As an Australian business, you're hearing more and more about "emissions." You may even be in one of the groups (1, 2 or 3) that need to report on their climate risks now, or shortly in the furture. But understanding terms like "Scope 1, 2, and 3 emissions" can feel like learning a new language. It's often unclear why these terms matter to your business.

Don't worry. This isn't just for big corporations. Understanding your emissions, especially Scope 2, is becoming important for businesses of all sizes. Why? Because you may be in one of the groups that need to report on their emissions shortly in the future.

Let's break down Scope 2 emissions simply. We'll explain what they are, why they matter to your Australian business, and how you can manage them effectively with Termina.

What are Scope 2 Emissions?

The Greenhouse Gas (GHG) Protocol defines three "scopes" of emissions to help businesses categorise their environmental impact:

• Scope 1 Emissions: These are direct emissions from sources your business owns or controls. Think of fuel burned in your company vehicles or on-site generators.
• Scope 3 Emissions: These are all other indirect emissions from your value chain. This includes things like emissions from your suppliers making their products, employee commutes, or the disposal of your products. It's often the hardest to track.
• Scope 2 Emissions: These are the focus here. They are indirect emissions from the generation of purchased electricity, steam, heating, and cooling that your business consumes. Even though the emissions happen at the power plant, they are counted against your business because you are using the energy.

In simple terms, if you pay an electricity bill, you have Scope 2 emissions.

Why Do Scope 2 Emissions Matter to Your Australian business?

You might think, "I'm a small business. Why should I care about this?" Here's why it's important for you:

• Cost Control: Energy consumption directly links to Scope 2 emissions. If you reduce your energy use, you reduce your Scope 2 emissions. More importantly, you cut your energy bills. This is a clear financial win for your business.
• Customer and Investor Expectations: More and more customers want to buy from sustainable businesses. Investors also look at a company's environmental impact. Being able to show you manage your Scope 2 emissions builds trust and reputation.
• Supply Chain Pressure: Larger businesses you might supply to are already tracking their Scope 3 emissions. This includes emissions from their supply chain, which means your Scope 1 and Scope 2 emissions. They might start asking you for your data. Being ready can secure business opportunities.
• Future Regulations: While mandatory reporting currently targets larger entities, the trend is clear. From 2027 all businesses with $25M or more in assets or over 100 employees will be required to report on their emissions in Australia.
• Sustainability Goals: Many businesses want to be more sustainable. Tracking Scope 2 emissions is a clear, measurable way to show progress towards those goals.

Practical Steps to Manage Your Scope 2 Emissions with Termina

Managing Scope 2 emissions isn't complicated when you have the right approach and tools. Termina helps you with this.

1. Get Your Energy Data in Order with Termina

You can't manage what you don't measure. The first step is to get clear, accurate data on your energy consumption.

• Centralised Data Collection: This is crucial, especially for multisite energy businesses. Termina helps you consolidate energy accounts from all your locations into one system. This gives you a single, clear view of all your purchased electricity and gas.
• Automated Bill Reading: Manual data entry for dozens or hundreds of energy bills is time-consuming and error-prone. Termina’s energy bill reading software automates this. It accurately extracts consumption data, so you have reliable information for your Scope 2 calculations. This is a key part of effective Energy Data Management and Utility Bill Management.
• Understand Your Usage Patterns: Termina's tools show you when you use energy. This helps you identify peak consumption times. This data is essential for finding reduction opportunities and informing energy procurement strategies.

2. Implement Reduction Strategies

Once you know your baseline, you can act.

• Energy Efficiency: The most direct way to cut Scope 2 emissions is to use less energy. This includes upgrading to LED lighting, optimising HVAC systems, or making sure equipment is turned off when not in use. Termina's Energy Data Management can help pinpoint areas of high consumption, guiding your Facilities Management team. You can link this to your asset register for targeted improvements.
• Switch to Renewables: Consider sourcing renewable energy. This could be through a green energy retailer, or through Termina by sourcing renewable plans.
• Demand Management: If your contracts have demand charges, managing your peak demand can significantly cut costs and emissions. Termina's insights can show you when your peaks occur, allowing you to shift some operations to off-peak hours.

3. Leverage Termina as Your Strategic Partner

You don't have to do this alone. Termina provides the expertise and tools.

• Reporting Support: While many businesses aren't yet mandated to report yet, having the data ready is smart. Termina’s robust Energy Data Management platform provides the accurate consumption data needed for any future Scope 2 reporting. The best part is it’s included when paired with Termina’s procurement.
• Procurement for Green Energy: If you want to switch to renewable energy, Termina, as your energy broker, can help you find suitable green energy contracts. We negotiate on your behalf to get the best terms for your energy procurement.
• Continuous Optimisation: Termina provides ongoing energy management and utility management support. We help you monitor your progress, identify new savings opportunities, and stay agile in a changing market. All while having Termina’s utility management platform included for free.

Understanding and managing your Scope 2 emissions is a practical step for your Australian business. It's a way to cut costs, improve your reputation, and prepare your business for the future. With Termina, you get the tools and expertise to make this process clear, efficient, and beneficial for your bottom line and the planet.

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