How to Track Your Organization’s Scope 1, 2, and 3 Emissions

The Securities and Exchange Commission (SEC) has proposed a rule that, if passed, will require all publicly traded companies to disclose their Scope 1 and 2 greenhouse gas emissions. Reporting of Scope 3 emissions, which are harder to calculate, will likely be limited to the largest firms. That said, how can your company track its Scope 1, 2, and 3 emissions in preparation for this legislation? In this article, we’ll discuss the two main ways Scope 1, 2, and 3 emissions can be calculated.

Quick Refresher: What Are Scope 1, 2, and 3 Emissions?

Before we discuss how to track your organization’s Scope 1, 2, and 3 emissions, let’s review what exactly those three scopes encompass:

Scope 1

This scope includes emissions resulting from the direct activities of your company, e.g., fuel used by facilities and vehicles that your company owns or operates.

Scope 2

These are emissions resulting from the generation of procured electricity your company consumes, e.g., electricity and steam.

Scope 3

This includes the emissions from indirect sources in your company’s supply chain, e.g., purchased raw goods, distribution and transportation, employee commuting, use of sold products and end of life treatment.

Method 1: Manual Emissions Tracking

The first way to track emissions is via manual emissions tracking. This involves utilizing the Greenhouse Gas Protocol’s Calculation Tools. The calculations tools are electronic Excel spreadsheets with accompanying step-by-step guidance documents. The spreadsheets help you carry out any necessary emissions calculations. The tools were developed in partnership with industry experts and represent best practice quantification methodologies.

Once you have calculated your emissions, the next step is to track them over time using spreadsheets or a similar methodology. It should be noted that this is process is extremely laborious, has a high potential for error, and is much less exact than using a tool designed to track emissions (like an energy and sustainability management platform).

Method 2: Emissions Tracking with an Energy and Sustainability Management Platform

The second method is to utilize an energy and sustainability management platform. Such a platform can calculate and track your emissions for you, providing you with comprehensive and accurate emissions data. Each sustainability and energy management platform differs slightly in how it tracks emissions. See below to learn about WatchWire’s method.

How WatchWire Tracks Emissions

The WatchWire platform acts essentially as an emissions calculator like that of the Greenhouse Gas Protocol and our carbon accounting/emissions calculation follows the Greenhouse Gas (GHG) Protocol’s Corporate Standard. By default, WatchWire uses EPA E-Grid subregion emissions factors in the U.S. and IEA factors internationally. (For reference, an emissions factor is a representative value that relates the quantity of a pollutant released to the atmosphere with an activity associated with the release of that pollutant, e.g., burning fuel oil. Emissions factors facilitate estimation of emissions from various sources of air pollution.) Tracking of Scope 1 commodities like natural gas, fuel oil, propane, etc. are all based on the EPA’s Inventory for Greenhouse Gasses.

In addition, WatchWire can handle both market-based and location-based emissions factors. A location-based factor represents the emissions your organization is releasing into the air with nothing else (like renewable energy credits or power purchase agreements) to offset those emissions. Market-based factors, however, represent the emissions that result from the choices your organization makes, e.g., deciding to purchase renewable energy credits, participate in power purchase agreements, etc. Market-based factors are always the same number or lower than location-based factors.

WatchWire also tracks your organization’s global warming potential (GWP). The GWP is an index developed to compare the global warming impacts of different gases.

This method not only ensures you are reporting accurate, complete ESG data into your sustainability reporting frameworks, but also keeps you on track to meet company-wide sustainability goals.

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