When you receive an ESG questionnaire from a customer, bank or insurer, you will soon encounter the terms scope 1 and scope 2. For a metals or manufacturing company, these are the two categories that almost always belong in the dossier: the fuel you burn yourself (scope 1) and the electricity you purchase (scope 2). Both can be traced from documents you probably already have, such as the energy bill and fuel receipts, and thus form the part of the questionnaire that is quickest to complete.
More difficult to place: where does the steel sheet or aluminium profile come from, and does it count towards scope 1 or 2? That is a question that belongs to the value chain, also called scope 3, and not to the two categories that are the focus of this article. Below you will see which figures for scope 1 and 2 do come from you, and why the origin of raw materials is separate from it.
What falls under scope 1 in a metal company
Scope 1 covers combustion that takes place on your own site or in your own vehicles. For a metal processing company, this usually means natural gas for furnaces and heat treatment, propane or acetylene for cutting and welding, and diesel or petrol for your own vehicle fleet and forklifts. The figures themselves are on the gas bill, on the fuel receipts from your own fuel card and on the invoices from your gas supplier for tanks on the premises.
This specifically concerns what you burn. Fuel consumed by a subcontractor or transporter does not fall under this, even if that lorry is carrying your products. This distinction may seem a detail, but it does determine which document you need: your own fuel receipts, not those of a supplier.
What falls under scope 2 in a metal company
Scope 2 is the electricity you purchase from your energy supplier. In a metal company, this consumption is usually concentrated in a few processes: welding, punching and pressing, CNC machining, compressors for compressed air, and lighting and heating of the workshop. The energy bill shows the total consumption in kilowatt-hours; this figure is the basis on which scope 2 is calculated.
If you have solar panels or a purchase contract for green electricity, this changes the way consumption is converted into emissions, but not the fact that it falls under scope 2. Again, this concerns consumption on your own connection, not the electricity that a supplier uses to process your raw material.
Energy-intensive processes: where the figures come from
With smelting, casting and heat treatment, energy consumption usually rises faster than with assembly or assemblage, and you will notice this in both the gas bill and the electricity bill. For scope 1 and 2, this difference makes little practical difference: the source remains the same bill, only the volume is higher. If you have multiple premises or production lines, it is wise to check per connection which consumption belongs to which process, especially if part of the premises is rented out or shared with another company.
For companies that are uncertain which installations count and which do not, it is useful to first check which categories are exactly required according to the voluntary standard for non-listed SMEs. On the page with topics per situation is set out per type of company.
The origin of raw materials: asked for, but not scope 1 or 2
A customer asking about the origin of steel or aluminium is essentially asking about the value chain: the emissions that occurred before the material arrived at your premises. This falls under scope 3, a category that can vary significantly from company to company and from questionnaire to questionnaire in terms of what can legitimately be requested. It is therefore not part of the two categories covered in this article, even though the question feels related because it appears in the same questionnaire.
This distinction is more than a matter of definition: it determines whether you can answer the question using your own energy bill, or whether you first need to check with a supplier what they deliver. If you are uncertain whether a question about raw material origin falls within the boundaries of what may be requested, you can verify this before spending time gathering data you may not need to provide.
Where the emission factors come from
To convert litres of diesel or kilowatt-hours of electricity into a CO2 figure, an emission factor is needed: an established figure with a reference date that indicates how much emissions correspond to a particular quantity of fuel or electricity. These factors are established and published periodically; which factor applies depends on the year in which the consumption took place. On the page on how the information is developed you can see which sources esgia draws these factors from and how the reference date is maintained.
Research once, reuse afterwards
The energy bills and fuel receipts you need for scope 1 and 2 typically remain the same type of document year after year in most companies. Once this has been established, the next questionnaire is mainly a matter of checking whether anything has changed, rather than gathering everything from scratch again. Questions that fall outside this scope, such as those about the origin of raw materials, warrant separate consideration before you answer them.
To see in a few questions which figures are already within reach for your company, do the free quick-scan with a direct indication. If you are still uncertain about what does and does not fall under scope 1 and 2 for your specific situation, you will find more examples at the frequently asked questions page.