope 1 and 2 targets first when thinking about a sustainability strategy. As above, this is because your business will have the most control over these emissions sources, and therefore be able to act quicker and be more confident in delivering the targets. However, it should be noted that both types of targets will be needed if your business has >40% emissions from Scope 3.

What next?

With this information hopefully you are primed and ready to continue on your target setting journey. There will be more information like this throughout the application and do let the Altruistiq team know if there is anything we can improve here to help you on your sustainability journey.

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