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Scope 1, 2, and 3 Emissions Scope 1: Emissions released into the atmosphere that are a direct result of sources that are owned or controlled by the company. This constitutes the direct emissions from facility-level activities like manufacturing processes, or the onsite production of electricity by burning coal GHG emissions not covered by the Kyoto Protocol, e.g.CFCs, NOx, etc. shall not be included in scope 1 but may be reported separately Scope 2: Scope 3: Emissions released into the atmosphere from purchased electricity, steam, heating, and cooling. These are indirect emissions. The two methodologies recommended for accounting scope 2 emissions are the market-based approach and location-based (grid-based) approach Indirect emissions other than scope 2 that may be a consequence of activities of the company, but occur from sources not owned or controlled by the company itself These emissions are often referred to as 'supply chain emissions' or 'embodied carbon'. Supply chain emissions account for 5.5 times more emissions on average than a company's direct emissions To satisfy the extent of Scope 3 emissions, producers would need to report their own performance, as well as the performance of all suppliers, buyers, subcontractors, and other contributors to the product There exist some major challenges surrounding the calculation and tracking of scope 3 emissions. Mainly, the lack of a sector-specific framework to align accounting across various materials and end uses, and differing interpretations among entities of scope 3 boundaries Emissions are classified into scopes for differentiating between direct and indirect emissions of a business and for more accurate measurement and reporting overall. Sustainability & Energy Management Simplified

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