Navigating GHG Protocol Scope 1 for SMEs

published on 16 December 2023

Implementing sustainability initiatives can seem daunting for small and medium-sized enterprises (SMEs). Many agree that quantifying greenhouse gas (GHG) emissions is an essential first step.

By following the globally recognized GHG Protocol Corporate Standard, SMEs can accurately measure Scope 1 emissions from their direct operations. Doing so unlocks access to emissions reduction opportunities, enabling meaningful climate action.

In this guide, we will demystify GHG Protocol Scope 1 specifically for SMEs. You will learn pragmatic methods to calculate your Scope 1 footprint, identify hotspots, and implement tangible emissions reduction strategies. Equipped with this knowledge, your SME can confidently integrate Scope 1 emissions management into your sustainability plans.

Introduction to GHG Protocol Scope 1 for SMEs

The Greenhouse Gas (GHG) Protocol provides the global standardized framework for measuring and reporting greenhouse gas (GHG) emissions from private and public sector operations, value chains, products, cities, and policies.

The GHG Protocol Corporate Standard categorizes emissions into three scopes:

  • Scope 1 covers direct emissions from owned or controlled sources like company vehicles, on-site fuel combustion, fugitive refrigerants, and industrial processes.
  • Scope 2 accounts for indirect GHG emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the company.
  • Scope 3 includes all other indirect emissions from activities like procurement, waste, transportation, investments, leased assets, franchises, etc.

For small and medium-sized enterprises (SMEs), Scope 1 emissions typically make up a significant portion of their overall carbon footprint. Properly measuring and reporting Scope 1 emissions is crucial for SMEs on their net zero journey.

Exploring the GHG Protocol Corporate Standard

The GHG Protocol Corporate Standard provides requirements and guidance for companies to prepare a global corporate-level GHG emissions inventory. Some key aspects include:

  • Covers the accounting and reporting of the seven GHGs covered by the Kyoto Protocol
  • Defines business goals and inventory design principles
  • Provides specific calculation methodologies and instructions
  • Outlines best practices for emissions tracking and verification

By following this consistent Corporate Standard, SMEs can produce accurate, complete, consistent, relevant and transparent emissions inventories for effective carbon management and stakeholder disclosure.

The Importance of Measuring Scope 1 Emissions

There are several key reasons why properly tracking Scope 1 emissions matters for SMEs:

  • Helps identify the largest sources of emissions and reduction opportunities
  • Enables setting science-based targets and net zero strategies
  • Allows monitoring performance trends year-over-year
  • Provides data for sustainability reporting and ESG disclosures
  • Ensures compliance with emerging climate regulations and carbon pricing programs
  • Supports access to green financing options and sustainable procurement

Failing to measure Scope 1 can lead to missed emission reduction and cost savings potential, loss of competitive advantage, and threats from rising transition risks.

Identifying Scope 1 Emission Sources in SME Operations

Typical Scope 1 emissions for SMEs can arise from:

  • Company vehicles: cars, trucks, fleet vehicles, delivery vans, forklifts
  • On-site fuel combustion: boilers, generators, furnaces, ovens
  • Fugitive refrigerants: from AC, refrigeration, and cooling equipment
  • Industrial processes: cement, chemicals, manufacturing, metals, mining, etc.
  • Agriculture: livestock, soils, rice cultivations
  • Waste/effluents: solid waste and wastewater treatment

Proper quantification and Category assignment of these direct emission sources per the GHG Protocol ensures accurate carbon accounting and informs reduction strategies for SMEs. Robust data collection, measurement methodologies, and reporting processes are key.

What is scope 1 in GHG Protocol?

The GHG Protocol defines scope 1 emissions as direct greenhouse gas (GHG) emissions that occur from sources that are controlled or owned by an organization. Some examples of scope 1 emission sources are:

  • Fuel combustion from boilers, furnaces, vehicles etc. owned by the organization
  • Fugitive emissions from refrigerants in AC units or other equipment owned by the organization
  • On-site landfills or wastewater treatment plants operated by the organization

So in essence, scope 1 covers emissions over which the organization has direct control and ownership. Understanding scope 1 emissions is key for organizations looking to calculate their carbon footprint and track their progress towards sustainability goals.

