One of the biggest challenges businesses face today is reducing their environmental impact and carbon emissions. Companies of all sizes must demonstrate their commitment to a more sustainable future in order to meet the increasing demands of regulators, suppliers, consumers, and stakeholders.

For a company to do its part in mitigating climate change, the first thing to do is to break down its carbon footprint, categorize carbon emissions, create a carbon reduction plan, and understand how to dig for hidden emissions insights. 

Carbon accounting is no longer done through spreadsheets, as the current standards don’t tolerate human error and low-quality assessments when it comes to sustainability. 

In this Coolset Academy post, learn how to get access to 60% more emissions insights on your company’s activities, from scope 1 to 3. Better understand your company’s carbon footprint and embark on a pragmatic, fruitful sustainability journey, with the right tools and knowledge. 

What are scope 1, 2, and 3 emissions, anyway?

Carbon accounting terminology can seem unnecessarily complex for those who are just learning about them. We’ll break down key terms to allow you to better understand your carbon emissions and help you design the right strategy for your company to reach net-zero emissions.

Accessing the 60% hidden emissions insights requires you to learn these basic terms first. Trust us, the effort will pay off. A lot of the most straightforward and impactful solutions are hidden there, just waiting for you to act upon them.

Scope 1 emissions

Scope 1 emissions, often referred to as "direct emissions," are the greenhouse gasses (GHG) released directly from sources that your company owns or controls. 

Picture the smoke escaping from a factory chimney or the fumes from company-owned vehicles – these are classic examples of Scope 1 emissions.

Understanding and measuring Scope 1 emissions is crucial for companies looking to take responsibility for their environmental impact. This category of carbon emissions is usually the easiest to measure as companies often have access to high-quantity and high-quality data. 

Solutions to reduce Scope 1 emissions are also usually straightforward but can be limited by slow technological progress.

To summarize, Scope 1 emissions are the emissions you can control and manage directly within your operations. Addressing these emissions is the first step toward building a sustainable and environmentally conscious business model.

Scope 2 emissions

Scope 2 emissions are more indirect emissions, as you do not completely control the emission sources. Unlike Scope 1, which deals with emissions directly under your control, Scope 2 comes into play when your company imports electricity, heating, or cooling from external sources. 

For instance, the energy powering your office lights, computers, or manufacturing equipment – if it's not generated on-site, the emissions associated with producing that energy fall under Scope 2.

Electricity may not release greenhouse gasses (GHG) on use, but producing electricity inevitably results in carbon emissions. Scope 2 emissions are the environmental cost attached to it. 

Scope 2 emissions will depend on whether the electricity is sourced from carbon-intensive resources, like coal and natural gas, or from low-carbon resources, such as renewables and nuclear. 

Every country (and region) has a different carbon-intensive electricity grid, therefore, it can be challenging to rightfully measure a company’s scope 2 emissions. That is why we recommend using automated carbon accounting software.

Measuring and managing Scope 2 emissions is vital for businesses aiming to reduce their overall carbon footprint. By embracing renewable energy sources or increasing energy efficiency, companies can effectively trim down their Scope 2 emissions, mitigating climate change and reducing their energy bill altogether.

Scope 3 emissions

Scope 3 emissions, often referred to as the "indirect emissions", go beyond the immediate scope of actions of a company, including its entire value chain, from top to bottom. 

Unlike Scopes 1 and 2, which focus on direct and indirect operational emissions, Scope 3 dives deeper into the environmental impact of a company’s activities, from its suppliers to end-users.

Scope 3 includes emissions from purchased goods and services, business travel and employee commuting, and even the end-use of the products or services your company provides.

While Scope 3 emissions are often the most challenging to measure and control due to incomplete sustainability reporting through supply chains and lack of quality data, new carbon accounting software allows companies to better keep track of their Scope 3 emissions.

Embracing the complexities of Scope 3 emissions allows companies to be proactive in addressing their complete carbon footprint. It’s by exploring scope 3 emissions that companies can get more emissions insights, fasten their carbon reduction paths, and reach net-zero emissions.

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What accounts for most carbon emissions?

Globally, a large majority of GHG emissions come from the energy sector, responsible for a whopping 75.6% (37.6 GtCO2e) worldwide. 

The energy sector includes transportation, electricity and heating, buildings, manufacturing and construction, etc. In fact, buildings account for around 7% of global GHG emissions, and transportation accounts for 14%.

