{"id":95893,"date":"2025-10-28T14:37:56","date_gmt":"2025-10-28T18:37:56","guid":{"rendered":"https:\/\/www.rbcroyalbank.com\/en-ca\/?post_type=rbc_my_money_matter&#038;p=95893"},"modified":"2025-11-05T10:05:19","modified_gmt":"2025-11-05T15:05:19","slug":"ready-to-tackle-your-companys-environmental-sustainability-strategy-start-with-scope-1-and-2","status":"publish","type":"rbc_my_money_matter","link":"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/ready-to-tackle-your-companys-environmental-sustainability-strategy-start-with-scope-1-and-2\/","title":{"rendered":"Ready to Tackle Your Company\u2019s Environmental Sustainability Strategy? Start with Scope 1 and 2"},"content":{"rendered":"\n<section class=\"wp-block-rbc-section-block  pos-rel\" style=\"border-radius:0px\">\n<div class=\"wp-block-rbc-section-inner-block  section-inner\" style=\"border-radius:0x\">\n<div class=\"wp-block-rbc-rbc-block drop-shadow pos-rel top-line-blue block-wpr\">\n<div class=\"wp-block-rbc-rbc-block-inner-block block-inner\">\n<h4 class=\"wp-block-heading\" id=\"h-tldr\">TLDR<\/h4>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Reducing greenhouse gas emissions can have benefits for businesses, including lower energy costs, improved brand reputation, and compliance with regulations.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>The GHG Protocol Corporate Accounting and Reporting Standard is a widely adopted framework for measuring and reporting emissions, which divides emissions into categories: Scope 1, Scope 2, and Scope 3.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Businesses can start by mapping out their Scope 1 and 2 emissions, identifying areas for reduction, and considering investments in energy-efficient equipment and technologies, with potential long-term returns on investment and business benefits.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Emissions reduction initiatives can be costly, requiring investment in new equipment, technologies and staff, but considering a staged approach and weighing the long-term returns on investment can help balance out the upfront expenses.<\/p>\n<\/li>\n<\/ul>\n<\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<p>Tell us if this sounds familiar: Your business\u2019s leadership, whether that\u2019s just you, a small team, or a full C-suite of executives,&nbsp;is keen to implement sustainability into their business strategy. You\u2019ve done some research, and learned that reducing greenhouse gas (GHG) emissions have &nbsp;potential payoffs that could be compelling: Less energy usage, lower operating expenses, and fewer GHG-related risks, including&nbsp;<a href=\"https:\/\/ghgprotocol.org\/sites\/default\/files\/standards\/ghg-protocol-revised.pdf\" data-dig-id=\"LP-95893-c1d4df59\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"regulatory\" class=\"rbc-link-format\">regulatory<\/a>,&nbsp;<a href=\"https:\/\/ghgprotocol.org\/sites\/default\/files\/2023-03\/Scope%202%20Guidance.pdf\" data-dig-id=\"LP-95893-689484a6\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"reputational\" class=\"rbc-link-format\">reputational<\/a>,&nbsp;<a href=\"https:\/\/www.bdc.ca\/en\/articles-tools\/sustainability\/climate-action-centre\/articles\/how-report-efforts-mitigate-climate-risks\" data-dig-id=\"LP-95893-ff368eee\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"transitional\" class=\"rbc-link-format\">transitional<\/a>&nbsp;and physical risks.<\/p>\n\n\n\n<p>Even if a climate sustainability or emissions-reduction strategy isn\u2019t yet on the table, there are benefits to&nbsp;<a href=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/carbon-management-what-is-it-and-should-your-business-do-it\/\" data-dig-id=\"LP-95893-4989c07d\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"starting to understand your company\u2019s GHG profile\" class=\"rbc-link-format\">starting to understand your company\u2019s GHG profile<\/a>. For one, being transparent with your emissions\u2014and your plans to reduce them\u2014can go a long way with stakeholders, such as customers, employees, and investors, who want to work with businesses that care about their GHG emissions. This is becoming particularly important for companies that operate within larger supply chains, where bigger corporations&nbsp;<a href=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/advice-for-approaching-your-businesss-supply-chain-audit\/\" data-dig-id=\"LP-95893-24446dd2\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"may request more visibility\" class=\"rbc-link-format\">may request more visibility<\/a>&nbsp;on their suppliers\u2019 emission output.