Break it down: What are Scope 1 and 2 Emissions?

What are the greenhouse gas emissions scopes?

Greenhouse gas (GHG) emissions are categorized into Scope 1, Scope 2, and Scope 3 emissions to understand a company’s emissions and identify opportunities with the greatest reduction impact. Understanding your GHG emission scopes is vital for planning your sustainability or climate pathway. Recognizing areas with the greatest impact allows you to identify specific actions that will reduce emissions and help you achieve your goal. You can understand the effects of each action through emissions reductions and ROI.

Scope 1 Emissions: Direct GHG emissions from sources controlled or owned by an organization.

Scope 2 Emissions: Indirect GHG emissions from purchased electricity, steam, heat, or cooling.

Scope 3 Emissions: Indirect GHG emissions from assets not owned or controlled by an organization but indirectly affects.  NOTE:  Due to the complexities of Scope 3 we will discuss Scope 3 in greater detail in a separate post.

What are greenhouse gas emissions and why do they matter?

Greenhouse gasses are gasses that trap heat in the atmosphere. Energy from the sun comes through the atmosphere (we can see some of this through light and we can feel it when we stand in the sunlight and it warms our skin) and these gasses keep the heat trapped instead of allowing them to escape back into space. Like an actual greenhouse, sunlight comes in through the glass (or plastic), but the heat stays trapped inside of the greenhouse by the structure of the building itself (walls, ceiling, windows). When too much heat is trapped in our atmosphere, it disrupts the natural cycles that keep Earth habitable to humans and many other sources of life. 

What are Scope 1 emissions?

Scope 1 emissions are direct GHG emissions from an organization’s assets. For example, Scope 1 emissions include on-site fuel combustion such as natural gas used for heating (air or water) or generators. Additional contributors to Scope1 emissions are propane fire pits and barbecues owned by the organization. Scope 1 also includes fuel combustion from gasoline of organization owned vehicles (golf carts, buses, vans, cars, shuttles, etc.).  

What are Scope 2 Emissions

Scope 2 emissions are indirect emissions associated with purchased electricity, steam, heat, or cooling. These are considered indirect because these emissions are produced offsite, such as at a power plant, unlike Scope 1 emissions where the generation of emissions occurs onsite (fuel combustion). Scope 2 emissions are included because they are a result of the organization’s usage, despite being generated offsite. 

How do I track Scope 1 and Scope 2 Emissions?

Emissions can be tracked in Energy Star Portfolio Manager or other management systems that you use and an organized record of purchases is essential for tracking emissions. Management systems specific for tracking emissions will provide emissions factors that convert energy use, combustion, or other Scope 1 sources into carbon emissions. 

The majority of Scope 1 emissions often come from natural gas for heating, in which case a regular statement or invoice from the natural gas provides the amount of natural gas used for the service period. Additional sources must also be included, but will often be a smaller percentage of your Scope 1 emissions. 

Scope 2 emissions are a result of purchased energy, the majority of which come from electricity. Like natural gas, a regular statement contains the amount of electricity used for the service period. However, electricity is generated several different ways and depending on the way your electricity is generated (and when the energy is generated) different amounts of emissions  are associated with them. For example, an electricity provider may source electricity from a coal power plant, solar field, wind, and hydroelectric power. In some instances, you can purchase power generated by a renewable source like wind or solar as opposed to electricity produced by natural gas or coal, which have greater GHG impacts. You will want to understand the mix of your Scope 2 generation at each site and include those components in your calculations for Scope 2 emissions. If you are unable to obtain the exact mix from your provider, the EPA provides eGRID data which takes this into account for you. Energy Star Portfolio Manager or an EPA spreadsheet will provide this information.  

What if I purchase offsets?

If you purchase offsets, this amount will need to be recorded. If you are reporting as part of a voluntary program such as GRESB or an involuntary program such as a Building Performance Standard policy, there will be specific instructions on how to submit this information. If you are tracking this for yourself, you can subtract the amount of offsets you purchased from the area that you would like to associate it with such as travel, energy, or total emissions. 

Why should I care about tracking emissions?

Save on operation costs

Tracking emissions identifies areas of greatest concern and allows you to comprehensively plan your emissions reduction plan for the greatest reduction and ROI. Increasing building operations efficiency can save money for residents and owners alike.  

Avoid fines for non-compliance with new regulation and policy

Policy such as building performance standards (BPS) is being implemented around the country and requires you to report emissions data with fines for not reporting emissions and for non-compliance with emissions limits. Staying ahead of regulation avoids millions of dollars worth of fines. 

Resident attraction and retention

Renters are seeking spaces that align with their values, including environmental impact. An environmentally friendly building can attract new residents and retain them as sustainable living becomes increasingly more important to renters. 

Stakeholders may be impacted

GHG reporting is becoming more prevalent in investor communications and funding requirements. Transparency with building performance and emissions may attract additional stakeholders who are looking for operators who align with their risk appetite related to GHG. 

Tracking emissions, whether mandatory or not, can help identify areas of inefficiency that can reduce operating costs, increase resident and stakeholder attraction, and positively impact insurance rates. Planning for future upgrades and impending regulation takes time and waiting to do so can potentially have negative financial impacts.