How companies collect or estimate Direct and Indirect Emissions in practice?

Companies calculate direct and indirect emissions by following guidelines from frameworks such as the Greenhouse Gas (GHG) Protocol, which differentiates emissions into Scope 1, 2, and 3. Scope 1 (Direct Emissions) are calculated based on operational data, such as fuel consumption in company vehicles or industrial processes. Companies often use emission factors, which convert the amount of consumed fuel or materials into GHG emissions, to estimate these direct emissions accurately. Scope 2 (Indirect Emissions from purchased energy) calculations involve gathering data on the amount of purchased electricity, steam, heating, and cooling. The emissions are then calculated using emission factors provided by utility companies or regional averages, which reflect the mix of energy sources used to generate the purchased energy. Scope 3 (Other Indirect Emissions) encompasses a wide range of activities from the company’s value chain, including business travel, transportation, and waste disposal. Estimating these emissions is more complex and often involves collecting data from suppliers, using industry-specific models, and applying standardized emission factors. Companies may also use surveys and spend-based approaches, alongside data management tools, to gather necessary information and ensure comprehensive coverage of their indirect emissions. In practice, the accuracy and availability of data, alongside evolving methodologies, play significant roles in how companies estimate their direct and indirect emissions.