Navigating Scope 1, 2, and 3 Carbon Emissions
- Ava Montini
- Nov 1, 2024
- 8 min read
A Guide for Transparent and Responsible Reporting in Commercial Facilities
In the face of growing climate concerns, businesses across industries are under increasing pressure to account for their environmental impact. One of the most significant measures of this impact is a company's carbon footprint, which encompasses the total greenhouse gas (GHG) emissions produced directly or indirectly by its activities. To tackle this challenge, companies must engage in transparent and comprehensive emissions reporting—a practice that has become essential for regulatory compliance but also for building trust with stakeholders, including customers, investors, and employees.
The Greenhouse Gas Protocol, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), is the leading global standard for measuring and reporting emissions. It introduces a structured approach by categorizing emissions into three scopes: Scope 1, Scope 2, and Scope 3.
Each scope helps companies pinpoint where emissions originate, from direct operations to the broader supply chain, enabling them to develop targeted strategies for emissions reduction. This structured approach is particularly crucial in energy-intensive sectors like commercial facilities and HVAC, where emissions are high and the potential for meaningful reductions is significant.
The Importance of Comprehensive Carbon Emissions Reporting
According to the International Energy Agency (IEA), the built environment, which includes all residential, commercial, and industrial buildings, is responsible for nearly 30% of global energy-related carbon emissions.
Within this sector, commercial facilities play a pivotal role in emissions reduction efforts, as they are among the largest consumers of energy due to heating, ventilation, and air conditioning (HVAC) demands. By publicly reporting their emissions across all three scopes, businesses in this sector contribute to global climate goals and also position themselves for competitive advantage and regulatory readiness.
Transparent emissions reporting goes beyond compliance; it is an opportunity for companies to show leadership in sustainability. The Carbon Disclosure Project (CDP), an international non-profit that promotes transparency in environmental reporting, reports that over 13,000+ companies worldwide now disclose emissions data across their value chains (CDP). This shift toward transparency reflects a growing understanding that managing and reducing emissions is essential to business resilience in a low-carbon economy. For commercial facilities, adopting this practice is not only an ethical choice but also a strategic move to improve efficiency, reduce operational costs, and align with the expectations of eco-conscious clients and investors.
What Are Scope 1, 2, and 3 Emissions?
Companies need to understand the different types of emissions their operations produce to effectively manage and reduce carbon emissions. The Greenhouse Gas Protocol breaks these emissions into three distinct categories, or "scopes," which help businesses identify and take responsibility for their environmental impact across their entire value chain.
Each scope represents a different layer of emissions accountability, from the direct emissions produced by a company’s own operations to the indirect emissions generated throughout its supply chain. This categorization is particularly useful for large organizations, like commercial facilities, where energy use spans multiple levels, from on-site equipment to energy purchased for heating and cooling, and even to the emissions generated by suppliers and end-users. By analyzing emissions through the lens of Scope 1, 2, and 3, companies can more accurately track their carbon footprint, prioritize areas for improvement, and create targeted reduction strategies that align with broader sustainability goals.
This approach also allows businesses to communicate their efforts transparently to stakeholders, showing precisely where emissions occur and the steps being taken to reduce them. As the demand for sustainability intensifies, investors, regulatory bodies, and consumers alike are increasingly expected to expect this level of transparency, as they are looking for companies that demonstrate a proactive approach to managing their environmental impact.
Scope 1
Direct Emissions from Owned or Controlled Sources
Scope 1 emissions cover direct greenhouse gas emissions from sources that a company owns or controls, such as vehicle emissions, fuel combustion in on-site equipment, or leaks from refrigerant systems. For commercial facilities, sources of Scope 1 emissions often include HVAC systems, heating and cooling equipment, and standby power generators. The Department of Energy (DOE) notes that HVAC systems alone account for 35% of energy consumption in commercial buildings, highlighting a significant opportunity for direct emissions reduction.