Some key things to know about GHG Protocol scope 1:

  • It includes all direct emissions from stationary combustion, mobile combustion, process emissions, and fugitive emissions associated with operations owned or controlled by the reporting organization
  • Organizations should account for all scope 1 emission sources and activities within their organizational boundaries
  • Common methodologies used to calculate scope 1 emissions are based on fuel/material consumption data, emission factors, global warming potentials etc.
  • Managing scope 1 is critical since these emissions are directly controllable and often a major component of an organization's carbon footprint

Getting robust scope 1 emissions data helps SMEs identify the largest emission sources under their control and target reduction efforts towards those. By understanding the key sources and magnitudes of their scope 1 emissions via GHG Protocol, SMEs can plan and execute emissions reduction initiatives in line with their net zero aspirations.

How to calculate Scope 1 and Scope 2 emissions?

Calculating Scope 1 and 2 emissions can seem daunting at first, but breaking it down into simple steps makes the process straightforward.

What are Scope 1 and 2 emissions?

Scope 1 covers direct emissions from owned or controlled sources like fuel combustion in company vehicles and on-site equipment. Scope 2 accounts for indirect emissions from purchased electricity, steam, heating, and cooling.

Steps to calculate Scope 1 and 2 emissions:

  • Identify emission sources: List all sources of fuel combustion and electricity/heat consumption associated with company operations. This includes boilers, furnaces, vehicles, generators, purchased electricity, and heating or cooling.
  • Collect activity data: Gather details on fuel and energy used over the reporting period - e.g. liters of diesel burned or kWh of electricity consumed.
  • Select emission factors: Multiply activity data by emissions per unit for each fuel type. Widely accepted factors are available from reliable sources like government agencies.
  • Calculate and report emissions: Following {primary_keyword} calculation methods, sum the emissions from each source annually in metric tons of CO2 equivalent.

Properly categorizing emission sources into Scope 1 and Scope 2 as per the {primary_keyword} makes GHG accounting and reporting simple. With good data collection and emission factor selection, SMEs can easily track and benchmark emissions over time.

What is the scope 2 GHG Protocol?

The GHG Protocol Corporate Standard classifies a company's greenhouse gas emissions into three categories or "scopes":

  • Scope 1 covers direct emissions from owned or controlled sources. Examples include emissions from fuel combustion in boilers, furnaces, vehicles, etc.
  • Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the company.
  • Scope 3 includes all other indirect emissions that occur in a company's value chain including both upstream and downstream emissions.

Why Measure Scope 2 Emissions?

For most companies, emissions from purchased electricity, steam, heating and cooling (scope 2 emissions) represent a significant emission source and operational cost. Here are some key reasons companies should measure and report their scope 2 emissions:

  • Identify opportunities to reduce emissions through energy efficiency, renewable power purchases, etc. This can lead to cost savings.
  • Comply with GHG reporting mandates and sustainability standards that require disclosure of scope 2 emissions.
  • Respond to stakeholder requests for emissions data, including from customers and investors.
  • Benchmark performance against industry peers and track progress over time by consistently tracking scope 2 emissions year-over-year.

Overall, measuring scope 2 gives companies better visibility into a major emission source they can control and influence. It enables smarter energy management decisions to reduce costs and emissions over time.

How to reduce Scope 1 GHG emissions?

Reducing Scope 1 emissions refers to decreasing the direct greenhouse gas (GHG) emissions from sources owned or controlled by a company. Here are some effective ways SMEs can reduce their Scope 1 carbon footprint:

Switch to renewable energy sources

Transitioning from fossil fuel-based energy to renewable alternatives like solar, wind, or hydropower can significantly cut Scope 1 emissions. Installing on-site renewable energy infrastructure can eliminate emissions, while signing green power purchase agreements allows companies to source electricity from clean providers. The ghg protocol scope 1 guidelines have renewable energy accounting methods to make this process simpler.

Improve energy efficiency

Upgrading equipment, optimizing operations, and implementing energy-savings measures are impactful ways to shrink energy use and Scope 1 emissions. Smart building controls, LED lighting, high-efficiency HVAC can all drive efficiency. Monitoring energy performance regularly also helps identify savings opportunities.

