What are greenhouse gas emissions Scope 1, 2, and 3?
Explore what these emissions scopes mean for businesses looking to reduce their carbon footprint
With 317 businesses signing The Climate Pledge (a commitment to achieving net-zero carbon emissions by 2040) to date, many companies including big names like Amazon, Unilever, and Verizon are working to become carbon neutral. 
To achieve carbon neutrality, companies must begin by reducing their carbon footprint which all starts with gaining an accurate picture of where they stand. One of the principal ways that companies’ greenhouse gas emissions are measured and assessed is through three different scopes.
Continue reading to learn more about the three greenhouse gas emissions scopes and why your business should consider reporting all emissions to help cultivate a greener world.
What are Scope 1 emissions?
Mandatory to report, Scope 1 emissions include all direct emissions from stationary combustion from company-owned and controlled resources. Mobile emissions, process emissions, and fugitive emissions are also counted under Scope 1 if the reporting company owns or controls the activities or equipment associated with the emissions.
Examples of Scope 1 emissions include onsite energy use, building refrigerants, and company vehicle fuel consumed by owned and leased vehicles.
What are Scope 2 emissions?
Scope 2 emissions are indirect emissions from the generation of purchased energy. These include all greenhouse gas emissions released into the atmosphere from the consumption of purchased or acquired electricity, steam, heating, and cooling.
What are Scope 3 emissions?
Scope 3 emissions include all indirect emissions that are not included in Scope 2. This includes all emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions. 
Scope 3 emissions are separated into 15 different categories that fall under either upstream or downstream activities.
Upstream activities include:
- Business travel: Business travel includes air travel, rail, underground and light rail, taxis, buses and business mileage using private vehicles, such as employee commuting.
- Waste generated: This refers to waste sent to landfills and wastewater treatments. Waste disposal emits methane (CH4) and nitrous oxide (N2O), which cause greater damage than CO2 emissions.
- Purchased goods and services: These emissions come from the production of goods and services purchased by the company in the same year.
- Transportation and distribution: This includes emissions from transportation by land, sea and air, and emissions that relate to third-party warehousing.
- Fuel and energy-related activities: This category of activities relates to the production of fuels and energy purchased and consumed by the reporting company, in the reporting year that is not included in Scope 1 and 2.
- Capital goods: Capital goods are final products with an extended life and that are used by the company to manufacture a product or provide a service, such as buildings, vehicles, and machinery.
Downstream activities include:
- Investments: This activity is largely intended for financial institutions, but other organizations may report investments as well.
- Franchises: Organizations that operate franchises should report emissions from any franchise under their control.
- Leased assets: This refers to leased assets by the reporting organization as well as assets to other organizations.
- Used of sold products: Used of sold products measures the emissions that result from product usage, which may vary a considerable amount.
- End of life treatment: This activity refers to products sold to consumers, and organizations must assess how their products are disposed of. This is designed to encourage companies to use recyclable packaging.
Why are Scope 3 emissions important?
Emissions along the value chain are often an organization’s largest greenhouse gas impact. Kraft Foods reported that 90% of their total emissions were categorized under the value chain. 
Organizations that want to focus on reducing their carbon footprint and work towards becoming carbon neutral must develop a complete greenhouse gas emissions inventory that include Scope 1, Scope 2, and Scope 3 emissions. This inventory allows companies to fully understand their value chain emissions and identify opportunities to reduce their emissions.
With one of the principal benefits of investing in sustainable forestry being to address the impacts of global warming on the planet, it’s important that forestry investors develop an understanding of greenhouse gas emissions scopes and how they can impact their business.
How INFLOR can help
At INFLOR we believe that the forest sector and its value chain will be the key piece to help the world with current and future climate challenges by providing green products in a sustainable way.
Our forest management solutions along with our experienced team can help you nurture your investment with all the tools and data you need to gain better insights and yield the best results as you help to make a greener world.
We offer the leading forest management solution to:
- TIMOs, REITS and Institutional Investors
- Industry and Energy
- Forest Management
- Conservation and State Government
Ready to partner with INFLOR?