For a commercial facility, Scope 1 emissions might come from company-owned generators used for backup power during outages.
Mitigation Strategies and Examples
Reducing Scope 1 emissions requires examining on-site equipment and fuel use. Strategies for Scope 1 emissions reductions often include electrification, biofuel adoption, and/or refrigerant management.
Electrification and Energy Source Conversion
Many companies are shifting away from fossil fuels, replacing natural gas or oil with electric heating, solar thermal systems, or biofuels. According to BloombergNEF, electrifying buildings, alongside other key sectors, could reduce global carbon emissions by approximately 20-25% by 2050, as part of the transition to a net-zero future.
Refrigerant Management
Low-GWP (Global Warming Potential) refrigerants can significantly cut emissions from cooling systems. The U.S. Environmental Protection Agency's (EPA) GreenChill Partnership highlights that transitioning to low-global warming potential (GWP) refrigerants can significantly reduce CO₂ emissions. While specific figures per building may vary, the program emphasizes substantial environmental benefits through the adoption of environmentally friendlier refrigeration systems.
Scope 2
Indirect Emissions from Purchased Energy
Scope 2 emissions are associated with the generation of purchased electricity, steam, heating, or cooling consumed by a business. For commercial facilities, these emissions are often tied to energy-intensive systems, such as HVAC, lighting, and IT infrastructure.
A data center’s Scope 2 emissions largely stem from the purchased electricity that powers its servers and cooling systems.
Mitigation Strategies and Examples
Addressing Scope 2 emissions involves both reducing overall energy consumption and transitioning to cleaner energy sources, helping businesses minimize the environmental impact of the electricity, heating, and cooling they purchase. By focusing on these areas, companies can strategically lower their indirect emissions and support a more sustainable energy system.
Energy Efficiency Upgrades
Energy-efficient HVAC systems, such as those with low-pressure drop air filters like Blade Air's Pro Filter, reduce the energy needed for heating and cooling. Implementing high-efficiency HVAC systems can decrease HVAC energy use by an average of 15%.
Renewable Energy Certificates (RECs) and On-Site Renewables
Purchasing RECs allows companies to offset Scope 2 emissions by supporting renewable energy generation. Additionally, on-site solar panels can directly reduce reliance on grid-supplied electricity, minimizing carbon intensity (National Renewable Energy Laboratory).
Scope 3
Indirect Emissions from the Value Chain
Scope 3 emissions are the most complex category, covering indirect emissions both upstream and downstream, including the production of purchased goods, transportation, employee commuting, and even the end use of products. As the World Economic Forum (WEF) notes, Scope 3 emissions typically constitute 70% of a company's total emissions (WEF). For commercial facilities, these can include emissions from manufacturing and transporting building materials, waste disposal, and even tenant activities.
Scope 3 emissions could include the emissions produced when employees commute to work or travel for business meetings.
Mitigation Strategies and Examples
Scope 3 emissions require collaboration across the supply chain and often involve initiatives that encourage sustainable practices among suppliers, employees, and customers.
Supplier Sustainability Programs
Engaging suppliers to reduce upstream emissions can drastically affect Scope 3 emissions. Many organizations, including Blade Air, work with suppliers on sustainability improvements and seek out environmentally responsible partners.
Product Lifecycle and End-of-Life Management
Promoting products that support circular economy principles, such as Blade Air's recyclable filter pads, helps minimize waste and cut down on Scope 3 emissions from disposal.
Common Sources of Scope 1, 2, and 3 Emissions
Understanding the primary sources of carbon emissions within Scope 1, 2, and 3 categories is essential for effective emissions management. Each scope encompasses specific activities, both direct and indirect, that contribute to a business's overall greenhouse gas (GHG) footprint.
Scope 1: Direct Emissions (Our Operations)
Scope 1 emissions are direct emissions that come from sources owned or controlled by a business.