<\/p>\n\n\n\n<p>The challenge for many companies, though, is understanding where emissions come from and how they\u2019re connected to your business\u2019 operations. Fortunately, several frameworks have been developed to help organizations better understand where their GHG emissions are coming from.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-get-to-know-the-ghg-protocol-for-measuring-and-reporting-emissions\">Get to know the GHG Protocol for measuring and reporting emissions<\/h2>\n\n\n\n<p>One of the more widely adopted frameworks for measuring and reporting GHG emissions is called&nbsp;<a href=\"https:\/\/ghgprotocol.org\/corporate-standard\" data-dig-id=\"LP-95893-5020ee07\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"the GHG Protocol Corporate Accounting and Reporting Standard\" class=\"rbc-link-format\">the GHG Protocol Corporate Accounting and Reporting Standard<\/a>, or the Corporate Standard, for short. It offers a&nbsp;<a href=\"https:\/\/ghgprotocol.org\/sites\/default\/files\/standards\/ghg-protocol-revised.pdf\" data-dig-id=\"LP-95893-fc3e9d64\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"step-by-step guide\" class=\"rbc-link-format\">step-by-step guide<\/a>&nbsp;for compiling a comprehensive corporate-level inventory of GHG emissions. Many companies start with this framework because it clearly divides emissions into \u201cscopes\u201d\u2014Scope 1, Scope 2 and Scope 3\u2014of direct and indirect emissions. That helps companies zero in on the emissions they have the greatest ability to track and reduce.<\/p>\n\n\n\n<p><strong>Read more: <a href=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/emissions-explained-understanding-scope-1-2-and-3-in-your-business\/\" data-dig-id=\"LP-95893-8a5de8fb\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"Emissions Explained: Understanding Scope 1, 2 and 3 in your business\" class=\"rbc-link-format\">Emissions Explained: Understanding Scope 1, 2 and 3 in your business<\/a><\/strong><\/p>\n\n\n\n<p>Any company interested in reducing their GHGs will want to understand the Corporate Standard, but taking on the work of identifying the many emissions you produce can be challenging. Your company may choose to bring on a third-party carbon accounting platform to help with the&nbsp;<a href=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/carbon-management-what-is-it-and-should-your-business-do-it\/\" data-dig-id=\"LP-95893-4e65225e\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"measurement, verification and ongoing management\" class=\"rbc-link-format\">measurement, verification and ongoing management<\/a>&nbsp;of carbon emissions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-understand-direct-and-indirect-emissions-in-your-business\">Understand direct and indirect emissions in your business<\/h2>\n\n\n\n<p>Most companies choose to focus on Scope 1 and Scope 2 emissions first, because they\u2019re the easiest to categorize and then reduce. Scope 1 emissions come from sources that your business has direct control over. This can include emissions from:<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Burning fuels in boilers, furnaces, and turbines<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Fuel used in company-owned vehicles<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Unintentional GHG leaks from refrigeration or air conditioning systems<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Chemical processing that happens in manufacturing facilities<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p>Scope 2 emissions are considered indirect as they\u2019re generated by the utility you purchase your energy from. Even though you\u2019re not creating these emissions, your business is responsible because you need them to run your business. These GHG emissions would include:<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Electricity used to heat or cool your facilities<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Energy used to light your buildings or run equipment<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Steam used in the manufacturing process<\/p>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-map-your-business-s-greenhouse-gas-emissions-sources\">Map your business\u2019s greenhouse gas emissions sources<\/h2>\n\n\n\n<p>Once you understand what constitutes Scope 1 and Scope 2 emissions, you can start mapping out the parts of your business that generate GHG emissions. The first step is to understand of all your emissions. Identify anything that falls into the Scope 1 emissions category, such as the fuels used in any production processes or the vehicles in your fleet. For Scope 2, you\u2019ll need to determine how your utility is generating electricity\u2014such as fossil fuels, natural gas, renewable sources\u2014and how much power you\u2019re using. There\u2019s an&nbsp;<a href=\"https:\/\/mccac.ca\/2021\/01\/25\/how-to-calculate-greenhouse-gas-emissions\/#:~:text=Calculation%20Method,that%20applies%20to%20your%20initiative.