Climate Emissions Terminology

Climate related emissions are measured in tonnes of carbon dioxide equivalence (CO2e-­) and the relevant greenhouse gases include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6) and specified hydrofluorocarbons and perfluorocarbons.

Climate emissions reporting seeks to measure and account for:

  • the direct emissions from sources that are owned or controlled by the reporting entity; and
  • the indirect emissions that are a consequence of the activities of the reporting entity, but occur at sources owned or controlled by others.

Emissions are reported under 3 scopes:

  • Scope 1 (direct emissions): emissions directly resulting from an entity’s activities at a facility level. For example, emissions from the entity’s manufacturing processes or burning diesel fuel in trucks used by the entity.
  • Scope 2 (indirect emissions – energy): indirect emissions from the entity’s consumption of energy generated at another facility. For example, where an entity purchased electricity, the emissions from the generation of that electricity.
  • Scope 3 (indirect emissions – widely generated): all indirect emissions from sources owned or controlled by others in the value chain of an entity, including those associated with financing or investment activities. For example, emissions from an entity’s product when a customer uses the product, and emissions from third party logistics providers.

Scope 1, Scope 2 and Scope 3 are mutually exclusive for the reporting entity. However, two or more entities may account for the same emission in Scope 3. For example, the Scope 1 emissions of an electricity generator are the Scope 2 emissions of the user of an electrical appliance and the Scope 3 emissions of the appliance manufacturer and the appliance retailer.