Understanding Scope 1, 2, 3, and 4 Emissions in IT Asset Disposition

Image Source: ESG Professionals Network

If your company participates in carbon emissions reporting, like that often found in a company's Sustainability or ESG reports, you might already be familiar with Scope 1, 2, and 3 emissions. However, there's also Scope 4, which is equally important but less commonly discussed. Let's break down what each of these entails and if and how each of them relates or doesn’t relate to IT asset disposition (ITAD).

What Are Scope 1,2,3, and 4 Emissions?

Scope 1 Carbon Emissions

These are direct greenhouse gas (GHG) releases from sources that your company owns or controls. Greenhouse gases include carbon dioxide, methane, nitrous oxides, and other gases in our atmosphere that trap heat at the surface and make our planet warmer than it would otherwise be. Direct Scope 1 emissions include GHG released from burning fuel in fleet vehicles or direct releases from manufacturing processes. Essentially, any GHG that your company directly generates falls under this category. In terms of IT assets, this category would only apply if your company were a manufacturer of IT, which excludes most of us.

Scope 2 Carbon Emissions

These are indirect GHG emissions from the consumption of purchased energy. This includes GHG released from the generation of electricity that we use to power our lights, heat and cool buildings, and operate IT devices. While these emissions are not produced directly by your company, they are a result of your energy consumption and can mostly be read directly off your utility bills. In terms of IT, this only relates to the energy you use while operating your IT or any energy you use directly at your company in your disposition process. We do not need to account for this separately in terms of our IT assets, because it is already considered in our energy use.

Scope 3 Carbon Emissions

These ones are the most comprehensive and challenging to track, but usually account for the majority of a company's total GHG production. They encompass all indirect emissions up and down the value chain, including activities like business travel, employee commuting, technology purchases, shipping, and waste generated in operations.

This category is also relevant to IT and ITAD. For example, when your company buys new electronics, the GHG from manufacturing those assets and shipping them to you are part of this category. Similarly, when you initiate ITAD at the end of their life cycle in your company, whether responsibly recycled, incinerated, landfilled, or reused, the GHG produced during their transportation and processing falls under this category as part of your waste operations.

Scope 4 Avoided Emissions

This is a new category that is often called "avoided emissions" and represents source reductions that occur due to how a product is used. These might include new devices with more efficient batteries that require less frequent charging or the shift to remote work, which reduces the need for daily commuting. It also includes the amount of GHG releases that are avoided when we reuse our old technology, considered a source reduction, instead of landfilling or recycling it.

These reductions are challenging to measure and are sometimes controversial when misused, like when companies try to deduct them from Scope 3, which cannot be done, or it will open you up to charges of greenwashing. However, they are increasingly being reported in a separate category to help demonstrate a company's commitment to reducing its overall carbon footprint up and down the value chain.

The Role of ITAD in Carbon Emissions Reduction

So, how does all this relate to IT asset disposition (ITAD)? Proper ITAD practices can significantly impact your company's GHG reporting in the following ways:

• Scope 3: When electronics are reused, incinerated, or landfilled, the GHG produced in their transportation or processing are reported in this category as part of your waste operations. The amount of positive emissions here is small, but not insignificant.
• Scope 4: Reusing electronics significantly increases the value of your avoided emissions. By extending the life of existing devices, there's less demand for new products so this significantly reduces GHG produced in manufacturing and transportation. This contributes to Scope 4 reductions and supports a circular economy. Even recycling has only a small net negative avoided emissions (-0.837 metric tonnes of CO2e per short ton of electronics) compared to reuse (-18.57 metric tonnes of CO2e per short ton of electronics). This is why reuse is always the best option. Chart

Image of Carbon Emissions vs Avoided Emissions from Source Reductions Like Reuse. Data from the US EPA.

Turning ITAD into a Profit Center

In addition to reducing GHG, a well-managed ITAD process can transform from a cost burden into a profit center. By refurbishing and remarketing old assets, companies can recover the value that can completely offset the cost of ITAD and may even result in a cash-positive transaction that they can reinvest into their IT budget. This is a triple win that simultaneously promotes positive environmental, social, and financial outcomes.

Case Study 1: ICT worked with a major medical company to handle their ITAD, resulting in Scope 4 Avoided Emissions from recycling of -5,168 kg CO2e, -219,775 kg CO2e from reuse, and a small net positive release of 3,613 kg CO2e from transportation for an overall net project emissions of -227,410 kg CO2e! What an impressive positive impact!

Case Study 2: ICT worked with a major pharmaceutical company, offering them the best terms and the highest price for their retired laptops. To date, cooperation with Mission Reuse has earned that company $40,000 in positive cash flow while significantly contributing to avoided emissions and a circular economy.

Final Thoughts

Understanding and managing Scope 1, 2, 3, and 4 emissions is crucial for comprehensive Sustainability or ESG reporting. Effective ITAD practices can play a significant role in reducing GHG, particularly when they focus on reuse over recycling or disposal. By integrating responsible ITAD processes, companies can not only reduce their carbon footprint but also create financial benefits, contributing to both environmental sustainability and corporate profitability.

Find Out How We Can Help

If you are an enterprise, government, or institution looking for ITAD solutions or have additional questions, please contact us at ICT. You can also view our white paper on Going Beyond E-Recycling: How Smart ITAD Avoids Up to 28 Times More CO2 Emissions for more information on this critical topic.

Selected References

ICT About ICT (n.d.) ICT About Company Page. Retrieved February 2, 2024, from https://ictcompany.com/

ICT Mission Reuse (n.d.) ICT Mission Reuse. Retrieved February 2, 2024, https://mission-reuse.com/

Read, S., & Shine, I. (2022, September 20). We know Scope 1, 2 and 3 emissions. But what are Scope 4? World Economic Forum. https://www.weforum.org/stories/2022/09/scope-4-emissions-climate-greenhouse-business/

‌‌United States Environmental Protection Agency. (2024). Overview of greenhouse gases. US EPA. https://www.epa.gov/ghgemissions/overview-greenhouse-gases

US EPA WARM (2019) Documentation for Greenhouse Gas Emission and Energy Factors Used in the Waste Reduction Model (WARM) Electronics. US Environmental Protection Agency. https://www.epa.gov/sites/default/files/2019-06/documents/warm_v15_electronics.pdf

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