\" data-dig-id=\"LP-95893-94320bea\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"\u201cemission factors\u201d\" class=\"rbc-link-format\">\u201cemission factors\u201d<\/a>&nbsp;calculation that turns business activities into carbon-related numbers (higher GHG-emitting sources produce higher emission factors) to help you set a baseline to work from. This calculation is where a carbon accounting company could&nbsp;<a href=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/collecting-your-companys-carbon-data-with-insights-from-carbonhound\/\" data-dig-id=\"LP-95893-aa23deeb\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"help you crunch the numbers\" class=\"rbc-link-format\">help you crunch the numbers<\/a>.<\/p>\n\n\n\n<p>The inventory collection and GHG mapping process can take some time (the&nbsp;<a href=\"https:\/\/ghgprotocol.org\/sites\/default\/files\/Guidance_Handbook_2019_FINAL.pdf\" data-dig-id=\"LP-95893-86d10f4f\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"GHG Inventory Guidance guide\" class=\"rbc-link-format\">GHG Inventory Guidance guide<\/a>&nbsp;is a good resource to start with), but the hard work can pay off. In fact, multiple business opportunities can stem from identifying both Scope 1 and 2 GHG emissions. While nothing is guaranteed, some of the benefits can include:<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Lower energy costs through reduced energy usage<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Reduced fuel expenses by potentially switching to more energy-efficient vehicles<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Smaller refuse disposal costs through waste reduction<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Improved brand reputation and a potentially more positive public image<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Entrance into business with companies that require that suppliers report emissions<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Compliance with any industry or governmental regulations<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Potential competitive advantage over peers that aren\u2019t reducing emissions<\/p>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-identify-opportunities-and-risks-in-your-environmental-sustainability-plans\">Identify opportunities and risks in your environmental sustainability plans<\/h2>\n\n\n\n<p>Of course, there are risks associated with GHG reduction initiatives, too. Firstly, it can be expensive to replace heating and cooling systems or switch your fleet of internal combustion engine trucks to electric vehicles. You may need to spend money on new&nbsp;<a href=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/fueling-your-businesss-transition-to-renewable-energy-how-to-get-started\/\" data-dig-id=\"LP-95893-2fc56770\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"energy-efficient equipment\" class=\"rbc-link-format\">energy-efficient equipment<\/a>&nbsp;or on retrofitting a production facility or two, or invest in technologies that could become outdated as new emission-reducing innovations come to market. You may also need to hire new staff to measure and report findings or consider additional maintenance requirements on new systems.<\/p>\n\n\n\n<p>Of course, you don\u2019t have to do everything at once. You might consider taking a staged approach to GHG reduction, where you implement some changes now and more later once you better understand the approaches you\u2019d like to take, and the investments needed.<\/p>\n\n\n\n<p>While upfront costs can be substantial\u2014what you may have to invest varies significantly by industry and strategy\u2014it\u2019s important to consider the long-term return on investment and the business benefits that could compound over time. For instance, energy savings, more efficient processes, or new business opportunities balance could balance out any ongoing expenses.<\/p>\n\n\n\n<p><strong>Read more:&nbsp;<a href=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/finding-the-returns-on-commercial-building-retrofits\/\" data-dig-id=\"LP-95893-fe0f42ef\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"Finding the returns on energy-efficient commercial building retrofits\" class=\"rbc-link-format\">Finding the returns on energy-efficient commercial building retrofits<\/a><\/strong><\/p>\n\n\n\n<p>Businesses of all sizes will be under increasing scrutiny for their approach to environmental challenges, so now is the time to start taking the steps to better understand your Scope 1 and 2 emissions. Begin by learning more about the various scopes of emissions and then map out where your emissions are coming from. A third-party carbon accounting platform could help to make that work easier, and how you how to reduce GHGs. Consider planning out how you might fund upgrades, too, so you can get moving sooner than later.