Carbon footprinting

Scope 1, 2 and 3 greenhouse gas (GHG) emissions

Scope 1 GHG emissions - are released from sources owned or directly controlled by an organisation, from activities like on-site consumption of natural gas, heating oil or fuel consumed by company transport.

Scope 2 GHG emissions - refer to an organisation’s indirect emissions from the consumption of imported electricity. This includes emissions from the consumption of imported electricity to supply lighting, power, cooling etc.

Scope 3 GHG emissions - includes all other greenhouse gas emissions associated with an organisation’s supply chain.

Ways to reduce scope 3 emissions

  • reducing business travel
  • encouraging employees to commute by bike
  • introducing changes that would reduce the quantity of product being disposed of as waste
  • sourcing materials locally to avoid air/road miles

Scope 3 GHG emissions can be categorised as ‘upstream’ or ‘downstream’

Upstream emissions are associated with the purchase and transportation of goods and services to a company including raw materials, transportation of goods to the company, waste management and commuting.
Downstream emissions are linked to sold goods and/or services. Including emissions released from the transportation, use and end of life treatment of sold products, as well as from franchises and investments.

How does this apply to your business?

Every business has scope 1, 2 and 3 emissions. It is important to get an outline understanding of the costs and quantities associated with each of these. Understanding the quantities and costs of greenhouse gas emissions will enable you to identify cost and carbon “hotspots” that can be priorities for reduction.

Estimating your company’s greenhouse gas emissions at a high level isn’t as daunting as it first may appear. Accounting and tracking for GHG emissions follows the same principles as managing your business accounts.