When you set out to reduce your business carbon footprint, it seems logical to begin with Scope 1 emissions – those that you can control directly.
However, some companies quickly find that they don’t actually emit much Scope 1 carbon, especially if they operate in an office-based services sector.
Scope 2 emissions are quite a different matter; but what are they exactly and how can you begin to reduce them?
What Are Scope 2 Emissions?
Scope 2 emissions come from the energy that you buy. For most organizations this means electricity, but it can also include purchased steam, heating or cooling.
It is calculated that around 40% of total global greenhouse gas emissions come from energy generation, and half of that energy is supplied to commercial and industrial customers, so businesses have a vital role to play in cutting carbon emissions worldwide.
Scope 2 emissions are also referred to as indirect emissions, as they are commonly considered to be only indirectly under your control; however, there are still opportunities to reduce them.
The first step is to calculate your existing Scope 2 emissions. Since energy purchases are normally metered and/or billed regularly, it should be relatively simple to collect data from your suppliers to find your total energy use.
To calculate your Scope 2 carbon emissions, you’ll need to apply a conversion factor that reflects the fuel mix used to generate the electricity (or other energy) supplied. Your utility company should be able to provide this.
The application of accurate conversion factors is important since the fuel mix varies between countries, states, suppliers and even the time of year. In some locations, the energy grid is largely supplied by carbon-intensive fossil fuel power stations, which means the electricity supplied emits high levels of greenhouse gases.
In other areas, where a greater proportion of the energy is generated by renewable technologies, the same quantity of electricity emits far less carbon so the conversion factor is lower.
Best practice guidance now requires businesses to report in two different ways: The location-based method, based on the local power grid; and the market-based method, based on contracts with electric utilities or other energy or energy attribute suppliers.
How Can Businesses Cut Scope 2 Emissions?
The quickest way to cut your Scope 2 emissions is to switch to a low-carbon energy supplier. Even without changing your business practices or improving energy efficiency, you can lower your emissions by changing your purchasing decisions.
The best choice of energy supplier is one that invests in building new renewable power infrastructure. By choosing this type of supplier, you can help build demand for an additional renewable generation as well as reducing your own emissions.
Improving the energy efficiency of your property portfolio and business operations can reduce your Scope 2 emissions significantly. Manufacturing and production facilities should be optimized and maintained to ensure peak efficiency at all times.
In office locations, all electric systems such as heating, air conditioning, lighting and IT should be evaluated and upgraded or replaced where necessary. Timers, occupancy sensors, and staff training can all help to ensure unused equipment is switched off so energy is not wasted.
Installing on-site renewables, such as solar panels, can also be a good choice in the right locations.
Finally, any remaining Scope 2 emissions can be offset.
How Does Cutting Scope 2 Emissions Fit into a Business Strategy?
Improving the overall energy efficiency of your organization is a great way to save money, whether you run an office-based business, an online service or any other commercial enterprise.
Electricity is an unavoidable business expense, but using less can make your products and services more competitive and improve your bottom line.
Furthermore, reducing your business carbon footprint reduces your liability for current or future carbon taxes, improves your long-term sustainability and protects you against volatile prices in the utility market.
Demonstrating a high level of energy efficiency and purchasing renewable energy are also great ways to show your commitment to sustainability and helping to avoid the effects of global climate change, and can be a valuable brand asset.
How Does Carbon Offsetting Help Reduce Scope 2 Emissions?
Even the most energy efficient businesses struggle to eliminate all Scope 2 emissions, as everyone needs to use electricity.
Carbon offsetting allows you to neutralize your Scope 2 emissions by supporting projects that avoid or reduce carbon emissions elsewhere.
By choosing progressive offsets, such as Native Energy’s Help BuildTM projects, your business can also help improve the lives of local communities by delivering social, environmental and economic benefits.