The types of emissions reporting
In order to take action to reduce emissions, we need to understand and measure where they are sourced from in the first place.
The three scopes in the GHG protocol corporate standard created by the World Resources Institute and the World Business Council for Sustainable Development is a way of categorizing the different kinds of emissions a company creates in its own operations and its wider “value chain” (its suppliers and customers).
It has become the dominant accounting methodology for greenhouse gasses and is the world's most widely
used greenhouse gas accounting standard.
To enable decisions with a positive impact and further support innovation, the concept of avoided
emissions, or sometimes referred to as scope 4, has gained traction.
Scope 1
Direct emissions
Greenhouse gas (GHG) emissions that stem directly from operations owned or controlled by the reporting company. Examples includes factory emissions, production emissions and emissions stemming from company facilities & vehicles.
Scope 2
Indirect emissions from purchased or acquired energy
Indirect emissions from purchased energy – meaning all GHG emissions released in the atmosphere, from the consumption of purchased electricity, steam, heat and cooling. For most organisations, electricity will be the main source of scope 2 emissions.
Scope 3
All other indirect emissions, upstream and downstream
All relevant indirect emissions (not included in scope 2) that occur in a company's value chain, such as emissions from suppliers, customers, and other stakeholders, including both upstream and downstream emissions. Examples include purchased products and services, business travel, employee commuting. Scope 3 emissions often account for over 90% of an organisation’s emissions
"Scope 4"
Avoided emissions
These include greenhouse gas (GHG) emissions avoided as a result of more efficient goods and services. Avoided emissions are defined as the lower negative impact on society when comparing the GHG impact of a solution to an alternative reference scenario where the solution would not be used. This is a comparison with a fictional scenario.
Avoided emissions can provide essential insights for climate-aligned decision-making, innovation and purpose definition. Please note that avoided emissions should always be reported along with but separate from total scope 1, 2 and 3 footprint, and should never be used to adjust or offset the footprint.
