What Is ESG? A Plain-Language Guide for Companies in Qatar
ESG stands for environmental, social and governance. Learn what each part covers, why investors and customers care, and how companies in Qatar can start.
4 min read
A company’s carbon footprint is usually reported in three “scopes” defined by the Greenhouse Gas (GHG) Protocol, the most widely used accounting standard. Scope 1 covers direct emissions from sources the company owns or controls, Scope 2 covers indirect emissions from purchased energy, and Scope 3 covers all other indirect emissions in the value chain. Knowing the difference is the first step to measuring and reducing emissions.
The three scopes
| Scope | What it includes | Examples |
|---|---|---|
| Scope 1 | Direct emissions from owned or controlled sources | Fuel burned in company vehicles and generators, refrigerant leaks from air conditioning |
| Scope 2 | Indirect emissions from purchased energy | Electricity, and purchased steam, heating or cooling such as district cooling |
| Scope 3 | All other indirect emissions, upstream and downstream | Purchased goods and services, business travel, employee commuting, waste, use of sold products |
The GHG Protocol’s Corporate Value Chain (Scope 3) Standard divides Scope 3 into 15 categories. For many companies Scope 3 is the largest share of the footprint, but also the hardest to measure.
The 15 categories of Scope 3
| # | Category | Direction |
|---|---|---|
| 1 | Purchased goods and services | Upstream |
| 2 | Capital goods | Upstream |
| 3 | Fuel- and energy-related activities (not in Scope 1 or 2) | Upstream |
| 4 | Upstream transportation and distribution | Upstream |
| 5 | Waste generated in operations | Upstream |
| 6 | Business travel | Upstream |
| 7 | Employee commuting | Upstream |
| 8 | Upstream leased assets | Upstream |
| 9 | Downstream transportation and distribution | Downstream |
| 10 | Processing of sold products | Downstream |
| 11 | Use of sold products | Downstream |
| 12 | End-of-life treatment of sold products | Downstream |
| 13 | Downstream leased assets | Downstream |
| 14 | Franchises | Downstream |
| 15 | Investments | Downstream |
Most companies find that only a few categories make up the bulk of their Scope 3, so a screening exercise is the sensible first step.
Why it matters in Qatar
Qatar’s National Environment and Climate Change Strategy set a target to reduce greenhouse gas emissions by 25% by 2030. In a hot climate, cooling is a major energy use for buildings, so electricity and district cooling (Scope 2) are often significant for offices and retail. Refrigerant leaks from cooling systems (Scope 1) can also matter.
How to calculate your footprint
- Set boundaries: which entities and sites are included, and for which year.
- Collect activity data: fuel purchases, electricity and cooling bills, refrigerant top-ups, travel records, spend on goods and services.
- Apply emission factors: convert activity data into tonnes of CO2 equivalent (tCO2e) using recognized factors.
- Start with Scopes 1 and 2, which are under your direct control and easier to measure.
- Screen Scope 3: estimate which categories are largest, then improve data for those.
- Document methods and assumptions so results can be repeated and checked.
The basic emissions formula
The basic formula is the same for every source:
Emissions = activity data × emission factor
- Activity data is a measured quantity: litres of diesel, kilowatt-hours of electricity, kilograms of refrigerant, or money spent on a category.
- An emission factor converts that quantity into tonnes of CO2 equivalent. Use factors from recognized sources, such as your electricity or cooling provider, national data, or established international databases, and record which ones you used.
For example, a company’s Scope 2 for electricity is its annual kilowatt-hours multiplied by the grid emission factor for that year. Keeping activity data and factors in one documented spreadsheet makes the result auditable and easy to update.
Ways to reduce emissions
- Energy efficiency: cooling set-points, LED lighting, building management systems, maintenance.
- Fleet: route planning, efficient or electric vehicles where practical.
- Refrigerants: leak checks and lower-impact refrigerants.
- Renewable energy: on-site solar where feasible.
- Supply chain: work with key suppliers on their emissions; buy less and buy better.
- Travel: video meetings and travel policies.
Frequently asked questions
Do small businesses need to measure Scope 3?
Start with Scopes 1 and 2. Larger customers may later ask for your emissions, which become part of their Scope 3.
What is CO2 equivalent?
A common unit that converts different greenhouse gases into the amount of CO2 with the same warming effect.
Can we offset instead of reducing?
Offsets can play a limited role, but credible strategies prioritize reducing your own emissions first.
Prime Consulting helps organizations measure their footprint and build reduction plans. See our Sustainability & ESG service and What is ESG?.