Electrify vehicles/equipment

Replacing combustion-engine vehicles and machinery with electric alternatives eliminates direct emissions from mobile sources owned by the company. Installing EV charging infrastructure can also encourage employees to switch to electric transport.

Purchase high-quality carbon offsets

Carbon offsetting involves funding external emission reduction activities to neutralize unavoidable Scope 1 emissions. Offsets should be verified as per Offset Quality Initiative or Gold Standard frameworks to ensure their integrity.

Though less intensive than eliminating emissions at source, high-quality offsets are a valid way for SMEs to immediately neutralize residual Scope 1 emissions as they work towards larger operational changes.


GHG Protocol Scope 1 Calculation Guidance for SMEs

Measuring Scope 1 emissions can be a complex process, especially for small and medium-sized enterprises (SMEs) new to sustainability reporting. However, with some guidance on the key concepts and methodology behind GHG Protocol Scope 1 calculations, SMEs can develop the capabilities to accurately measure and report their direct emissions sources.

This article provides practical guidance on:

  • Identifying Scope 1 emission sources
  • Collecting accurate activity data
  • Applying appropriate emissions factors
  • Consolidating and reporting total Scope 1 emissions

Follow these steps to ensure your SME calculates Scope 1 emissions as per the GHG Protocol Corporate Standard.

Determining Your GHG Protocol Scope 1 and 2 Emission Sources

The first step is understanding what classifies as a Scope 1 emission source under the GHG Protocol. Scope 1 covers direct emissions from owned or controlled sources including:

  • Stationary combustion from boilers, furnaces, vehicles, etc.
  • Mobile combustion from cars, trucks, marine vessels, aircraft, etc.
  • Process emissions from physical or chemical processes
  • Fugitive emissions from leaks, cooling systems, etc.

Conduct an audit of your operations to create a comprehensive inventory of all Scope 1 emission sources. This ensures accurate carbon accounting and reporting.

Tools like EcoHedge Express can simplify auditing by providing checklists of common Scope 1 sources grouped by industry, size, etc. Leverage these tools to accelerate your inventory process.

Collecting Activity Data for Accurate Scope 1 Calculations

With an inventory of Scope 1 sources complete, the next step is collecting activity data associated with each emission source over your chosen reporting period (typically annually).

Activity data refers to information like:

  • Fuel consumption
  • Production output
  • Miles traveled
  • Refrigerant recharges

This raw data serves as the input for quantifying GHG emissions using calculations or modeling. Reliable activity data is vital for accurate Scope 1 reporting.

Leverage meter readings, purchase receipts, equipment sensors, fleet telemetry, and other tools to collect comprehensive, high-quality activity data from all Scope 1 sources.

Applying Emission Factors for Scope 1 Emissions Quantification

Emission factors help convert activity data into a GHG emissions figure. Factors are usually expressed as weight of CO2e emitted per unit of activity data (e.g KgCO2e/liter of diesel combusted).

Refer to reputable sources like UK DEFRA, US EPA, IPCC Guidelines, etc. for standardized, locally-relevant emissions factors. Apply the appropriate factor to each activity data input.

For example, if you combusted 60,000 liters of diesel over the reporting period, apply the relevant diesel emission factor (e.g 2.68 KgCO2e/liter) and derive total emissions.

Emission factors allow tangible measurement of even complex Scope 1 emissions like methane from agriculture or perfluorocarbons from aluminum smelting.

Consolidating Scope 1 Emissions for Corporate Reporting

With Scope 1 emissions from all sources quantified, the final step is consolidation.

Sum emissions from all direct sources to derive total Scope 1 emissions over your chosen reporting period. Clearly document any exclusions.

The consolidation methodology depends on your corporate structure. For simpler businesses, simply sum the total emissions.

For entities with complex structures, consolidate based on operational or financial control. Refer to the GHG Protocol for guidance.

Robust analytics software like EcoHedge Lifecycle can automatically aggregate Scope 1 emissions based on your business boundaries and rules engine to prevent errors.

Accurately measuring and reporting Scope 1 forms the foundation for building a complete corporate GHG inventory. Use these guidelines to achieve GHG Protocol conformance. Reach out for tailored guidance suitable to your unique business context and sustainability maturity.

