What is the difference between Scopes and Categories of emissions?

By Richard Gordon

Until recently, most organisations have focused their climate change attention on greenhouse gas emissions from their own operations.

But increasingly they understand the need to also account for GHG emissions along their value chains and product portfolios to comprehensively manage their climate-related risks and opportunities.

Value chain refers to the supply chain, operational activities and includes the use of products by consumers and the end-of-life treatment of products after consumer use.

It is becoming more evident that value chain emissions are generally where the greatest risks and opportunities lie.

When reporting on GHG emissions, many organisations use the Greenhouse Gas Protocols and the Scope 1, 2 and 3 framework.

But is the three Scope system broad enough to capture all emissions across the full value chain? And, more importantly, do you need to know this stuff?

Answering the last question first, it is not imperative, but if you are involved in communicating about climate change and carbon, or if you are a senior decisionmaker it is useful to understand the key metrics now being used in the realm of carbon emissions.

First a quick recap on Scopes. The concept of Scope 1, 2 and 3 emissions was developed by the Greenhouse Gas Protocol in order to categorise and delineate direct and indirect greenhouse gas emissions.

Scope 1 are greenhouse gas emissions occurring from sources that are owned or controlled by the company. Scope 2 are GHG emissions from the generation of electricity consumed by the company and Scope 3 emissions are a consequence of the activities of the company but occur from sources not owned or controlled by the company.

There are 15 categories of emissions within Scope 3 such as business travel, use of sold products and services, and waste disposal.

So, you can see that while Scope 1 and 2 are relatively narrow in scope (sorry), Scope 3 includes a wide basket of indirect emissions. Within Scope 3 one category such as emissions from sold products could dominate but not be clearly identified.

Most reporting organisations happily work with the GHG Protocols and the three Scopes. The GHG Protocol’s standards and guidance are easy to access and are free to download.

But there is another framework to consider, one that provides more detailed reporting of categories within Scope 3.

This is the ISO 14064-1:2018 – a bit of a mouthful – but typical of the ISO nomenclature. Since 2021, the ISO standard has been closely based on the GHG Protocol but is shorter, more direct and, unlike the Protocol, it must be purchased.

The key difference between the two is the more granular approach to indirect emissions.

ISO 14064-1:2018 has six categories: 1 and 2 are the same as Scope 1 and 2. Categories 3 to 6 are indirect emissions and more applicable to the value chain and end use of products sold.

The four categories are:

  • Category 3: Indirect GHG emissions from transportation.
  • Category 4: Indirect GHG emissions from products an organisations uses, including employees working from home, waste and leased assets.
  • Category 5: Indirect GHG emissions (use of products sold) including lifetime emissions, end of life emissions and financed or investment emissions.
  • Category 6: Indirect GHG emission from other sources (everything else).

While categories 1 to 4 should be relatively straightforward to measure and report, categories 5 and 6 could prove problematic or require more effort to track and quantify.

Take, for example, a car company that sells 20,000 new vehicles in a year. It takes a bit of work to quantify the lifetime emissions of each vehicle model but once a template has been established reporting lifetime emissions each year should be easier.

At the end of the day, whether you use Scopes or the ISO standards, what is most important is the accuracy and relevance of your data. Reporting of sustainability metrics including carbon should always be founded on materiality – what matters most.

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