Defining Operational Boundaries: Operational boundaries help companies determine which emissions are owned or controlled by them. This distinction is crucial for identifying responsibility and potential areas for emission reductions. The GHG Protocol categorizes these emissions into three 'scopes'. 'Scopes' is a system that categorizes emissions by their source. This system breaks down emissions into three main categories: Scope 1, Scope 2, and Scope 3.
Scope 1 emissions
Scope 1 emissions originate from sources that a company owns or controls. These are typically referred to as direct emissions. Scope 1 emissions include the following emission sources:
Fugitive and process emissions.
Fugitive emissions are accidental gas leaks that often happen in equipment and such emissions are common in petrochemical and manufacturing sectors.
Process emissions result from specific industrial procedures. A classic example is the release of CO2e during cement production. Businesses in sectors like petrochemicals, manufacturing, and heavy industries often encounter these types of emissions.
Fuels emissions. This category covers the use of fuel in company vehicles, equipment, heating systems, and other operational areas. These emissions are reported under the Heating and fuel emission source.
Scope 2 emissions
Scope 2 emissions arise from purchased electricity, heat, and cold. Since these emissions occur where the electricity is produced and not at your company's location, they are classified as indirect emissions. Scope 2 emissions include the following emission sources:
Heating emissions. This category encompasses energy used for heating purposes. These emissions are reported under the Heating and fuel emission source.
Electricity emissions. These emissions result from all electric equipment like lights, machines, computers, and other tools. All businesses, whether they're small tech startups or big factories, have electricity-related emissions.
Scope 3 emissions
Scope 3 emissions encompass all other indirect emissions not included in Scope 2. Scope 3 emissions originate from assets and operations that the company doesn't own or directly manage, but can still influence indirectly through its business practices. There are 15 categories within Scope 3:
Purchased goods and services: Emissions from the production of goods and services that company purchased.
Capital goods: Emissions from the production of capital goods (assets) purchased by the company.
Fuel- and energy-related activities: Emissions related to the production of fuel and energy consumed by the company that are not included in Scope 1 or Scope 2.
Upstream transportation and distribution: Emissions from the transportation of products to the company.
Waste generated in operations: Emissions from the disposal and treatment of waste generated in the company’s operations.
Business travel: Emissions linked to work-related trips taken by employees.
Employee commuting: Emissions from employees' daily travel from their homes to their workplace and back.
Upstream leased assets: Emissions from the operation of assets leased by the company in its value chain.
Downstream transportation and distribution: Emissions from the transportation and distribution of products after they leave the company, up to the point of final sale.
Processing of sold products: Emissions from the processing of products sold by the company in the downstream value chain.
Use of sold products: Emissions from the final use of the company's sold goods and services.
End-of-life treatment of sold products: Emissions from the disposal of company’s products at the end of their life.
Downstream leased assets: Emissions from the using of assets the company leased out.
Franchises: Emissions from the operation of franchises.
Investments: Emissions from the company's investments.
To understand which scope 3 categories are relevant for your company, check our guide.
💡If you are new to carbon accounting, we recommend starting with Scope 1 and Scope 2 emission sources.