Implementing the GHG Protocol Scope 1 and 2 Guidance in Inventory Management

The Greenhouse Gas (GHG) Protocol provides globally recognized standards for measuring and managing greenhouse gas emissions from private and public sector operations. Implementing the GHG Protocol Corporate Standard ensures consistent tracking and reporting of Scope 1 direct emissions and Scope 2 indirect emissions.

Here are some best practices for developing an accurate, up-to-date corporate GHG emissions inventory.

Designing Effective Systems for GHG Tracking

To effectively track Scope 1 and 2 emissions over time, companies need to establish robust data collection and management systems. Some key elements include:

  • Identifying all direct and indirect emission sources covered under Scope 1 and 2. This includes fuel consumption, electricity usage, refrigerant leaks, company vehicles, employee commuting, and more.
  • Developing data collection templates and tools to consistently record activity data like fuel and electricity consumption. Integrate measurement tools like smart meters where possible.
  • Centralizing data storage in a GHG accounting platform that automatically calculates emissions using accurate emission factors. This eliminates manual calculations and improves accuracy.
  • Assigning responsibility across departments for collecting and managing different emissions data streams. Provide training on using any templates or tools.
  • Scheduling regular checks to ensure all emission sources are being tracked completely and accurately. Update inventories whenever changes occur.

Auditing Your GHG Inventory for Accuracy

To meet GHG Protocol reporting principles like relevance, completeness, consistency, transparency and accuracy, companies should conduct periodic audits. Useful steps include:

  • Performing completeness checks to ensure all Scope 1 and 2 emissions sources are included.
  • Sampling data entries for accuracy and tracing back to source data for verification.
  • Comparing emissions trends year-over-year to check for unexplained fluctuations. Investigate any significant variances.
  • Validating methodologies and emission factors used through independent expert review.
  • Following recognized verification standards like ISO 14064-3 when assuring GHG inventory quality.

Regular audits improve confidence in reported emissions and help identify areas for improving GHG monitoring and management.

Establishing Baselines for Scope 1 Emission Targets

After developing a robust inventory management system, companies can establish an emissions baseline as a reference point for setting Scope 1 reduction targets. Useful practices include:

  • Using a minimum of 3 years of reliable emissions data to determine the baseline level.
  • Choosing the consecutive 12-month period with the most relevant and accurate data as the baseline year.
  • Recalculating the baseline when structural changes like acquisitions, divestments or outsourcing significantly impact Scope 1 emissions.
  • Comparing performance against the baseline year and adjusting reduction targets accordingly based on progress achieved.

Carefully determining the baseline and monitoring any adjustments needed provides a sound foundation for demonstrating measurable progress on Scope 1 emission reductions over time.

Actionable Strategies to Minimize SME Scope 1 Emissions

Scope 1 emissions refer to direct greenhouse gas (GHG) emissions that occur from sources owned or controlled by a company. As per the GHG Protocol Corporate Standard, Scope 1 emissions typically include those from fossil fuels burned on-site, company vehicles, fugitive emissions, and more. For small and medium-sized enterprises (SMEs), Scope 1 likely makes up a significant portion of their overall emissions footprint.

As such, focusing efforts on minimizing Scope 1 is crucial for SMEs aiming to reduce emissions in line with net zero commitments. Here are some actionable tactics and solutions.

Adopting Renewable Energy to Curb Scope 1 Emissions

Transitioning to renewable energy sources is one of the most impactful ways SMEs can reduce Scope 1 emissions. This involves:

  • Installing on-site solar PV systems to generate clean electricity
  • Procuring 100% renewable energy from the grid through power purchase agreements
  • Switching heating systems from natural gas/oil to electric heat pumps

Not only does renewable energy eliminate carbon emissions from electricity usage, it also removes reliance on fossil fuels across operations. Government incentives can offset upfront investment costs too.

Improving Efficiency to Reduce Scope 1 Footprint

Enhancing energy efficiency is a cost-effective approach to lowering Scope 1 emissions. Key strategies include:

  • Upgrading equipment (HVAC, lighting) to more efficient models
  • Insulating buildings to reduce heat loss/gain
  • Installing smart building controls and sensors
  • Analyzing energy usage patterns to identify savings opportunities

Efficiency projects tend to have fast payback periods through utility savings, requiring less upfront capital than renewable energy investments.

