Measuring Emissions

According to a BCG study, companies say they are struggling to cut their emissions in line with targets. Their inability to measure their carbon emissions appropriately is the leading roadblock. In a survey of 1,290 organizations, BCG found that:

  • 85% of the organizations are concerned about reducing their emissions, 

  • But only 9% are able to measure their emissions comprehensively

  • Respondents also estimate a 30-40% error in their emission measurement

In this section, we talk about how companies track their emissions.

Measuring emissions in organizations

Carbon emissions are classified into three categories or scopes: 

  • Scope 1 emissions: those produced by the organizations’ own facilities and vehicles and thus under its direct control

  • Scope 2 emissions: Emissions associated with purchasing electricity

  • Scope 3 emissions: upstream and downstream emissions, including those generated by suppliers and distributors, by employees’ business travel, and by the usage of products sold

Typically for any organization, Scope 3 emissions can range from 65-95% of their total carbon emissions footprint and make up the bulk of the overall emissions. 

The graphic below highlights the various sources of emissions and how they are classified.

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Why is measuring emissions difficult?

While measuring Scope 1 and Scope 2 emissions is easy (since you can easily monitor your own direct emissions), measuring Scope 3 emissions is very difficult. According to an HBR study, measuring carbon emissions is difficult primarily due to three reasons:

  • Lack of mandates and auditing standards,

  • Opaque supply chains, and

  • Complex and unique business processes

 

To illustrate this, we look at one example from Timberland below and just how complicated is measuring carbon emissions of one product line.

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