While these carbon emissions can generally be attributed to Scope 1 or Scope 2 emissions, studies find that, on average, more than 70% of total businesses’ carbon emissions fall under Scope 3, with the financial and capital goods industries reaching 100%.

This confirms the need for appropriate and accurate measurement of Scope 3 in order to obtain more emissions insights. 

As we discussed in our carbon reduction plan guide, measuring and reporting correctly your company’s carbon footprint is the first and necessary step towards meeting regulation criteria and stakeholders’ expectations. 

Building your first carbon reduction plan

Creating a carbon reduction strategy is an excellent way to begin gaining more emissions insights. As you work through the steps of creating your first carbon reduction plan, you'll learn more about your company's environmental impact and carbon footprint. 

Hidden emissions insights from Scopes 1–3 will come from parts of your business that you hadn't considered putting under the sustainability magnifier yet.

What to look out for

Establish a comprehensive approach that covers the entire spectrum of your emissions sources to lay the groundwork for accurate insights. Consistently keep an eye on the reliability of your data sources, regularity in your measurement techniques, and prioritize clear reporting.

Here are the broad stages we advise taking when creating your first carbon reduction plan:

1. Set your baseline emissions
2. Report on current carbon emissions
3. Spot carbon reduction opportunities
4. Determine the costs and the impact
5. Prioritize and implement your plan

Using carbon reduction software can help you implement these best practices and give you access to powerful analytics, revealing those hidden emission insights. Have you seen our list of the best emissions management software to date?

How to get up to 60% more emissions insights

To maximize your emissions insights, consider the following strategies:

1. Make sure all your emissions data is centralized

By centralizing all essential data in a single, easily accessible location, you can streamline analysis and reporting procedures while enhancing your emissions insights. 

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Centralization increases efficiency, lowers the risk of data silos, and ensures a complete understanding of your carbon impact. This integrated approach not only simplifies compliance with sustainability regulations like the CSRD but also empowers your company to make educated decisions for a greener future. 

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Don't let valuable emissions data pile up—collect it all for a better, more effective picture of your environmental impact and carbon footprint.

2. Track emissions from the bottom up

Track your emissions from the ground up to get a clear picture of your carbon footprint. This bottom-up strategy requires assessing each operational aspect to ensure a thorough assessment of environmental impact.  

Examinating emissions at their source provides nuanced data that can be used to inform suited reduction initiatives. This strategy improves accuracy while also revealing hidden insights for successful sustainability planning. 

Tracking emissions from the ground up enables organizations to make precise and significant improvements in their carbon reduction journey.

3. Enrich emissions data for better accuracy

You can improve the accuracy and richness of your results by complementing raw emissions data with contextual elements such as production numbers, operational variables, or expert knowledge. 

This complete method gives you a more sophisticated view of your carbon impact, allowing you to make more educated decisions. 

Richer data not only meets strict reporting standards but also reveals subtle trends and patterns that are critical for focused emission reduction initiatives and accessing more emissions insights. 

4. Streamline emissions data collection

Streamline the collection of emissions data to improve efficiency and accuracy in environmental reporting. 

Implementing simplified procedures involves using technology and automation to collect data in a seamless manner. You save time and reduce the chance of errors by eliminating human inputs and optimizing the collecting process.  

This streamlined approach ensures that your emissions data is consistently and promptly collected, allowing for faster analysis and reporting cycles. 

Example: How Boom Publishers took the guesswork out of emissions insights

175 years old Royal Boom Publishers decided to use Coolset to fasten their carbon reduction process and better understand their carbon footprint. 

Boom Publishers discovered hidden emission insights thanks to streamlined data collection and powerful analytics and realized that a large share of their emissions come from unanticipated sources. 

Accessing these hidden emissions insights allows Boom Publishers to make informed decisions and implement an effective carbon reduction plan. 

Read more about Boom’s experience working with Coolset.

Try Coolset for 8x faster data collection and 60% more insights

Consider Coolset for a ground-breaking solution to emissions data management. Our cutting-edge platform accelerates data collecting by 8x, assuring efficiency without sacrificing accuracy. 

Coolset can provide up to 60% more emissions insights, allowing your company to make more educated decisions on the route to sustainability.

Mastering emissions insights requires diligent tracking, data enrichment, and efficient operations. Businesses may meet not only regulatory demands but also lead significant change toward a greener, more sustainable future by implementing these practices and leveraging powerful technologies like Coolset automated carbon analytics.