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Introduction
In an earlier blog, we introduced the concept of carbon footprints and established what we mean by scopes 1, 2, and 3 emissions. Our discussions with sustainability leaders from across our network reveals that companies often struggle with more practical challenges when measuring their carbon footprint, such as collecting relevant data to measure their emissions. In this blog, we focus on the challenges faced when measuring scopes 1 and 2 emissions. We also have a blog article which specifically tackles the scope 3 calculation challenges, and if you’d like to dive into the detail you can find a comprehensive guide to Scope 3 carbon calculation in our playbook here.
We'll begin by recapping the definitions of Scope 1 and 2 emissions, and looking at their typical constituent emissions sources.
What are Scope 1 and 2 emissions?
Scope 1 Emissions:
Direct greenhouse gas (GHG) emissions that stem from sources owned or controlled by the organisation. Typically, these emissions arise from the use of fuels, non-electric vehicles, and refrigerants.
Scope 2 Emissions:
Indirect greenhouse gas emissions that arise from the generation of purchased electricity, heating, cooling, and steam. Typically, these emissions come from use of electricity and electric vehicles.
What are Scope 1 and 2 emissions?
Scope 1 Emissions:
Direct greenhouse gas (GHG) emissions that stem from sources owned or controlled by the organisation. Typically, these emissions arise from the use of fuels, non-electric vehicles, and refrigerants.
Scope 2 Emissions:
Indirect greenhouse gas emissions that arise from the generation of purchased electricity, heating, cooling, and steam. Typically, these emissions come from use of electricity and electric vehicles.
Scope 1 and 2 challenges
Scopes 1 and 2 are often grouped separately from scope 3 emissions. This is because the relevant data required to monitor these metrics is generally more accessible to companies than the data required for scope 3 emissions. This is one of the reasons why many existing and upcoming Environmental, Social, and Governance (ESG) regulations often require scopes 1 and 2 emissions to be disclosed prior to scope 3.
Outlined below are three of the most common practical challenges we have seen companies encounter when measuring their scopes 1 and 2 emissions. For each one, we have provided a suggested solution.
1. Shared office spaces
Shared workspaces have become more common in the post-COVID working environment. This poses a problem when it comes to office-wide data points. Gas and electricity bills, for instance, contribute to scopes 1 and 2 emissions respectively.
Greenhouse Gas Protocol guidance suggests that these emissions should be broken down to the appropriate subsection applicable to the reporting company. This data should be based on the share of floor space occupied by the company in question. If it is impractical to calculate these emissions by floor space, headcount can be used to divide a company's share of electricity/gas usage.
2. Refrigerant emissions
We're often asked why emissions from air conditioning units fall under scope 1.
Although these units use electricity, for which the associated emissions fall under scope 2, the refrigerants typically found within these systems are more of a concern. This is because refrigerants can have an incredibly high impact on global warming in terms of their total contribution per emission of unit of gas.
In some cases, emitting 1 kg of refrigerant can be the equivalent to emitting over 10,000 kg of carbon dioxide into the atmosphere. It is therefore vital that any release of refrigerants during the installation, usage, repair, or disposal of air conditioning systems is carefully monitored and accounted for. These emissions are therefore separated from electricity usage emissions.
3. The scope of vehicle emissions
There is often confusion as to whether or not vehicle-related emissions fall under scopes 1 and 2, or scope 3.
For example, the use of vehicles for employee commuting falls under scope 3, but the use of vehicles owned or controlled by the company for the transportation of goods falls under scopes 1 or 2, for non-electric vehicles and electric vehicles respectively.
The key difference here surrounds careful consideration of the term ownership. If the vehicle in question is owned or under the control of the reporting company, then its emissions fall under scopes 1 and 2. Otherwise, the resulting emissions fall under scope 3. This can still be tricky to determine, especially if the vehicle is under a leasing agreement. When this is the case, categorisation depends on both the type of lease and the organisational boundaries set by the company. For further information, take a look at this article by the GHG Protocol.
KEY ESG's carbon accounting platform
We will be looking at the common issues faced when measuring scope 3 emissions in a future blog. However, in the meantime, if you have any questions around the issues discussed above, or if you encounter any other practical challenges when measuring your carbon footprint, please do not hesitate to contact us.
