Understanding the greenhouse gas emissions categories and definition of scope 1, 2, and 3
Pathzero categorises greenhouse gas (GHG) emissions in alignment with the:
- GHG Protocol Corporate Accounting and Reporting Standard, also referred to as the GHG Protocol Corporate Standard
- GHG Protocol Corporate Value Chain (Scope 3) Standard, also referred to as the Scope 3 Standard.
The GHG Protocol Corporate Standard and Scope 3 Standard are published by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI).
The GHG Protocol Corporate Standard is a widely used standard for measuring and reporting GHG emissions.
It divides emissions into three ‘scopes’:
- Scope 1 emissions are direct emissions that result from activities that are directly owned or controlled by the reporting entity, such as burning fossil fuels on-site or using company-owned vehicles.
- Scope 2 are indirect emissions that result from activities that are not directly controlled by a reporting entity, but that are associated with the reporting entity's use of energy, such as emissions from electricity generation.
- Scope 3 are all other indirect emissions that occur in a reporting entity's value chain, such as emissions from purchased goods and services, employee commuting, and waste disposal.
The GHG Protocol Corporate Standard and the Scope 3 Standard divide the scopes further into the following emissions categories.
Scope 1: Direct emissions
- Stationary combustion
Stationary combustion refers to the process of burning fuels, such as coal or natural gas, to generate heat and energy in a fixed location or stationary equipment, such as power plants, commercial and industrial boilers, or furnaces.
- Mobile combustion
Mobile combustion refers to the burning of fuels, such as gasoline or diesel, in mobile or moving equipment, such as cars, trucks, or airplanes, to generate power and move people or goods from one place to another.
- Process emissions
Process emissions are the greenhouse gas emissions that occur during industrial or manufacturing processes, such as the production of cement, steel, or chemicals.
- Fugitive emissions
Fugitive emissions refer to the intentional and unintended release of gases or vapours from industrial or manufacturing processes, equipment, or products, into the atmosphere.
These emissions can come from leaks, spills, or other unintentional releases from equipment such as valves, pumps, or pipelines. A common example is refrigerant leakage from air conditioners or refrigeration equipment.
Scope 2: Indirect emissions
- Purchased electricity
Purchased electricity refers to the electricity that a reporting entity buys from a utility or other supplier to power their operations, instead of generating it themselves.
The electricity is typically generated by power plants using various sources, such as coal, natural gas, nuclear energy, or renewable sources like solar or wind.
- Purchased heating, cooling, and steam
Purchased heating, cooling, and steam refer to the energy that a company or reporting entity buys from a utility or other supplier to provide heating, cooling, or steam to their buildings or processes, instead of producing it themselves.
This can include hot water, steam, or chilled water that is used for air conditioning, heating, or industrial processes.
Scope 3: Other indirect emissions
- Purchased goods and services
Purchased goods and services refer to the products, materials, and services that a reporting entity buys from other companies to support their operations. This can include everything from office supplies and raw materials to marketing services and IT support.
- Capital goods
Capital goods refer to the physical assets, infrastructure, and equipment that a company invests in to support their operations. This can include everything from buildings and machinery to vehicles and computer systems.
- Fuel-related and energy-related activities
Fuel-related and energy-related activities refer to the processes involved in producing, transporting, and using energy sources like oil, gas, coal, and renewable energy sources.
These are not directly controlled by a reporting entity (i.e., not included in Scope 1) and are not purchased energy by the reporting entity (i.e., not included in Scope 2).
In addition, it also includes losses across the electricity transmission and distribution system.
- Upstream transportation and distribution
Upstream transportation and distribution are related to the services purchased by the organisation.
These typically include upstream transportation and distribution involved in moving raw materials, goods, and products from their source to a reporting entity, but can include downstream logistics services from the organisation to their customers if these services are paid for by the reporting entity.
This can include the transportation of materials and goods by trucks, trains, ships, and pipelines, as well as the storage and distribution of these materials through warehouses and other facilities.
Waste generated in operations refers to the byproducts, residues, and materials that are produced by a reporting entity as a result of their operations. This can include everything from scrap metal and excess packaging to food waste and hazardous materials.
- Business travel
Business travel refers to a reporting entity’s employee travel for work-related purposes.
This can include travel by plane, train, car, or other modes of transportation in vehicles that are not owned or operated by the reporting entity. Business travel can also include accommodation to attend meetings, conferences, or to visit clients or other company locations.
- Employee commuting
Employee commuting refers to the transportation that employees use to travel to and from their workplace in vehicles not owned or operated by the reporting entity. This can include driving alone, carpooling, taking public transportation, biking, or walking.
Employee commuting also refers to working from home – ‘telecommuting’.
- Upstream leased assets
Upstream leased assets are things that a reporting entity rents or leases from another company to use in its operations, and that it does not directly control, such as base building services.
This can also include equipment like trucks, machinery, or storage facilities.
- Transportation and distribution services
Transportation and distribution services are not paid for by a reporting entity, and refers to services related to transportation, distribution, retail, or storage of products sold to end consumers (e.g., warehouses), in vehicles or facilities that are not owned or controlled by the reporting entity.
This can also include emissions from customers that drive to and from retail stores to purchase goods.
- Processing of sold products
Processing of sold products refers to the stages of production that occur after a product is sold by a reporting entity to its customers or end consumers.
This can include things like packaging, assembly, or repair work that may be necessary for the product to function properly or be ready for use.
- Use of sold products
Use of sold products refers to how the products or services sold by a company are ultimately used by the end consumer. This can include things like using a car for transportation or a refrigerator for storing food.
- End-of-life treatment of sold products
End-of-life treatment of sold products refers to the process of disposing or treating products that have reached the end of their useful life. This can include recycling, repurposing, or disposing of products in a way that minimises their environmental impact.
- Downstream leased assets
Downstream leased assets refer to assets owned by an organisation that are leased out to other entities for their use. This can include things like buildings, vehicles, or equipment that are not used by the reporting entity itself but are used downstream by other businesses or consumers.
Franchises refer to a business model where a company (the franchisor) grants the right to use their brand, products, or services to another business (the franchisee) in exchange for fees or royalties.
The operation of franchises in the reporting year refers to the activities and emissions associated with the operation of these franchised businesses, such as their energy use, waste generation, and transportation.
Investments refer to the money that a company has invested in other businesses or projects, such as equity or debt investments or project finance.
The operation of investments in the reporting year refers to the activities and emissions associated with these investments, such as the energy use and emissions of the invested businesses or projects.
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