Scope 1, 2, and 3 emissions, explained

Greenhouse gas emissions are classified into three scopes: scope 1, scope 2, and scope 3. These scopes are determined by where the emissions originate from. Scope 1 covers direct emissions that a company generates while performing its business activities, whereas scope 2 covers indirect emissions from purchased energy, and scope 3 covers indirect emissions in the value chain.  

For most companies, the value chain is responsible for the vast majority of emissions, often around 90%. This makes it absolutely vital to include scope 3 when calculating your carbon footprint. 

The terminology of scope 1, 2, and 3 was introduced in the Greenhouse Gas Protocol (GHG Protocol), which sets the standards for calculating GHG emissions all around the world. Virtually every corporate sustainability reporting program in the world is based on the GHG Protocol, making it crucial to understand the framework. 

Scope 1

Scope 1 emissions are direct GHG emissions that a company generates while performing its business activities. This includes:

• Generation of electricity, heat, or steam. 
• Manufacture or processing of chemicals and materials, as well as waste processing.
• Transportation of materials, products, and waste using vehicles owned or controlled by the company.
• Fugitive emissions, such as equipment leaks of gases or vapors from pressure-containing equipment. 

How to calculate scope 1 emissions

Best approach:
Direct measurement of GHG emissions by monitoring concentration and flow rate.

Alternative approach: 
Calculated based on the purchased quantities of commercial fuels and emissions factors.

Scope 2

Scope 2 emissions are the indirect emissions generated by the production of purchased energy. This includes: 

• Purchased electricity
• Purchased heating
• Purchased cooling

How to calculate scope 2 emissions

Best approach:
Calculated from metered electricity consumption and supplier-specific emissions factor.

Alternative approach: 
Local grid or other more general emissions factors can be used to calculate emissions starting from metered electricity or electricity bills.

Scope 3

Scope 3 emissions are all other indirect emissions that occur in the value chain of a company and are not already included within scope 2. These emissions are a consequence of the company’s business activities but occur from sources the company does not own or control. They account for approximately 88% of an average company’s emissions. Scope 3 emissions include the following:

• Emissions generated in the company’s supply chain, such as extraction, production, and transportation of purchased materials and fuels. 
• Emissions generated from the use of sold products and services.
• Emissions generated from waste disposal. This includes the disposal of waste generated both in operations and in the production of purchased materials and fuels, as well as disposal of sold products at the end of their life.  

How to calculate scope 3 emissions

Best approach:
Primarily calculated from activity data such as fuel use or passenger miles, as well as published or third-party emissions factors. In most cases, if source- or facility-specific emissions factors are available, they are preferable to more generic or general emissions factors.

Alternative approach: 
For smaller scope 3 emissions contributors, a transaction-based method with general emissions factors can be used to reduce costs and complexity without overly compromising quality.

Emissions sources and scopes, visualized

Why calculate your scope 1, 2, and 3 emissions?

The world’s top-performing companies are committing to net zero: to reduce their emissions as much as possible, and then compensate any remainder with high-quality climate investment.

To reach net zero, the first step is to measure all of your emissions – scope 1, 2, and 3.