From Source to System: Understanding Scope 1, 2, and 3 Emissions - Part 2
- Kevin Bolland
- 10 hours ago
- 4 min read
Scope 2 Emissions: Purchased Energy and Indirect Impacts
In Part 1 of this series, we explored Scope 1 emissions—the greenhouse gases released directly from sources owned or controlled by an organization. These emissions often include vehicle fuel consumption, industrial processes, and on-site equipment operation.
But what happens when a company doesn't generate emissions directly, yet still relies heavily on energy produced elsewhere?
This is where Scope 2 emissions enter the picture.
Scope 2 emissions account for the indirect greenhouse gas emissions associated with purchased energy. Although these emissions occur at a power plant or energy facility rather than at a company's location, they are still a consequence of the organization's energy consumption.
For many organizations, Scope 2 emissions represent a significant portion of their environmental footprint. Understanding where energy comes from—and how it is produced—is an important step toward understanding the broader impacts of business operations.
What Counts as Scope 2 Emissions?
Definition
According to the Greenhouse Gas Protocol, Scope 2 emissions are indirect greenhouse gas emissions associated with the generation of purchased or acquired energy consumed by an organization.
This typically includes:
Purchased electricity
Purchased steam
Purchased heating
Purchased cooling
Although the emissions physically occur at the energy-generating facility, they are attributed to the organization that consumes the energy.
Key Characteristics
Scope 2 emissions:
Are indirect emissions.
Result from purchased energy consumed by an organization.
Occur outside the organization's physical operations.
Are often influenced by the energy mix of a local utility grid.
Can vary significantly based on geography and energy sources.
For example, one facility may consume the same amount of electricity as another but produce far fewer associated emissions if its electricity is generated primarily from renewable energy sources.
Industry Example 1: Gardening, Landscaping, and Nurseries
Gardening and landscaping operations increasingly rely on electricity for a wide range of activities.
Common Sources
Examples of Scope 2 emissions include:
Greenhouse lighting systems
Irrigation pumps
Refrigeration equipment
Electric landscaping equipment charging stations
Office buildings and retail garden centers
Climate-control systems within greenhouses
Real-World Scenario
A nursery operates several climate-controlled greenhouses to support year-round plant production. The facility uses electricity for lighting, ventilation, irrigation controls, and temperature management.
Although no emissions are released directly from the greenhouse itself, the electricity consumed may be generated by natural gas, coal, hydroelectric, solar, wind, or nuclear facilities elsewhere on the grid.
The greenhouse's purchased electricity therefore creates Scope 2 emissions.
How These Emissions Are Measured
Organizations commonly use:
Utility bills
Kilowatt-hour (kWh) consumption records
Utility-specific emissions factors
Regional electricity grid emissions data
Opportunities for Improvement
Potential reduction strategies include:
Installing energy-efficient lighting systems
Utilizing smart irrigation controls
Improving greenhouse insulation
Investing in on-site solar generation
Purchasing renewable energy where available
Industry Example 2: Air Travel and Aviation
While aircraft fuel consumption falls under Scope 1 emissions, aviation companies also consume substantial amounts of purchased electricity.
Common Sources
Examples include:
Airport office facilities
Airline headquarters
Aircraft maintenance hangars
Baggage handling systems
Terminal operations
Electric ground support equipment charging
Real-World Scenario
An airline may operate a large maintenance facility where aircraft are inspected, repaired, and serviced. The facility requires extensive lighting, ventilation, tooling, computing systems, and climate control.
The electricity consumed by these operations generates Scope 2 emissions because the energy is purchased from an external utility provider.
How These Emissions Are Measured
Organizations often track:
Electricity consumption records
Utility invoices
Facility energy management systems
Building energy monitoring platforms
Opportunities for Improvement
Organizations may reduce Scope 2 emissions by:
Upgrading facility efficiency
Installing solar arrays
Electrifying ground operations
Purchasing renewable electricity
Improving energy management systems
Industry Example 3: Fashion and Apparel
The fashion industry often relies heavily on energy-intensive manufacturing processes and facilities.
Common Sources
Examples include:
Textile manufacturing facilities
Fabric dyeing operations
Distribution centers
Retail stores
Corporate offices
Warehouse lighting and climate control
Real-World Scenario
A clothing company operates multiple retail locations and distribution centers throughout a region. Electricity powers lighting, inventory systems, refrigeration equipment, climate control systems, and digital infrastructure.
Although the company does not generate electricity itself, its energy consumption creates Scope 2 emissions associated with the utility's energy production.
How These Emissions Are Measured
Common measurement methods include:
Utility billing records
Energy management systems
Facility consumption reports
Electricity supplier data
Opportunities for Improvement
Potential strategies include:
LED lighting upgrades
Efficient HVAC systems
Building automation technologies
Renewable energy procurement
Energy-efficient facility design
Why Scope 2 Matters
Scope 2 emissions reveal an important reality: organizations can create environmental impacts even when emissions are not released directly from their facilities.
A company may eliminate nearly all direct fuel use while still relying on significant amounts of electricity generated from fossil fuels. Conversely, organizations operating in regions with cleaner electrical grids may report substantially lower Scope 2 emissions despite consuming similar amounts of energy.
This distinction helps organizations understand the environmental consequences of their energy choices and identify opportunities to improve efficiency or transition toward lower-carbon energy sources.
For many companies, Scope 2 reporting also highlights the interconnected nature of modern infrastructure. Electricity may appear invisible at the point of use, but the systems that generate, transmit, and distribute that energy have environmental impacts that extend well beyond a facility's walls.
Scope 2's Limitations
Like Scope 1 emissions, Scope 2 reporting captures only part of a company's overall footprint.
A nursery may reduce electricity consumption while continuing to purchase products shipped across continents. An airline may operate highly efficient maintenance facilities while relying on complex global manufacturing networks. A clothing brand may source renewable electricity for every retail store while purchasing materials from energy-intensive supply chains.
These impacts generally fall outside Scope 2 accounting.
In other words, a company can significantly improve its Scope 1 and Scope 2 performance while still generating substantial emissions elsewhere in its value chain.
Key Takeaway
Scope 2 emissions account for the indirect greenhouse gas emissions associated with purchased electricity, heating, cooling, and steam. While these emissions occur outside an organization's direct operations, they are still a consequence of the energy required to provide products and services.
Together, Scope 1 and Scope 2 emissions provide a clearer picture of operational impacts, but they still leave much of a company's environmental footprint unexplored.
In Part 3, we'll examine Scope 3 emissions—the broad category of upstream and downstream activities that often represents the largest portion of an organization's total greenhouse gas emissions and the most challenging part of sustainability reporting.