Common sources include:
Fleet Fuel Use: Emissions from company-owned vehicles, such as delivery trucks, service vans, and other fleet vehicles, contribute significantly to Scope 1 emissions.
Stationary Combustion: Natural gas or other fuels are used for power generation and fuel use in boilers, furnaces, and other on-site equipment.
Fugitive Emissions are unintentional leaks from equipment such as air conditioning units or refrigerant systems. They also include leaks of gases like SF₆ (sulphur hexafluoride) used in electric equipment.
LNG Venting and Fuel: For companies in sectors like energy, liquefied natural gas (LNG) venting or use in operations contributes to direct emissions.
Scope 2: Indirect Emissions (Energy Purchased)
Scope 2 emissions stem from the generation of purchased electricity, heat, and steam. Although the energy is produced elsewhere, the end-use emissions are attributed to the company using the energy.
Common sources include:
Electricity Consumption: Energy used for lighting, HVAC systems, IT infrastructure, and other equipment within facilities.
Transmission and Distribution Losses: Emissions associated with the energy lost during the transmission and distribution of electricity to the business.
Liquefied Natural Gas (LNG): In certain cases, LNG used for electricity generation may contribute to Scope 2 emissions when used as a purchased source.
Scope 3: Indirect Emissions (Value Chain Upstream and Downstream)
Scope 3 emissions are indirect emissions from sources not owned or directly controlled by the business, covering both upstream and downstream activities in the value chain. These emissions are often the largest and most complex to manage. Common sources include:
Upstream Emissions
Purchased Goods and Services: Emissions from the production and transportation of goods and services a business buys.
Business Travel and Employee Commuting: Emissions from air travel, hotel stays, and employee commuting contribute to a company’s carbon footprint.
Waste Management: Disposal and treatment of waste generated in business operations can lead to emissions, especially if waste is incinerated or sent to landfills.
Upstream Fuel Emissions: Emissions related to the extraction, production, and transportation of fuels before they are consumed.
Downstream Emissions:
Product Use: Emissions from the use of products sold by the business, such as fuel combustion in customer-owned vehicles or equipment.
End-of-life disposal is the disposal or recycling of products after their use, including any emissions associated with product breakdown or disposal.
Transmission and Distribution of Sold Energy: Losses incurred in energy distribution to end-users also contribute to downstream emissions.
By identifying these common sources within each scope, companies can develop targeted strategies to reduce their GHG emissions, whether by improving energy efficiency in operations, switching to renewable energy sources, or working with suppliers to adopt sustainable practices. Addressing emissions across all scopes is critical to achieving comprehensive carbon management and meeting sustainability goals.
The Intersection of Indoor Air Quality and Energy Consumption
Indoor air quality (IAQ) is essential for the health and productivity of building occupants, but it also significantly impacts a facility's energy consumption and emissions profile. According to the U.S. Department of Energy, heating, ventilation, and air conditioning (HVAC) systems account for approximately 35% of the energy used in commercial buildings. This high energy demand contributes heavily to Scope 2 emissions, underscoring the importance of efficient HVAC management as part of a comprehensive carbon reduction strategy.
A Harvard School of Public Health study found that improved IAQ can enhance cognitive function and productivity by 61%, with energy-efficient ventilation solutions helping companies meet both health and sustainability goals.
Adopting a thorough approach to Scope 1, 2, and 3 emissions reporting is essential for commercial facilities to meet regulatory standards, build stakeholder trust, and drive industry innovation. With HVAC systems as a primary focus for emissions and IAQ, companies have a unique opportunity to reduce energy demand, improve indoor air quality, and support a healthier, more sustainable built environment.
Blade Air is dedicated to helping facilities navigate these goals through energy-efficient, low-impact air filtration solutions. By integrating emissions management with IAQ improvements, businesses can make strides toward a carbon-neutral future while creating healthier, more resilient workplaces—setting a new standard for sustainable, responsible operations.
