Decoding Scope 1, 2 and 3 Emissions

Dr. Linda Nelms

Welcome to Understanding Scope 1, 2, 3 Emissions. I’m Dr. Linda Nelms, and today, we’re decoding what Scope 1, 2, and 3 emissions really mean—without all the jargon. Let’s kick things off with Scope 1 emissions. These are probably the easiest to visualize because they’re all about what a company directly controls. We’re talking about emissions that come straight from sources the company owns or operates—like their delivery trucks or the furnace in the warehouse. So, whenever a business has vehicles burning fuel, or equipment on-site using natural gas, those emissions are counted as Scope 1. Take a delivery company, for example. All those trucks you see on the road—the emissions from the gasoline or diesel they burn, that’s Scope 1. Or picture a university campus in winter where the heating system is fired by natural gas. The emissions from that burning process? Squarely Scope 1. It’s all about direct operations—what comes out of your own smokestack or tailpipe, not what’s happening at the power plant down the road or in a supplier’s facility. I think about this in my own work—there was always a focus on tracking our own company fleet, and, well, even those little sources add up quickly. Sometimes the lines blur, so if you’re ever unsure—like, “is this Scope 1, or not?”—just ask, “do we own or operate it?” That usually clears it up. Alright, let’s move into the emissions we don’t control directly, but still have a hand in.

Dr. Linda Nelms

Now, Scope 2 emissions are a little trickier. These aren’t about what you burn yourself—these are the indirect emissions that come from the electricity, steam, heating, or cooling your organization buys to keep the lights on or the computers running. Basically, it’s what happens out there when someone else is generating energy for your use. So, let’s say there’s a retail store. If it’s plugged into a grid that’s mostly powered by coal plants, well, every bit of electricity it uses means a higher carbon footprint—Scope 2 goes up. But if that same store sources its power from wind or solar farms, those numbers drop. It’s all about the source of electricity, even if you don’t see the smokestack. Now, here’s where companies start to realize they do hold some influence. I remember working with a state university—this was actually a proud moment for me—where we helped negotiate new renewable energy contracts. By switching their sourcing, we made a significant dent in their Scope 2 emissions. I have to admit, sometimes the difference between Scope 1 and 2 can get confusing, even for folks who look at this stuff daily. But the best way I think about it: Scope 1 is what you burn yourself. Scope 2 is what’s burned on your behalf. Doesn’t matter if you can’t see the power plant—if you’re buying the electricity, the emissions count toward your Scope 2. Now, of course, that’s just the tip of the iceberg. Most companies will notice that their biggest footprint actually isn’t even in these categories.

Dr. Linda Nelms

So, let’s talk about Scope 3 emissions. This category is where it gets really interesting—and, honestly, where it gets really overwhelming for a lot of companies. Scope 3 emissions are all about everything in your value chain that isn’t directly owned or operated by you, but is still connected to your business. Think about your suppliers, the waste your company produces, business travel, how employees get to work, and even what happens when customers use your product. I always picture a major tech company trying to add this all up—those emissions from outsourced manufacturing, or the commutes of thousands of employees. It’s wild just how much can be hidden in the value chain. There’s a great example of tech giants really digging deep—they’re tracking not just flights for employees, but things like the carbon impact of the cloud services they hire from other providers. And believe me, back when I was managing a multi-state supply chain project, collaborating with a long list of vendors across industries, this kind of emissions accounting became a full-time job in itself. I mean, there were times I needed spreadsheets just to keep my spreadsheets straight. But here’s the thing: tackling Scope 3 is essential for getting an honest picture of where a company’s carbon footprint really lies. You can’t manage what you don’t measure, right? That’s the challenge—and the opportunity. I know it’s a complex landscape, and it won’t get solved overnight, but understanding these three buckets—Scope 1, 2, and 3—makes it possible to take smarter, more strategic action. That’s all we have time for today, but we’ll keep going deeper on these topics in our next episodes. Thanks for listening, and keep asking questions about what’s behind the numbers.