Scope 1 and 2 in the GHG balance: understanding and reducing your direct and indirect energy-related emissions
Faced with the challenges of climate change, measuring and reducing one's carbon footprint is no longer an option for companies: it's a necessity. Whether through their products, services or processes, they need to identify the sources of their emissions in order to take concrete action and reduce their impact on the climate. The GHG balance sheet is a key tool for achieving this, by highlighting an organization's greenhouse gas (GHG) emissions and defining priority actions to limit these impacts, particularly in the context of CSR in France and Europe.
At the heart of this approach are scopes 1 and 2. These categories cover direct emissions from the company's activities (scope 1) and indirect emissions linked to energy consumption (scope 2).
Understanding and acting on these scopes means laying the foundations for a transition to more sustainable practices. It's also an opportunity for companies to strengthen their competitiveness, meet the expectations of their customers and partners, and adapt to increasingly demanding environmental regulations.
1.2 Scope 2: indirect energy emissions
1.3. Key differences between Scope 1 and 2
2. Why are Scopes 1 and 2 crucial for companies?2.1. What data should be taken into account?
2.2. Meeting regulatory requirements
2.3. Taking stakeholders' expectations into account
2.4. Paving the way for Scope 3 action
3. Reduce emissions : Taking action3.1. Acting on direct emissions (Scope 1)
What are scopes 1 and 2 in a GHG balance sheet?
For accurate, efficient calculation and targeted reduction of their greenhouse gas (GHG) emissions, companies rely on reference methodologies such as ISO 14064-1 and BEGES v5. This framework categorizes emissions into three distinct scopes: 1, 2 and 3.
⚡Scope 1: Direct emissions
Scope 1 covers all emissions directly generated by the company's activities. Under the French regulatory method, these emissions break down as follows:
5 sub-categories of direct emissions
- Stationary combustion sources (heating, etc.);
- Mobile combustion sources (emissions from company vehicles);
- Non-energy processes (industrial processes);
- Fugitive (refrigerant gas leak - air conditioning, fridge or cold room);
- Biomass (soils and forests).
🔥Scope 2: indirect energy emissions
Scope 2 emissions refer to indirect greenhouse gas (GHG) emissions associated with the consumption of energy purchased by a company. Although these emissions depend on the energy suppliers and the energy mix they use, they remain a major strategic lever for reducing the company's overall carbon footprint.
These emissions include :
- Indirect emissions from electricity consumption: emissions produced by stationary combustion sources (industrial furnaces, generators, boilers, turbines, etc.).
- Indirect emissions linked to the consumption of steam, heat or refrigeration: emissions linked to the consumption of heat or refrigeration (corresponding to primary energy sources such as gas, oil, wind, solar, etc.).
🆚The key differences between scopes 1 and 2 :
- Control: Scope 1 is directly controlled, while Scope 2 depends on the energy supplier and its geographical location.
- Strategy: Reducing Scope 1 emissions involves improving internal equipment, while Scope 2 requires informed choices on consumption practices, in particular sobriety; the choice of energy contracts, for example green energy contracts.
Why are Scopes 1 and 2 crucial for companies?
📉What data should be taken into account?
The first step in any company's strategy to reduce greenhouse gas (GHG) emissions is to accurately identify its main sources of emissions.
- Calculating scope 1 means quantifying consumption of fossil fuels such as gas, petrol, diesel or heating oil.
- Calculating scope 2 means quantifying electricity consumption (in kWh) or purchases of cooling and heating from networks.
⚖️Répondre to regulations
New European requirements are forcing organizations to rethink their energy model and publish detailed reports on their carbon footprint. The GHG balance sheet enables companies to become more aware of their dependence on fossil fuels, an essential first step in meeting the transparency obligations imposed by current regulations.
Scopes 1 and 2 emissions must be reported in accordance with the various applicable standards, in particular :
- ISO 14064-1,
- the GHG Protocol,
- the French regulatory GHG balance sheet.
🤝Taking stakeholders' expectations into account
Today, consumers, investors and business partners are demanding greater transparency on environmental commitments. By highlighting their efforts to reduce Scopes 1 and 2 emissions, companies :
- Affirm their responsible leadership, positioning themselves as committed, proactive players in the face of the urgency of global warming.