Our carbon accounting platform allows companies to enter the raw information they easily have accessible (e.g., electricity bills, vehicle mileage, etc.). This is then converted into emissions outputs, in line with GHG Protocol standards. By better understanding their emissions, businesses can more effectively reduce their impact on climate change.
Frequently Asked Questions about Scope 1 and Scope 2 emissions
1.What are Scope 1 emissions?
Scope 1 emissions are direct greenhouse gas (GHG) emissions from sources owned or controlled by a company. Common examples include fuel combustion, company-owned vehicles, and refrigerant leakage from HVAC systems.
2. What are Scope 2 emissions?
Scope 2 emissions are indirect GHG emissions associated with purchased energy-such as electricity, heating, cooling, or steam. These emissions occur off-site but result from the organisation’s energy consumption.
3. Why are Scope 1 and Scope 2 emissions often measured before Scope 3?
Data for Scope 1 and Scope 2 emissions is typically more available, more standardised, and easier to verify. Many ESG regulations require companies to disclose these emissions before tackling Scope 3, which involves complex supply-chain data.
4. What software can help companies measure Scope 1 and 2 emissions?
Software like KEY ESG’s carbon footprint platform simplify data collection by allowing companies to enter raw operational data (e.g., electricity use, fuel consumption, mileage). The platform automatically converts this data into emissions outputs compliant with GHG Protocol standards.
5. Why is accurate measurement of Scope 1 and 2 emissions important?
Accurate Scope 1 and 2 data helps companies:
- Understand their operational carbon footprint
- Comply with evolving ESG reporting requirements
- Identify opportunities to reduce energy use and emissions
- Establish credible net-zero strategies and targets
6. What are the most common mistakes companies make when measuring Scope 1 and 2 emissions?
Typical errors include:
- Misclassifying refrigerant emissions as Scope 2
- Under-reporting shared office space energy emissions
- Incorrectly categorising leased vehicles
- Forgetting to include backup generators or small fuel sources
7. Where can I get guidance on applying the GHG Protocol correctly?
The GHG Protocol Corporate Standard provides the most widely recognised framework for categorising and calculating emissions. KEY ESG’s platform also incorporates these standards into its calculation methodology to help companies report accurately.
Introduction
In an earlier blog, we introduced the concept of carbon footprints and established what we mean by scopes 1, 2, and 3 emissions. Our discussions with sustainability leaders from across our network reveals that companies often struggle with more practical challenges when measuring their carbon footprint, such as collecting relevant data to measure their emissions. In this blog, we focus on the challenges faced when measuring scopes 1 and 2 emissions. We also have a blog article which specifically tackles the scope 3 calculation challenges, and if you’d like to dive into the detail you can find a comprehensive guide to Scope 3 carbon calculation in our playbook here.
We'll begin by recapping the definitions of Scope 1 and 2 emissions, and looking at their typical constituent emissions sources.
What are Scope 1 and 2 emissions?
Scope 1 Emissions:
Direct greenhouse gas (GHG) emissions that stem from sources owned or controlled by the organisation. Typically, these emissions arise from the use of fuels, non-electric vehicles, and refrigerants.
Scope 2 Emissions:
Indirect greenhouse gas emissions that arise from the generation of purchased electricity, heating, cooling, and steam. Typically, these emissions come from use of electricity and electric vehicles.
What are Scope 1 and 2 emissions?
Scope 1 Emissions:
Direct greenhouse gas (GHG) emissions that stem from sources owned or controlled by the organisation. Typically, these emissions arise from the use of fuels, non-electric vehicles, and refrigerants.
Scope 2 Emissions:
Indirect greenhouse gas emissions that arise from the generation of purchased electricity, heating, cooling, and steam. Typically, these emissions come from use of electricity and electric vehicles.
Scope 1 and 2 challenges
Scopes 1 and 2 are often grouped separately from scope 3 emissions. This is because the relevant data required to monitor these metrics is generally more accessible to companies than the data required for scope 3 emissions. This is one of the reasons why many existing and upcoming Environmental, Social, and Governance (ESG) regulations often require scopes 1 and 2 emissions to be disclosed prior to scope 3.
Outlined below are three of the most common practical challenges we have seen companies encounter when measuring their scopes 1 and 2 emissions. For each one, we have provided a suggested solution.
