How are emissions categorised and why do businesses need to know?

We know that to reduce our carbon footprint, we need to reduce our emissions. But how many different types are there to consider?

Emissions can be any gas, light, heat or other substance that’s sent out or given off into the air. Of particular concern are greenhouse gas emissions caused by human activity such as energy consumption, agriculture and transport, which are responsible for the increase in temperature that’s causing our climate to change.

The biggest contributor to greenhouse gas emissions is carbon dioxide (CO2), which is why we primarily focus on reducing our carbon emissions - or footprint - to get to net zero emissions.


Categorising emissions

There are lots of different ways in which a business might create emissions. Not all of these are obvious, but they do all need to be considered when looking at how to reduce your carbon footprint.

In 2001, the Greenhouse Gas Protocol, published a framework that has become the global standard for categorising emissions.

The framework categorised all greenhouse gas emissions into three 'Scopes'. These cover all the direct and indirect emissions a business creates or controls that need to be considered.

Scope 1: Direct emissions

Starting with ‘Scope 1’, these are emissions a business makes and controls directly.

Sources of Scope 1 include:

  • emissions within a company's building, such as from gas boilers, air conditioning units, fridges;
  • emissions created during manufacturing or onsite operational processes;
  • emissions from company owned or leased vans, cars or lorries.

Scope 2: Indirect emissions

Next, are 'Scope 2' emissions. These emissions are created by a business's energy provider when generating electricity that is supplied and used by the business. 

While a business can control how much energy it uses, and which provider it's purchased from, it can't control the emissions caused by the generation of energy, so these are classed as 'indirect'.

Scope 2 emissions are also classed as 'upstream' because they’re needed before the business can fulfil its operations.

Scope 3: Indirect emissions

Scope 3 emissions covers all emissions (outside Scope 2) that are created within the supply chain the business has no direct control over.

As such, they can be harder to measure and reduce, but it's important to do so as Scope 3 emissions will often make up the highest proportion of a business's total emissions.

Activities causing Scope 3 emissions can be both 'upstream', i.e created before a business can deliver its product or service, and 'downstream', i.e created after the business has delivered its product or service.

Some sources of Scope 3 emissions include:

  • business travel (including employee commuting)
  • waste
  • transportation and distribution
  • investments (including pensions)
  • end of life treatment (i.e what happens to your products once they’re no longer fit for purpose).

You can read some FAQs about Scope 3 emissions here, and find out more about sustainable procurement here.

Tackling emissions: Edwards Case Study

Based in Clevedon, Edwards, one of our Action Net Zero partners, is a leading manufacturer in the global semi-conductor industry and supplies its products and solutions all over the world.

By 2030, it will have reduced its Scope 1 and 2 emissions by 46% and Scope 3 emissions by 28%, all of which will help reach net zero by 2050 and support the challenge of keeping global warming to within 1.5°C.

Edwards is tackling their emissions by adopting a 'Remove, Reduce, Reuse, Recycle' approach and this has led to small changes, such as switching to high efficient LEDS when lights need to be replaced, to much larger changes throughout their worldwide operations such as:

  • switching to renewable energy
  • reducing business travel
  • mandating their default shipping mode to be at sea (instead of air)

In analysing every aspect of their operations and supply chain, Edwards have been able to identify opportunities to 'remove, reduce, resuse and recycle' emissions throughout their business. They also recognise the power of 'Sustainability through Collaboration' so are working with suppliers, partners and third parties to collectively tackle their emissions and drive forward industry improvements for the benefit of themselves and their customers. 

Measuring emissions

Since the introduction of legislation in April 2019, it’s now a legal requirement for most large UK companies to report their energy consumption and associated emissions each year to Companies House.

While it’s currently only larger companies that are legally obliged to do so, the government encourages other companies to report this information. But even without the legal requirement, all businesses need to understand and measure their carbon footprint if they hope to reduce it.

There are a few ways to start measuring emissions and an emergence of tools to support this.

Spherics, a carbon accountability tool, uses data from business accountancy systems to assess the carbon footprint in real-time. The easy-to-use dashboard will categorise emissions in terms of Scopes 1-3, supporting the mandatory financial reporting for larger enterprises, and enabling all businesses to develop targeted carbon reduction plans accordingly.

Action Net Zero is proud to be affiliated with Spherics, a carbon accountability tool that integrates with cloud-based accountancy systems such as Xero, Quickbooks and Sage Cloud to provide a real-time snapshot of a business’s carbon footprint.

To sign up for Spherics, click here.