You can think of emissions in terms of four categories:

• Scope 1 – direct emissions from burning fossil fuels. For road transport, these are the fuels an organisation buys and burns, such as diesel, petrol, liquefied petroleum gas (LPG) and natural gas.
• Scope 2 – indirect emissions from the generation of purchased electricity. This includes the greenhouse gas (GHG) emissions associated with generating the electricity used to charge plug-in electric vehicles.
• Scope 3 – all other indirect emissions associated with salary sacrifice cars and grey fleet vehicles. The organisation has paid for the use of these vehicles, including the purchase of fossil fuels or electricity, meaning the associated emissions can be considered part of the organisation’s overall emissions.
• Out of scope – GHG emissions that cover the biogenic emissions associated with biofuels such as biomethane, biodiesel and bioethanol. These are carbon emissions produced from short-cycle carbon sources such as crops.

If your organisation is large, you must report:

• Scope 1 emissions.
• Scope 2 emissions.
• Relevant Scope 3 emissions that you have direct control over, including emissions associated with the grey fleet, salary sacrifice cars, rail travel and air travel.

It may also be worthwhile reporting Scope 3 emissions associated with your supply chain, both upstream and downstream. Although not mandatory, this is regarded as best practice, provided it does not affect your organisation’s reporting of Scope 1 and Scope 2 emissions.

You can take several measures to reduce Scope 1 and Scope 2 GHG emissions, as well as Scope 3 transport emissions. These include:

• Choosing smaller vans.
• Implementing a pro-electric company car policy.
• Setting carbon emission limits for cash allowance and grey fleet vehicles.

Reducing the carbon emissions embedded in purchased supplies may be more challenging and may have less impact.

Why do you need to use these categories?

These categories help you avoid double counting emissions.

For example:

• If your organisation burns fossil fuels, you will report the resulting emissions as Scope 1 emissions.
• The Scope 2 emissions associated with electricity use become the Scope 1 emissions of the generating company that burned the gas or coal to produce the electricity.
• The Scope 3 emissions associated with a train journey become the Scope 1 emissions of the train operator that burned the diesel used to power the train.

You need to report Scope 2 and Scope 3 emissions because they are created in response to demand from the end user. For example, the electricity consumer or train passenger creates the demand for the service. Without that demand, the service provider’s Scope 1 emissions would not occur.

If your organisation wants to reduce its Scope 2 and Scope 3 emissions, you will need to encourage suppliers to reduce their Scope 1 emissions.