Coping with scopes in ESG, this may sound like a song’s chorus but it’s not. As businesses are increasingly pressured to reduce their environmental impact, understanding and managing greenhouse gas emissions is essential. This is especially true for software companies, which often have a significant carbon footprint. Many individuals and organisations are starting to take notice of their impact, but what exactly are Scope 1, 2, and 3 emissions? This post will look closer at them and consider how these emissions apply specifically to software use and development.
What Are Scopes 1, 2, and 3 Emissions?
The Greenhouse Gas Protocol categorises emissions into three scopes. This framework helps organisations better measure and manage their environmental impact.
Let’s take a closer look at each scope.
- Scope 1 emissions are direct emissions from sources that are owned or controlled by the company. Examples of this could include company-owned vehicles and on-site heating equipment. The International Energy Agency found that building heating and cooling systems account for 30% of global energy consumption and 26% of global energy-related emissions.
- Scope 2 emissions are indirect emissions that result from the purchase of energy, such as electricity used in offices and data centres. Scope 2 emissions highlight the importance of energy sources. Companies that transition to renewable electricity can significantly reduce their Scope 2 emissions. The challenge lies in managing energy consumption efficiency across operations.
- Scope 3 emissions include all indirect emissions, both upstream and downstream, that occur in a company’s value chain. These are often the most complex to manage, as they include emissions from suppliers, business travel, employee commuting, and even customer use of products. Scope 3 often makes up the largest part of a company’s carbon footprint. It includes emissions not directly controlled by the organisation but still related to its activities. Reducing Scope 3 emissions requires companies to work closely with suppliers, optimise product lifecycle management, and engage customers in emission reduction efforts.
Scopes 1, 2, and 3 in the Software Industry
Scope 1 Emissions
Software companies generate Scope 1 emissions through their assets and operations, including:
- On-site data centres consume significant amounts of energy. For example, one month of data centre energy consumption can power between 7-13 average American homes for a whole year5. Globally, data centres represent approximately 1% to 2% of the world’s total electricity consumption.
- Emergency generators, often using diesel, produce significant emissions. A single diesel generator operating at full capacity can produce 0.68 – 0.740 kg CO2e/kWh, which is more than grid electricity that uses a low amount of nuclear energy (0.650 kg CO2e/kWh).
Scope 2 Emissions
Indirect emissions from purchased energy sources include:
- Electricity for offices and development centres: All the computers, servers, and AC units need juice, and if that electricity is coming from CO2 emitting sources, you’re racking up the emissions points.
- Cooling systems for IT infrastructure: Keeping those servers from melting down takes a lot of energy, adding to your Scope 2 footprint.
Scope 3 Emissions
Representing over 70% of a company’s carbon footprint, Scope 3 emissions for the software industry can include:
- Cloud services and data centre operations: If you’re using cloud services (and who isn’t these days?), the emissions from those data centres are part of your Scope 3 footprint.
- Employee remote work setups: Laptops, monitors, and home offices plugged in are contributing to emissions.
- Business travel: Jet-setting to conferences and client meetings might be fun, but it leaves a hefty carbon trail
- Hardware manufacturing: The environmental impact of producing all those laptops, smartphones, and servers falls under your Scope 3.
- End-user software consumption: This is where it gets really interesting (and a bit scary). The energy your customers use to run your software on their devices contributes to their Scope 3 emissions, but it’s ultimately tied back to you.
The Impact of Software on CO2 Emissions
The IT industry faces a unique challenge when it comes to carbon emissions, particularly with Scope 3. In fact, they can be 11.4 times higher than a technology company’s operational emissions. This is a huge proportion of emissions compared to other industries, and as reliance on technology increases, it’s important to understand its overall impact.
Understanding Emissions from Software Use
Software use contributes to a client’s Scope 3 emissions in several ways78. These include:
- Energy consumption: Running software, particularly data-heavy applications, requires significant energy.9.
- Hardware requirements: Powerful hardware is needed for some software, which can mean more frequent upgrades and increased energy use9.
- Cloud services and data centres: Using cloud-based services means emissions are tied to the data centre’s energy source, and these can be significant.
Software efficiency: Well-optimised software uses less processing power, resulting in less energy consumption.
How to Reduce Scope 3 Emissions from Software Use
Clients and software vendors can take steps to reduce the carbon footprint of software.
Client actions
Clients can reduce their Scope 3 emissions by:
- Choosing software vendors that use cloud providers committed to renewable energy.
- Using software efficiently by managing data loads and reducing unnecessary tasks.
- Evaluating the sustainability practices of their software vendors.
Vendor actions
Software vendors can support clients in meeting their sustainability goals by:
- Partnering with cloud providers who use renewable energy.
- Developing energy-efficient software.
- Educating clients on how to use their software efficiently.
- Being transparent about their emissions and taking steps to reduce them.
- Collaborating with suppliers to reduce emissions.
- Offering “as-a-service” options and device subscriptions to reduce energy consumption.
Keep in mind that manufacturing a computer has a much larger carbon footprint compared to its usage period. Usage accounts between 15% and 25% of the overall carbon footprint of a PC, depending on its lifetime. Extend the device lifecycle or choose recycled PCs to have a significant impact of carbon footprint reduction.
Examples of Companies Taking Action
Many high-tech companies have already started taking action to reduce their Scope 3 emissions. Some examples include:
- Cisco is committed to achieving net-zero emissions across its entire value chain by 2040.
- Johnson Controls has set a target of a 16% Scope 3 reduction by 2030 and aims to use 100% renewable electricity globally by 2040.
- Lenovo was the first PC and smartphone maker to set a net-zero emissions goal across its value chain by 2050.
- Nokia aims to reduce their Scope 1, 2, and 3 emissions by 50% between 2019 and 2030.
In Conclusion
Understanding and managing Scopes 1, 2, and 3 emissions is crucial for companies aiming to reduce their overall carbon footprint. For software vendors, it’s not just about compliance but about enabling their clients to achieve sustainability goals as well. By focusing on how software impacts emissions from a client perspective, organisations can make more informed choices that lead to substantial reductions in energy use and greenhouse gas emissions.
Ready to make an impact? Start exploring opportunities to reduce emissions across your value chain and become a trusted partner for sustainability-minded clients. You can explore recommendations
FAQs
What are Scope 1, 2, and 3 emissions in simple terms?
- Scope 1: Direct emissions from your company’s operations, like fuel used in company vehicles.
- Scope 2: Indirect emissions from the energy you buy, like electricity for your office.
- Scope 3: All other indirect emissions in your value chain, like emissions from your suppliers or from your products being used.
Why are Scope 3 emissions so important in the software industry?
Software companies rely heavily on complex supply chains and cloud services, which contribute significantly to Scope 3 emissions. Plus, the energy used to run software by end-users adds to the overall impact.
How can I reduce my company’s Scope 3 emissions from software?
You can choose software vendors who prioritise sustainability, encourage efficient software use within your organisation, and explore options like “as-a-service” models for hardware.
