Welcome to the first article in a series of three articles where we will closely examine the greenhouse gas emissions under the Greenhouse Gas (GHG) Protocol and identify what these mean for the global mobility industry.
What are the Scopes?
The Greenhouse Gas (GHG) Protocol, established in 2001, is a comprehensive framework that outlines both mandatory requirements and advisory guidelines. The GHG standards provide a framework for businesses, governments and other entities to measure and report their greenhouse gas emissions.
The GHG Protocol divides greenhouse gas emissions into three categories or "scopes" to help organizations systematically measure and manage their carbon footprint. Scope 1, 2, and 3 emissions are greenhouse gases released across an organization’s entirevalue chain.
In 2023, 96% of Fortune 500 companies responded to the Carbon Disclosure Project (CDP) using the GHG Protocol directly or indirectly. The GHG Protocol provides the accounting platform for every corporate GHG reporting program globally.
Scope 1 covers direct emissions from sources that a company owns or controls, such as vehicle fleets, facility heating, and on-site manufacturing. Scope 2 encompasses indirect emissions from purchased energy, including electricity, steam, heating, and cooling used by the organization. Scope 3, typically the largest category, includes all other indirect emissions throughout a company's value chain, from business travel and employee commuting to producing purchased goods and disposing of sold products.
Together, these three scopes provide a comprehensive framework for organizations to understand and address their total environmental impact. Understanding greenhouse gas (GHG) emissions is also key to effective environmental management across the mobility industry and each organisation faces unique challenges in measuring and managing its carbon footprint.
Source: WRI/WBCSD Corporate Value Chain (Scope 3) Accounting and Reporting Standard (PDF), page 5.
Scope 1 Emissions in the Mobility Industry
Scope 1 emissions are a company's direct carbon footprint. Scope 1 refers to direct GHG emissions from sources that a company owns or controls. These emissions are created directly by a business. In the mobility industry, Scope 1 emissions typically come from:
- Moving trucks
- The heating and cooling systems in offices or facilities owned directly by the company
- Backup generators
The Business Case for Measuring Scope 1 Emissions
- · Major corporations operating in the EU and other jurisdictions must now report their emissions data, affecting international moving companies and relocation service providers operating in these regions and beyond through the supply chain.
- · Banks and investors evaluate carbon performance when considering loans for fleet expansion or new facilities, making emissions data critical for growth planning and financing.
- · Tracking emissions directly connects to fuel usage, helping identify cost-saving opportunities through route optimization and timely vehicle maintenance. This is particularly relevant for all types of relocations.
- · Global corporations and relocation management companies increasingly require emissions data in their RFPs. Moving companies with clear carbon measurement systems have an advantage in winning new business.
- · Companies measuring and managing their emissions position themselves favourably for future market requirements, particularly in regions with stricter environmental regulations around expatriate services.
Implementing Scope 1 Emissions Measurement
- Professional transportation companies, the most likely stakeholders in global mobility to have Scope 1 emissions, must start with comprehensive tracking across two main areas: fleet and facilities. This means calculating and documenting fuel consumption for each vehicle type and applying appropriate emission factors for fleet management. Facility tracking covers natural gas usage: Heating, Ventilation, and Air Conditioning (HVAC) system refrigerants, and emergency power systems.
- At its simplest level, the calculation follows a straightforward formula: Emissions = Activity Data × Emissions Factor. This allows companies to convert operational data into actionable emissions insights and implement targeted reduction strategies based on this data.
The Path Forward
Effective Scope 1 emissions management requires a comprehensive approach that combines technological solutions with operational changes. Organisations should focus on establishing robust measurement systems, implementing targeted reduction strategies, and regularly monitoring progress. Success in emissions reduction often correlates with improved operational efficiency and a stronger market position. As the mobility industry evolves, companies that proactively manage their emissions will be better positioned for long-term success, especially as stringent EU regulations and supply chain requirements become more important to large corporates.
The future of emissions management in Asia’s mobility industry will likely see supply chain decarbonisation playing a key role, particularly in major hubs like Singapore, Hong Kong, and Tokyo, where regulatory pressures are growing. Most recently, The Philippines has announced it will implement mandatory sustainability reporting for listed firms by 2026, following a market readiness study and a transitional approach by the Securities and Exchange Commission (SEC).
Where applicable to their business activities, companies proactively implementing emissions management programs will be better positioned to comply with evolving regulations and meet rising client expectations for greener mobility solutions.
Further Reading
McKinsey & Company. (2024, September 17). What are Scope 1, 2, and 3 emissions? https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-are-scope-1-2-and-3-emissions
World Resources Institute and World Business Council for Sustainable Development. (2004). The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition). Available at: https://ghgprotocol.org/corporate-standard
