Scope 1,2 & 3 emissions. What's the difference?

Efforts to decarbonise demand more rigorous disclosure of emissions, particularly, Scope 3 GHG emissions. What are the differences between Scope, 1,2 and 3 GHG emissions? How do these differences impact how each is calculated?

Scope 1 emissions

Those direct GHG emissions which are released through activity at a facility level.

Scope 2 emissions

Those emissions which are released at the power station for the generation of the electricity that a company consumes.

Scope 3 emissions

Indirect GHG emissions which are generated by upstream and downstream activities in the wider economy. They are beyond the operational control of the entity. They exist in the value chain of the entity. Because Scope 3 data lies in the supply chain rather than in the operations of an entity, measuring it becomes more difficult. Both upstream and downstream emissions occur in millions - if not billions - of supply chains.  As a result, reported Scope 3 emissions often rely on certain assumptions and subjective biases - but unlike Scope 1 and 2, they are so far not required to follow rigorous, unified reporting standards. This lack of transparency regarding the reporting approaches renders most Scope 3 data with a high degree of uncertainty.  This uncertainty is compounded by differing methodologies across ESG rating providers making E scores problematic and any material comparison, either financially or environmentally, fraught.

How do I calculate my Scope 1, Scope 2, and Scope 3 GHG emissions?

Fair Supply have developed an Integrated Assessment Engine (IAE) which can calculate your Scope 1, Scope 2, and Scope 3 GHG emissions using expenditure or investment data. At the core of the IAE sits a flexible global supply chain module that complements this client-supplied data to complete a full set of upstream and downstream supply chains. Often, companies only have visibility over their direct suppliers and customers which are referred to as tier 1 suppliers (upstream) and tier 1 customers (downstream).  However, frameworks for reporting supply chain impacts require visibility way beyond tier 1 for both upstream and downstream impacts. The IAE's supply chain module accepts all supplier or customer assessments that our clients may have already undertaken and completes the missing layers of the clients' supply chains to deliver full upstream and downstream visibility of the supply chains. While special focus is placed on the first 10 tiers of the supply chains, the IAE internally assesses our clients’ supply chains way beyond tier 10, and without a system boundary.  How Fair Supply's IAE works  Once this numerical assessment is complete, results are processed to align with the TCFD reporting framework. Fair Supply’s IAE is capable of assessing approximately 40 billion supply chains, represented in more than 1.8 billion monetary transaction values and price-layering information. It draws information from more than 200 economic source datasets for 200 industry sectors in more than 200 countries, and utilises state-of-the-art methods to assess the supply chain impacts.  Ready to calculate your Scope 3 GHG emissions?