Decarbonisation Targets Explained

What does carbon neutral mean?

What does Net Zero mean?

Grow your business and be on the right side of history

What does carbon positive mean?

Carbon Mitigation + Offsetting = Smarter Net Zero®

What Are Scope 1, 2 and 3 Emissions

The Greenhouse Gas Protocol was developed through a partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).

The first edition of the Corporate Standard was published in 2001. The Greenhouse Gas Protocol incorporates standards, tools and online training to assist countries and businesses track progress towards their climate goals as part of their commitment to the Paris Climate Agreement. The Greenhouse Gas Protocol groups greenhouse gas emissions into three scopes.

Scope 1 Emissions

These are direct emissions from the direct activities of company-owned and controlled resources and can be grouped into four categories:

Stationary combustion – boilers, combustion plants, engines, incinerators, heaters, etc.

Mobile combustion – automobiles, motorcycles, trucks, off-road vehicles such as forklifts and construction equipment, boats and airplanes.

Fugitive emissions – unmonitored, unintended and/or uncontrolled releases of gas into the atmosphere. Examples are leaking valves, seals and fittings; evaporation losses; and process faults and failures. Coal mining and gas exploration also cause fugitive emissions

Process emissions – industrial production processes which chemically or physically transform materials. Examples include the production of cement, mineral, chemical and metals products; waste treatment, etc

Scope 2 Emissions

These are indirect emissions which are associated with the generation of purchased energy from an external utility provider including electricity, steam, heating, or cooling.

Scope 3 Emissions

The supply chain of any business that supplies services or manufactures goods is comprised of upstream and downstream activities. Some business fully outsource these whilst other opt to integrate some of these activities into their own processes. Business that have direct control of upstream and downstream activities are referred to a “vertically integrated”.

Upstream activities – are all those activities and/or inputs that are required for the production of a service or goods, but excludes the actual production of the service or goods. From an emissions perspective there are 8 defined activities, including:

Business travel – air travel, rail, taxis and ride share, busses, ferries, private vehicles for business travel and other forms of public transport.

Capital goods –used in the manufacturing of products, the provision of services or for the warehousing, sale and delivery of merchandise. Examples include buildings, vehicles, machinery, etc

Employee commuting – through travel to and from work that can be reduced by public transport.

Fuel and energy – activities across a value chain to generate and retail electricity that are not included in scope 1 and 2 emissions. These include (i) coal mining, processing and transport (ii) the power generator (iii) the utility company and (iv) electricity retailers.

Leased assets – operation of leased premises by a lessee not covered in scope 1 and 2 emissions

Purchased goods and services – all the emissions from the production of goods and services purchased by the business. There are (i) production related products like materials and components and (ii) non-production related products like office equipment, ICT equipment, office supplies, etc

Transportation and distribution – transportation by air, rail, road and marine and storage of purchased products in warehouses, distribution centres, and retail facilities.

Waste generated during operations – waste sent to landfills and wastewater treatments.

Downstream activities – are all those activities involved in the production/processing of the finished product or service utilising the materials collected or inputs during the upstream stage. The downstream process also includes distribution, wholesaling and retailing to end users. From an emissions perspective there are 7 defined activities, including:

End of life treatment – how sold products are disposed of by consumers with a focus on recycling products to reduce/limit landfill.

Franchises – emissions from the operation of franchisees under their control not included in scope 1 or scope 2. Franchisees could also include scope 3 emissions associated with scope 1 and 2 emissions from purchased goods from the franchisor’s operations.

Investments – emissions associated with investment by companies with the objective of making a profit and companies that provide financial services that are not included in scope 1 and 2. Examples include commercial banks, multilateral development banks, export credit agencies, etc.

Leased assets – applicable to lessors that receive payments from lessees for leased premises not covered in scope 1 and 2 emissions.

Processing of Sold Products – emissions from the processing of intermediate products by manufacturers subsequent to sale. These are products that require further processing, transformation or inclusion in another product, before use by the end user.

Transportation and distribution – transportation and distribution of sold products in vehicles and facilities not owned or controlled by a business.

Use of sold products – emissions from the use of goods and services sold by a business, representing the scope 1 and 2 emissions of end users.