1. Shared office spaces
Shared workspaces have become more common in the post-COVID working environment. This poses a problem when it comes to office-wide data points. Gas and electricity bills, for instance, contribute to scopes 1 and 2 emissions respectively.
Greenhouse Gas Protocol guidance suggests that these emissions should be broken down to the appropriate subsection applicable to the reporting company. This data should be based on the share of floor space occupied by the company in question. If it is impractical to calculate these emissions by floor space, headcount can be used to divide a company's share of electricity/gas usage.
2. Refrigerant emissions
We're often asked why emissions from air conditioning units fall under scope 1.
Although these units use electricity, for which the associated emissions fall under scope 2, the refrigerants typically found within these systems are more of a concern. This is because refrigerants can have an incredibly high impact on global warming in terms of their total contribution per emission of unit of gas.
In some cases, emitting 1 kg of refrigerant can be the equivalent to emitting over 10,000 kg of carbon dioxide into the atmosphere. It is therefore vital that any release of refrigerants during the installation, usage, repair, or disposal of air conditioning systems is carefully monitored and accounted for. These emissions are therefore separated from electricity usage emissions.
3. The scope of vehicle emissions
There is often confusion as to whether or not vehicle-related emissions fall under scopes 1 and 2, or scope 3.
For example, the use of vehicles for employee commuting falls under scope 3, but the use of vehicles owned or controlled by the company for the transportation of goods falls under scopes 1 or 2, for non-electric vehicles and electric vehicles respectively.
The key difference here surrounds careful consideration of the term ownership. If the vehicle in question is owned or under the control of the reporting company, then its emissions fall under scopes 1 and 2. Otherwise, the resulting emissions fall under scope 3. This can still be tricky to determine, especially if the vehicle is under a leasing agreement. When this is the case, categorisation depends on both the type of lease and the organisational boundaries set by the company. For further information, take a look at this article by the GHG Protocol.
KEY ESG's carbon accounting platform
We will be looking at the common issues faced when measuring scope 3 emissions in a future blog. However, in the meantime, if you have any questions around the issues discussed above, or if you encounter any other practical challenges when measuring your carbon footprint, please do not hesitate to contact us.
Our carbon accounting platform allows companies to enter the raw information they easily have accessible (e.g., electricity bills, vehicle mileage, etc.). This is then converted into emissions outputs, in line with GHG Protocol standards. By better understanding their emissions, businesses can more effectively reduce their impact on climate change.
Frequently Asked Questions about Scope 1 and Scope 2 emissions
1.What are Scope 1 emissions?
Scope 1 emissions are direct greenhouse gas (GHG) emissions from sources owned or controlled by a company. Common examples include fuel combustion, company-owned vehicles, and refrigerant leakage from HVAC systems.
2. What are Scope 2 emissions?
Scope 2 emissions are indirect GHG emissions associated with purchased energy-such as electricity, heating, cooling, or steam. These emissions occur off-site but result from the organisation’s energy consumption.
3. Why are Scope 1 and Scope 2 emissions often measured before Scope 3?
Data for Scope 1 and Scope 2 emissions is typically more available, more standardised, and easier to verify. Many ESG regulations require companies to disclose these emissions before tackling Scope 3, which involves complex supply-chain data.
4. What software can help companies measure Scope 1 and 2 emissions?
Software like KEY ESG’s carbon footprint platform simplify data collection by allowing companies to enter raw operational data (e.g., electricity use, fuel consumption, mileage). The platform automatically converts this data into emissions outputs compliant with GHG Protocol standards.
5. Why is accurate measurement of Scope 1 and 2 emissions important?
Accurate Scope 1 and 2 data helps companies:
- Understand their operational carbon footprint
- Comply with evolving ESG reporting requirements
- Identify opportunities to reduce energy use and emissions
- Establish credible net-zero strategies and targets
6. What are the most common mistakes companies make when measuring Scope 1 and 2 emissions?
Typical errors include:
- Misclassifying refrigerant emissions as Scope 2
- Under-reporting shared office space energy emissions
- Incorrectly categorising leased vehicles
- Forgetting to include backup generators or small fuel sources
7. Where can I get guidance on applying the GHG Protocol correctly?
The GHG Protocol Corporate Standard provides the most widely recognised framework for categorising and calculating emissions. KEY ESG’s platform also incorporates these standards into its calculation methodology to help companies report accurately.