Innovating Business Practices for GHG Emission Reductions

SMEs can also reduce Scope 1 through business model changes like:

  • Shifting to electric fleet vehicles for sales, deliveries
  • Enabling remote working arrangements to minimize commuting
  • Offering cycling facilities to encourage staff active transport
  • Identifying process innovations to enhance material/resource efficiency

Such initiatives demonstrate commitment to sustainability while benefiting productivity, staff retention and cutting costs.

With the right energy transition strategies combined with efficiency gains and business practice innovation, SMEs can effectively minimize their Scope 1 emissions on the pathway to net zero.

Engaging Stakeholders with Your Scope 1 Reduction Initiatives

Reducing Scope 1 emissions from your operations is an impactful step towards mitigating climate change. However, achieving meaningful progress requires engaging key internal and external stakeholders in your sustainability initiatives. This section offers guidance on transparently reporting your emissions data and cultivating buy-in across your organization to drive reductions.

Transparency in Reporting Scope 1 Emissions Data

Clearly communicating your Scope 1 emissions and reduction targets is crucial for accountability. Consider these best practices:

  • Publish annual sustainability reports detailing your baseline emissions, reduction goals, and mitigation strategies. Benchmark against industry averages.
  • Segment data by emission source, location, or business unit to showcase progress and identify priority areas.
  • Compare performance over time and highlight percentage reductions year-over-year.
  • Put data into context by converting emissions into relatable units like cars taken off the road.
  • Obtain third party verification for maximum credibility.

Transparency builds trust with stakeholders and motivates further action.

Cultivating a Climate-Conscious Workforce

Engaging your workforce in sustainability fosters an ownership mindset that catalyzes change. Tactics include:

  • Educate staff on sources of Scope 1 emissions through lunch-and-learns or digital campaigns. Connect the dots between daily activities and climate impact.
  • Incentivize emissions reduction ideas through competitions and rewards programs. Empower all levels to contribute.
  • Set carbon budgets for business units based on output or headcount. Added accountability drives conservation behaviors.
  • Celebrate wins and milestones publicly. Recognition feeds engagement.

With an empowered, eco-conscious workforce rallied behind a common purpose, your business can maximize its sustainability potential.

Conclusion: Integrating GHG Protocol Scope 1 into SME Sustainability Plans

GHG Protocol Scope 1 refers to direct greenhouse gas (GHG) emissions that are emitted from sources owned or controlled by a company. For small and medium-sized enterprises (SMEs), Scope 1 emissions often come from on-site fuel combustion, company vehicles, and fugitive emissions.

As SMEs develop their sustainability strategies, rigorously tracking and reducing Scope 1 emissions should be a key priority. Not only do these emissions fall under an SME's direct control, but addressing them can unlock major cost and emissions savings.

Recognizing the Reduction Potential of Scope 1 Emissions

Scope 1 presents a major GHG reduction opportunity for SMEs. With targeted investments and operational changes, SMEs can significantly cut Scope 1 emissions from their facilities, fleets, and equipment.

Transitioning on-site energy generation to renewable sources, improving building insulation, and upgrading fleet vehicles are all impactful Scope 1 interventions. What's more, these measures can generate major cost savings over time through efficiency gains.

By recognizing the scale of their Scope 1 footprint and reduction potential, SMEs can set ambitious, meaningful emissions goals.

Ensuring Consistency and Cooperation in Emissions Management

To effectively mitigate Scope 1 emissions, SMEs need a coordinated, company-wide effort. Scope 1 sources are dispersed across departments and facilities, requiring cooperation from all staff and leadership.

Companies should strive for consistent emissions accounting, data collection, and reporting processes for Scope 1 sources. Annual inventory assessments using methodologies like the GHG Protocol Corporate Standard can accurately quantify Scope 1 emissions.

With a unified approach to tracking and managing Scope 1 emissions, SMEs put themselves in the best position to make meaningful, sustained emissions reductions.

Related posts

Read more