<\/p>\n\n\n\n<section class=\"wp-block-rbc-section-block  pos-rel\" style=\"border-radius:0px\">\n<div class=\"wp-block-rbc-section-inner-block inner-section-ocean section-inner  has-e-4-eeff-background-color has-background\" style=\"border-radius:0x\">\n<p><em>RBC\u2019s Sustainable Finance team has helped many clients on their emissions-reduction journey. To find out more about GHG mapping,&nbsp;<a href=\"https:\/\/www.rbcroyalbank.com\/business\/advice\/commercial-sustainable-finance-solutions.html\" data-dig-id=\"LP-95893-70d38f75\" data-dig-label=\"connect with a member of our team\" data-dig-action=\"link click\" data-dig-category=\"LP\" class=\"rbc-link-format\">connect with a member of our team<\/a>.<\/em><\/p>\n<\/div>\n<\/section>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-rbc-rbc-default-collapsible\"><p><button class=\"collapse-toggle collapsed\" data-target=\"#collapse834a1009\" data-toggle=\"collapse\" aria-expanded=\"false\" aria-controls=\"collapse834a1009\" data-dig-id=\"LP-57738-834a1009\" data-dig-category=\"LP\" data-dig-action=\"accordion closed\" action-closed=\"accordion closed\" action-opened=\"accordion open\" data-dig-label=\"Things our lawyers want you to know\"><span>Things our lawyers want you to know<\/span><span>Things our lawyers want you to know<\/span><\/button><\/p><div class=\"collapse-content collapse\" id=\"collapse834a1009\">\n<div class=\"wp-block-rbc-collapsible-inner-block collapse-inner\">\n<p>This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.<\/p>\n<\/div>\n<\/div><\/div>\n\n\n\n<p><\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":90,"featured_media":95894,"parent":57338,"menu_order":0,"template":"wp-custom-template-mmm-sticky-nav","meta":{"_acf_changed":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"tags":[574],"rbc_content_type":[31],"rbc_audience":[110],"rbc_lob_group":[35],"rbc_difficulty_level":[33],"rbc_mmm_category":[305,380,391,322,304,326],"class_list":["post-95893","rbc_my_money_matter","type-rbc_my_money_matter","status-publish","has-post-thumbnail","hentry","tag-commercial-insights","rbc_content_type-article","rbc_audience-business-owners","rbc_lob_group-business","rbc_difficulty_level-beginner","rbc_mmm_category-business","rbc_mmm_category-climate-change","rbc_mmm_category-commercial","rbc_mmm_category-economics-101","rbc_mmm_category-money-academy","rbc_mmm_category-right-sized-business-advice"],"acf":{"contently_publication_id":"","custom_author":"Royal Bank of Canada","rbc_video_header":"","rbc_media_duration":"","rbc_video_keywords":"","rbc_video_description":"","rbc_video_upload_date":"","rbc_toc_for_mmm_tag":"h2","rbc_toc_for_mmm_limit":6,"rbc_toc_for_mmm":null,"rbc_toc_for_mmm_action":"Generate Table Of Contents"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<meta name=\"description\" content=\"Businesses can use Scope 1 and 2 to categorize and reduce their greenhouse gas emissions, which can help to lower energy costs, improve brand reputation, and ensure compliance with regulations.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/ready-to-tackle-your-companys-environmental-sustainability-strategy-start-with-scope-1-and-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:description\" content=\"Businesses can use Scope 1 and 2 to categorize and reduce their greenhouse gas emissions, which can help to lower energy costs, improve brand reputation, and ensure compliance with regulations.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/ready-to-tackle-your-companys-environmental-sustainability-strategy-start-with-scope-1-and-2\/\" \/>\n<meta property=\"og:site_name\" content=\"RBC Royal Bank\" \/>\n<meta property=\"article:modified_time\" content=\"2025-11-05T15:05:19+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.rbcroyalbank.com\/en-ca\/wp-content\/uploads\/sites\/12\/2025\/10\/View-of-a-blue-sky-city-skyline-and-trees-through-a-glass-roof.jpg?quality=80\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"11 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/ready-to-tackle-your-companys-environmental-sustainability-strategy-start-with-scope-1-and-2\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/ready-to-tackle-your-companys-environmental-sustainability-strategy-start-with-scope-1-and-2\/\"},\"author\":{\"name\":\"Md Miraz Kabir\",\"@id\":\"https:\/\/www.rbcroyalbank.com\/en-ca\/#\/schema\/person\/3dd4d6b89786bef9ec09bb85220150a4\"},\"headline\":\"Ready to Tackle Your Company\u2019s Environmental Sustainability Strategy? 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