stories that make a difference

stories that make a difference

apply now

online banking

The Scoop on Scopes - 1, 2, 3 Emissions Explained

Chris Cucci & Lauren Dube


The climate change discussion has never been more critical than it is today. We all have a responsibility to do our part to reduce greenhouse gas (GHG) emissions, but where do you start? The short answer is that it begins with understanding the scope of your organization's carbon footprint, including everything from direct energy use to indirect emissions through supply chains. You should also know what kind of GHG emissions reports are available and how they can help you—and how they differfrom one another.

There are four key parts to a greenhouse gas (GHG) emissions report

You may have heard the terms "scope 1," "scope 2" and "scope 3" emissions. Here's what they mean:

Image sourced from

Scope1 and 2 Emissions

Scope 1 Emissions: These are direct emissions from owned or controlled sources. For example, if you consider operation of gas-powered piece of equipment or vehicle owned by your company, your scope 1 emissions would be the CO2 emitted by that equipment or vehicle.

Scope 2 Emissions: These are indirect emissions associated with the purchase of electricity, steam, heat, or cooling. An example of this would be electricity purchased for direct use by the company.  

Scope3 Emissions

Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain. This would include categories like business air travel, employee commuting, and waste generated in operations.

Scope 3 emissions are sometimes overlooked because they're not readily visible like Scope 1 and 2emissions--but they can add up quickly! In fact, according to an EPA report on greenhouse gas emissions from U.S. businesses in 2014: "Electricity accounted for 65% of total [scope 3] direct GHG emissions."

Carbon Footprint vs GHG Emissions Reporting

The term "carbon footprint" refers to the amount of carbon dioxide (CO2) emitted by a person or organization in a given time period. Carbon footprints are typically expressed in units such as tons per year, which is equivalent to the number of tons of CO2 emitted during that time period.

The term "GHG emissions reporting" refers to the amount of greenhouse gases (GHGs) emitted by a person or organization in a given time period. GHG emissions reporting can be expressed in units such as tons per year, which is equivalent to the number of tons of CO2 from all sources combined over the course of one year.

Since CO2 is not the only GHG that is driving climate change, we have measurement of CO2e which includes all GHGs and is expressed in terms of the amount of CO2 that would result in the same amount of global warming. CO2e is considered a more accurate measure of emissions impact since it includes all GHGs not just CO2 in the calculation.

Scope1, 2 and 3 emissions are all important considerations in the climate change discussion.

The scope 1, 2 and 3 emissions are all important considerations in the climate change discussion. Scope 1emissions are direct from the facility and include things like fuel burned by company vehicles and equipment operated onsite. Scope 2 emissions are in direct from the facility--for example, if you run an office building with many computers that use electricity generated by a coal burning power plant, then your computer usage would be considered a scope 2 emission because it's not happening directly at your building site but still impacts its carbon footprint(and therefore climate).

Scope 3 refers to other indirect sources of greenhouse gas emissions that come out through business activities like business air travel, emissions of leased assets, purchased goods and services, shipping products around the world or operating supply chains (for example: making paper cups).


In conclusion, it's important to remember that GHG emissions are a complex issue that requires thoughtful consideration. The bottom line is that there are many factors at play when it comes to climate change and its impact on our planet. While understanding your company's scope 1-3 emissions can help with this process, it's also very important not to lose sight of other factors like energy efficiency or overall carbon footprint--which should always be considered when making decisions about how much energy should be used in order to produce goods or services as well as how much waste could be reduced by using renewable resources such as solar power instead of fossil fuels!

About Climate First Bank

Climate First Bank is the world’s first FDIC-insured community bank founded to combat the climate crisis. Unlike most banks, Climate First Bank uses customers’ deposits to fund solar loans for both commercial and personal customers. To date, we’ve approved $17.8M of solar loans since we started the program in May 2022. By opening an account with us, you can be sure that we’re not investing your dollars into the fossil fuel industry, instead we’re empowering businesses and individuals to tackle the climate crisis through renewable energy.  

Climate First Bank partners with select organizations to ensure our mission is achieved through measurable impact:  

So, not only will you benefit from a fixed interest rate, guaranteed results, and peace of mind that your money is insured, you’ll also be proactively protecting our planet. And you can do everything online, there’s no need to step foot into a branch.  

For more information, take a look at our personal and business banking products, or contact our Florida-based team at  

Back to Blogs



As the nation’s first climate-focused bank, Climate First Bank is a full-service community bank offering both personal and commercial banking services. We are proud to serve our communities as we work together to promote sustainability and reverse the climate crisis.
Click below to open your account today!