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Scoop Market Mysteries 10-3
🔎 Market Mysteries: How are corporations cutting back carbon?
Market Mysteries of the week
How do corporations plan to cut back their carbon emissions?
Answer:
The first step is analyzing where their business’ emissions are coming from, then they can strategize on how to reduce their carbon footprint.
How do businesses track their carbon emissions?
Businesses analyze their greenhouse gas footprint
using the Greenhouse Gas (GHG) Protocol
, categorizing emissions under three types -
. These scope emissions were developed by the Environmental Protection Agency (EPA) to help businesses monitor their emissions and identify reduction opportunities.
Corporations have significant carbon footprints
, and
. In order for businesses to manage emissions, they need to understand them. Once a corporation understands where the majority of its emissions come from, it can focus its efforts on reduction strategies.
Scope 1 Emissions:
These are the obvious ones, the
direct emissions from activities or equipment controlled and operated by the organization itself.
Scope 1 emissions include things like the exhaust from company vehicles, gases released from air conditioning and refrigeration, and fumes from any manufacturing or industrial processes.
Scope 2 Emissions:
These are the emissions generated
from the energy the company purchases
. In other words, Scope 2 emissions are the result of the organization’s energy use, including electricity, steam, heating, and cooling which are generated externally from the organization. If a company sources its electricity from solar panels instead of a coal power plant, it can reduce its Scope 2 emissions.
Scope 3 Emissions:
These are the toughest ones to identify, track, and reduce. These emissions are
produced by activities and assets that are not directly controlled by the organization
, often referred to as “value chain emissions”. Scope 3 emissions are characterized as either upstream activities or downstream activities. Upstream activities include business travel, employee commuting, purchased goods and services, and supplier transportation and distribution. Downstream activities include investments, franchises, leased assets, use of sold products, and end-of-life treatment of sold products. It’s basically everything else that creates emissions because that company exists.
Which scope is most important to address?
They’re all important, but
addressing Scope 3 emissions may be the most significant for a business to truly reach ‘net zero’.
According to the Greenhouse Gas Protocol,
.
In 2018,
, the equivalent of
. It would take
to remove that much carbon from the air in the same year.
About 99.5% of those emissions fall within Scope 3
. Apple’s Scope 1 & 2 emissions were 126,650 metric tons of CO₂. It would need a forest spanning nearly a quarter of Rhode Island to sequester that carbon.
What are companies doing?
More and more companies are
setting targets for ‘net-zero’ emissions
, taking action to reduce their direct emissions (Scope 1 and Scope 2). But companies will need to focus on assessing their greenhouse gas emissions for all three Scopes in order to reduce their environmental impact and catalyze others to do the same. By tackling Scope 3 emissions, companies can reduce the largest share of their impact and potentially affect the habits and choices of other individuals or companies along the way.
Want to know more about how companies are reducing their scope emissions? Let us know!
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