Key Topic 2: Organisational Emissions and Reporting

Scopes 1, 2, and 3

GHG emissions are reported in three scopes (IBM, n.d.):

• Scope 1: Direct emissions from sources the organisation owns or controls, such as on-site fuel use, manufacturing processes, or fugitive emissions.
• Scope 2: Indirect emissions from purchased electricity, heat, or steam. Reporting can use location-based or market-based calculations.
• Scope 3: Indirect emissions from the wider value chain, including suppliers, business travel, and product use. Not required to report under GHG Corporate Protocol.

GHG accounting covers seven main gases (CO₂, CH₄, N₂O, HFCs, PFCs, SF₆, NF₃), all converted to CO₂-equivalents. Scope 3 is optional under the Corporate Standard but can be reported using the Scope 3 standard.

Using emission scopes helps organisations identify risks and opportunities, set and track reduction targets, and improve transparency. They also provide a basis for assessing environmental impacts, such as carbon footprint, energy and water use, and waste generation, and for prioritising mitigation strategies (Beyond Team, 2025; Fiveable, 2025)

Inventory Boundaries: Organisational and Operational

Inventory boundaries define which emissions are included in a company’s greenhouse gas (GHG) inventory. They are set at two levels:

• Organisational boundaries: Decide which operations are included in the inventory.
• Operational boundaries: Operational boundaries define which emission sources are included in a company’s GHG inventory and how they are categorised into Scopes 1, 2, and 3, based on whether they are direct or indirect.

Organisational Boundaries

Companies select one consolidation approach for their inventory and must apply it consistently across the organisation. Two main approaches are used:

• Equity share: Emissions are reported according to the company’s percentage ownership of an operation, regardless of control. Common in sectors like oil and gas.
• Control approach: Companies report 100% of emissions from operations they control, either financially or operationally, but cannot mix the two. Operational control is the most common method.

Operational Boundaries:

• Scope 1 (Direct emissions): Emissions from sources owned or controlled by the company, including:
• Stationary combustion: Generating electricity, heat, or steam.
• Process emissions: Chemical or physical processes, e.g., cement or aluminium production.
• Transportation: Fuel used for moving materials, products, waste, or employees.
• Fugitive emissions: Intentional or accidental releases, e.g., methane from coal mines or HFCs from refrigeration.

Scope 2 (Indirect emissions): From purchased electricity, steam, heating, or cooling. These are generated externally but consumed by the company. Reporting can use:

• Location-based method: Grid-average emission factors.
• Market-based method: Reflects consumer choices through energy certificates.

If consumers have a choice of electricity source, both location- and market-based figures are reported; otherwise, only the location-based figure is used.

Scope 3 and Biomass

Scope 3 covers all other indirect emissions in the value chain, such as supplier activities, product use by customers, or transport.

Biogenic CO₂ is carbon dioxide that comes from natural, living sources like plants and trees. Biomass is organic material from these living or recently living sources, such as wood, crops, or plant residues.

So, when biomass is burned or decomposes, it releases biogenic CO₂, which is recorded separately as a memo item, while other gases like methane (CH₄) and nitrous oxide (N₂O) from biomass are counted in the main emissions because they are not fully absorbed when plants regrow.

Including Scope 3 and biomass supports broader environmental assessment and informs targeted mitigation strategies, such as renewable energy adoption, process optimisation, and waste reduction (EU Commission, 2025).

Calculating Emissions

To calculate greenhouse gas (GHG) emissions, first identify sources, which include stationary equipment like boilers and heaters, mobile sources such as vehicles and ships, industrial processes like cement calcination, and fugitive emissions from leaks in pipelines, cooling systems, or refrigeration.

There are three main calculation methods:

• Direct measurement: Using instruments such as continuous emissions monitoring systems (CEMS) to measure GHG concentrations and flow. Highly accurate, but mainly for stationary combustion or industrial processes, and requires verification.
• Stoichiometric calculations: Track the mass of elements entering and leaving a process to estimate emissions. Used for processes like cement calcination. Small measurement errors can affect results, so it is applied over long periods.
• Estimation (most common): Multiply activity data (e.g., fuel use, electricity consumption, distance travelled) by appropriate emission factors. Convert the result into CO₂-equivalents (CO₂eq) using Global Warming Potential (GWP).

