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07 November 2024 / Quick Take
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Copy LinkUS public companies have made notable strides in reducing greenhouse gas emissions within their direct operations. From 2021 to 2024, median scope 1 emissions for the Russell 3000 decreased by 48%, location-based scope 2 emissions dropped 61%, and market-based scope 2 emissions decreased by 69%. In the S&P 500, the reductions were smaller, with scope 1 emissions unchanged, but location-based scope 2 down by 25% and market-based scope 2 by 47%.
Greenhouse gas (GHG) emission scopes:
Scope 1: Direct emissions from sources owned or controlled by the company.
Scope 2: Indirect emissions from purchased energy, reported as either location-based (grid average) or market-based (reflecting specific energy choices).
Scope 3: Indirect emissions across the value chain, including both upstream and downstream activities.
While companies have stabilized or reduced scope 1 and 2 emissions, scope 3 remains a major challenge. For the median Russell 3000 company, scope 3 emissions are nearly four times the combined scope 1 and 2 emissions; scope 3 emissions are eight times higher for the median S&P 500 company. With growing pressure from stakeholders and new regulations—such as the EU’s
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