Scope 1 and 2 Reduction Strategies for Office-Based Private Companies

Jul 2

You've finished your first GHG inventory, so you know your Scope 1 and 2 numbers. The next question is usually what to do about them.

For most office-based private companies, this part is more straightforward than people expect. The levers are well understood, the data is easy to track, and you don't need a sprawling supply chain initiative to make real progress.

Here's how I walk clients through it after a completed GHG inventory.

Scope 1 is usually small. Confirm that, then move on.

For an office-based company, Scope 1 covers what you directly control: natural gas for heating, fuel in any company vehicles, refrigerants in HVAC or kitchen equipment.

If you lease your space and don't run a vehicle fleet, this number is often close to zero. That's common and it's fine. There's no need to build a reduction strategy around emissions you barely have. Confirm it's small relative to Scope 2, note it, and move on.

If you do have some Scope 1 emissions, like one or two company vehicles, the fix is usually simple. Transition to electric or hybrid as you replace vehicles, and keep HVAC systems properly maintained so refrigerants aren't leaking.

Scope 2 is where the real work happens

Electricity is the dominant emissions source for most office-based companies. It's also where you have the most control and the clearest path forward.

One thing worth understanding before you go further: the GHG Protocol requires Scope 2 to be reported two ways. The location-based method reflects the average emissions of your local grid. The market-based method reflects the actual contracts and certificates you've purchased, like RECs or a green power agreement. This matters because not every reduction lever moves both numbers. Cutting your electricity usage reduces both. Buying RECs only moves your market-based number. Your location-based footprint stays tied to the grid you're on, regardless of what you've purchased.

With that in mind, there are two ways to reduce your footprint: use less electricity, or source cleaner electricity. A credible plan does both.

Reducing usage

This is the right place to start, before spending anything on clean energy purchasing. It's also the one lever that improves both your location-based and market-based numbers.

Lighting is usually the first place to look. LED retrofits are inexpensive, quick to install, and the impact shows up on your utility bill almost immediately. If your office still runs on fluorescents, this is the easiest win available to you.

HVAC comes next. Programmable thermostats, regular maintenance, and sealing inefficiencies in older buildings can meaningfully cut energy use without much capital investment.

If you have any influence over office design, smaller changes matter too, like maximizing natural light or upgrading to energy-efficient equipment. These are incremental, but they add up over time.

Sourcing cleaner energy

Once usage is reduced, the next lever is where your electricity actually comes from. This affects your market-based number only.

Most private companies start with Renewable Energy Certificates, or RECs. Each REC certifies that one megawatt-hour of electricity was generated from a renewable source. Purchasing RECs equal to your usage lets you claim that usage as renewable under the market-based method, regardless of what's actually powering your building.

RECs are a reasonable starting point and relatively inexpensive to purchase. But not all RECs carry the same weight. An unbundled REC from an older renewable project mostly reshuffles existing renewable attributes rather than driving new clean energy onto the grid. A longer-term contract tied to a newer or planned project has a stronger claim to real impact. If you go the REC route, document the source and make sure the certificates are Green-e certified or equivalent.

One more thing to confirm: RECs have to be sourced from the same market as your actual electricity use. A US-based office can't credibly apply RECs purchased from a European wind farm. This requirement is also under review, and proposed updates to the GHG Protocol's guidance could tighten it further in the next few years, so it's worth keeping an eye on if RECs are a meaningful part of your strategy.

A stronger option, where available, is a green power purchase or power purchase agreement directly through your utility or a supplier. This ties your electricity use to a specific, often newer source of renewable generation, and it's much easier to explain when a GP or customer starts asking pointed questions about additionality.

What if you don't control the building?

This is the most common obstacle I run into. If you lease your space, you don't control the HVAC system, the lighting infrastructure, or the building's energy source. Your landlord does.

A few ways to work around this. Ask your landlord directly about the building's energy efficiency and whether they offer any sustainability reporting. Many commercial landlords already track this and can share the data with you. Focus your own reduction efforts on what you do control: equipment, lighting, and employee behavior like powering things down overnight. RECs can also help cover the portion of your footprint tied to building-level electricity you can't directly influence, though as above, they only move your market-based number.

None of this needs to be perfect. A GP or customer asking about your reduction plan wants to see that you understand your footprint and have a credible plan in place, not that every constraint has been solved.

What a credible reduction plan includes

When I help a client build this out, the plan usually includes a few core pieces.

A target: a percentage reduction in emissions intensity or absolute emissions, measured against your baseline year, by a specific date. This doesn't need to be a formal Science-Based Target to be credible, though some clients eventually move in that direction.

A timeline: which initiatives happen in year one, and which are longer term. LED retrofits and REC purchases can typically happen quickly, while larger infrastructure or lease-related changes take more time.

A tracking method: how you'll measure progress year over year, using the same methodology as your baseline, so the numbers stay genuinely comparable. This includes tracking both location-based and market-based Scope 2 figures, since GPs and customers increasingly expect to see both.

A way to communicate it: a concise summary you can share with a GP, board, or customer that explains what's been done and what's next, without burying them in detail.

When this gets more complex

If you have multiple office locations, or a mix of owned and leased space, the same principles apply, but the data collection gets more demanding. You're now tracking utility bills and lease terms across locations, and your reduction strategy may need to vary building by building.

The starting point stays the same: get clear on what you control versus what your landlords control, and build your plan around that distinction.

Where to start

If you have your baseline and you're working out what to do about your Scope 2 number, start with the lower-cost wins: lighting, HVAC maintenance, employee behavior. Then layer in RECs or a green power purchase once usage has been reduced as much as practical.

This doesn't need to be complicated to be credible. It needs to be accurate, well documented, and moving in the right direction.

If you want to talk through what this would look like for your company, get in touch or learn more about consulting services like fractional ESG support and a carbon footprint.

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