- This is attracting investors who are sensitive to environmental, social and governance (ESG) criteria, making them strategic choices in a world where performance rhymes with sustainability.
🔎According to an ESG survey conducted in 2023 by BNP Paribas: "76% of investors believe that climate change and decarbonization are important enough to influence their investment strategy."
According to a survey conducted by IFOP in France in 2021: "more than 8 out of 10 French people believe that it is important for major French companies and multinationals to make a commitment".
🚀Preparing the ground for action on scope 3
Scope 3, encompassing emissions linked to the entire value chain (suppliers, transport, product use, etc.), often represents the largest part of an organization's carbon footprint. However, tackling this challenge without first mastering scopes 1 and 2 would be counter-productive.
Rigorous management of scopes 1 and 2 is not just a strategic prerequisite: it provides a solid method for tackling the complex challenges of scope 3. It also makes it possible to structure good internal practices and instill a global drive to reduce greenhouse gas emissions.
🔎A company that reduces its energy consumption (scope 2) inspires its partners to follow suit, triggering a domino effect that reduces scope 3 emissions.
How can we reduce Scopes 1 and 2 emissions?
To reduce their carbon footprint and meet growing environmental demands, companies need to take concrete, strategic action. Reducing Scopes 1 and 2 emissions requires precise measures, backed up by effective tools.
💡Action on direct emissions (Scope 1)
Direct emissions, from sources owned or controlled by the company (for example, emissions linked to fossil fuels consumed on site or vehicle fleet fuels), can be significantly reduced through several levers:
Transition to sustainable means of transport
-
- Adopt electric vehicles for company fleets.
- Install recharging infrastructures on sites to facilitate this transition.
- Encourage eco-driving through employee training programs.
🔎N.B: According to the French Ministry of Ecological Transition, over its entire life cycle, an electric vehicle emits up to 2 to 6 times less CO2 than a combustion-powered vehicle.
Industrial process optimization
-
- Identify and reduce fugitive emissions from processes using advanced detection technologies (e.g. sensors, drones).
- Update equipment to improve performance and reduce GHG emissions.
Energy efficiency for buildings and infrastructure
-
- Reinforce thermal insulation to limit heating and cooling needs in hot weather.
- Proactive maintenance of equipment to avoid energy waste.
🔌Optimize energy consumption (Scope 2)
Scope 2 emissions mainly concern the consumption of energy purchased to power the company's activities (electricity, heating and cooling networks). Key measures include :
- Transition to renewable energies
- Opt for 100% green energy supply contracts (solar, wind, hydro).
- Invest in clean infrastructures such as on-site photovoltaic panels.
- Reduced electricity consumption
- Install LED lighting and energy-efficient equipment.
- Raise employee awareness of eco-gestures (e.g. switching off unused appliances, reducing elevator use).
📊Implementation of monitoring and reporting tools
Measuring and monitoring emissions is essential to effectively manage a reduction strategy. Companies must :
- Quantify their GHG emissions and implement actions to reduce them
- By adopting digital tools capable of collecting, analyzing and visualizing emission data.
- Perform regular calculations and adjust strategies
- Establish a reporting schedule to assess progress.
- Carry out energy audits to identify sources of waste and adjust action plans.
- Set ambitious but achievable targets, based on recognized standards such as the SBTi (Science-Based Targets initiative).
Controlling Scopes 1 and 2 emissions is an essential step in sustainably reducing the carbon footprint of our structures and laying the foundations for an ambitious decarbonization strategy. These actions are not limited to an environmental imperative: they also enable us to meet regulatory requirements, reduce operating costs and strengthen our brand image in the eyes of our stakeholders.
To meet this challenge successfully, specialized support is essential. GCI offers comprehensive expertise, from precise calculation of emissions to detailed analysis and definition of targets aligned with SBTi trajectories. Its innovative platform enables organizations to visualize their progress and optimize their reduction efforts.
Investing in proactive emissions management is a strategic and responsible decision. Make GCI your partner in achieving your climate objectives and positioning your organization as a leader in the energy transition.