Estimation Calculation Method

uActivity data are records of activities that generate emissions, quantity of fuel, material, or energy used, e.g.,:

• Scope 1: Fuel purchase records.
• Scope 2: Metered electricity consumption.
• Scope 3: Varied, e.g., fuel use, passenger miles, or product use.

Emission factors describe how much greenhouse gas (GHG) is released for each unit of business activity. They are published by governments, intergovernmental organisations, they are often country-specific or regional. The unit should match the activity data unit and use the most recently published emission factors, as they are updated periodically.

Calculation:

• Activity data X emission factor = tonnes of emissions (t)
• Tonnes of emissions (t) X GWP = carbon dioxide eq (CO2eq)

Estimation Calculation Method

• Activity data are records of activities that generate emissions, quantity of fuel, material, or energy used, e.g.,:
  • Scope 1: Fuel purchase records.
  • Scope 2: Metered electricity consumption.
  • Scope 3: Varied, e.g., fuel use, passenger miles, or product use.
• Emission factors describe how much greenhouse gas (GHG) is released for each unit of business activity. They are published by governments, intergovernmental organisations, they are often country-specific or regional. The unit should match the activity data unit and use the most recently published emission factors, as they are updated periodically.
• Calculation:
  • Activity data X emission factor = tonnes of emissions (t)
  • Tonnes of emissions (t) X GWP = carbon dioxide eq (CO2eq)

GHG Reporting

• When reporting greenhouse gas (GHG) emissions, companies should acknowledge any limitations, note past errors, and report gross emissions separately from any trades or offsets. Companies can integrate these findings into sustainability reports, environmental audits, and ongoing monitoring of goals
• Required reporting information includes:
  • A description of the company and its inventory boundaries.
  • Emissions for Scopes 1 and 2, reported separately.
  • Emission data for all seven GHGs, reported individually.
  • CO₂ from biomass, reported separately from the scopes.
  • The calculation methods, base year, and emissions trends over time.
  • Context for any recalculations and details of any excluded sources or operations.
  • Optionally, Scope 3 emissions and progress on reduction initiatives or offsets.
• Inventory tips: Maintain a master list of facilities, define a consistent data collection approach, use appropriate processing tools (e.g., Excel or batch loading), and align reporting with business goals.

Regulations and Frameworks: ESG, CSRD, and the EU ETS

• Companies can use environmental assessments to evaluate wider impacts, including Life Cycle Assessment (LCA) for products, the Organisation Environmental Footprint (OEF) for organisational activities, and Environmental Impact Assessments (EIAs) for projects (EU Commission, 2025; Nova Group, 2024).
• Businesses are increasingly judged on ESG (Environmental, Social, and Governance) factors. The environmental aspect aligns closely with GHG reporting, covering carbon emissions, energy efficiency, water use, waste management, and biodiversity protection (Beyond Team, 2025).
• The Corporate Sustainability Reporting Directive (CSRD) requires large EU companies to report on how sustainability issues affect their performance and how their activities impact the environment and society, using European Sustainability Reporting Standards (ESRS).
• The EU Emissions Trading System (EU ETS) sets a “cap and trade” framework, requiring companies in key sectors to monitor, report, and pay for GHG emissions, incentivising reductions and supporting low-carbon investments (EU Commission, 2024).

Interactive Diagram

Selected Option: Problem Tree

Example:

Add extra button below the main tree saying ‘See the Complete Emissions Picture’ – this picture should open or a recreation of it on Genially: https://drive.google.com/file/d/1zEMTfoUPjuEP6Co7CUaJ84d4FKOjY-sa/view?usp=drive_link 

Picture Reference: Diagram adapted from SaveMoneyCutCarbon.com (2025)