Scope 1, 2 and 3 emissions are the three categories used to sort an organisation’s greenhouse gas emissions: direct emissions it controls, indirect emissions from the energy it buys, and every other emission across its value chain.
The categories are a core part of organisational reporting, and they sit within the wider topic of what is a carbon footprint, which explains how footprints are built for people, households and businesses.
Why emissions are split into scopes
An organisation’s emissions do not all arise in the same place. Some come from a chimney or exhaust pipe it owns. Some come from a power station that supplies it with electricity. Many come from suppliers, customers and employees who are legally separate from it. Without a shared way to sort these, two organisations could report very different numbers for the same activity, or count the same tonne of gas in both reports.
The scope system solves that by assigning each emission source to a category according to who controls it and how it is connected to the reporting organisation. The system comes from the GHG Protocol, whose Corporate Standard provides requirements and guidance for companies and other organizations preparing a GHG emissions inventory. Its stated purpose is to help companies prepare an inventory that represents a true and fair account of their emissions through standardized approaches and principles.
Scopes also make progress easier to read. A company that moves from fuel oil to an electric heat pump, for instance, reduces its direct emissions but may increase its emissions from purchased electricity, and the net result depends on how the electricity is generated. Reporting the scopes separately makes that trade-off visible instead of hiding it inside a single total.
Scope 1: direct emissions
The U.S. Environmental Protection Agency defines the first category in its scope 1 and scope 2 inventory guidance: scope 1 emissions are direct greenhouse gas emissions that occur from sources that are controlled or owned by an organization, for example emissions associated with fuel combustion in boilers, furnaces and vehicles.
In practice, scope 1 usually includes a few recurring groups of sources. The EPA’s guidance lists separate calculation tools for several of them:
- Stationary combustion. Fuel burned at a site for heat, power or process energy, covered in the EPA’s tool on direct emissions from stationary combustion.
- Mobile combustion. Fuel burned in vehicles and equipment the organisation owns or operates, covered by the EPA’s tool on direct emissions from mobile combustion sources.
- Fugitive emissions. Leaks from refrigeration, air conditioning, fire suppression and industrial gases, which the EPA covers in its tool on direct fugitive emissions.
Process emissions, such as those from chemical reactions in industrial production, also fall under scope 1 when the organisation operates the process. The common thread is control: if the organisation owns or operates the source, the emissions are direct, whether or not the organisation is the one that benefits from the output.
Scope 1 tends to be the easiest category to measure because the activity data are close at hand. Fuel purchase records, meter readings and refrigerant top-up logs provide most of what is needed, and emission factors for common fuels are published by national agencies.
Scope 2: purchased energy
The same EPA guidance defines scope 2 emissions as indirect emissions associated with the purchase of electricity, steam, heat, or cooling. It adds a clarification that is easy to miss: although scope 2 emissions physically occur at the facility where they are generated, they are accounted for in an organization’s inventory because they are a result of that organization’s energy use.
In other words, an office that runs entirely on electricity has no fuel burned on site, and so almost no direct emissions from heating, but it still has indirect emissions because the power it uses was generated somewhere. The EPA publishes a separate tool on indirect emissions from purchased electricity for this category.
The GHG Protocol’s Scope 2 Guidance adds rules for contracts and energy purchasing. It sets requirements for accounting for emissions from energy contracts and instruments, such as renewable energy credits, and Eight Scope 2 Quality Criteria that all contractual instruments must meet to be a reliable data source for the scope 2 market-based method. It also recommends transparent disclosure of information about energy purchases.
The result is that a scope 2 figure can be reported in more than one way. A location-based figure reflects the average mix of the local grid, while a market-based figure reflects the contracts the organisation has chosen. Both are meaningful, but they answer different questions, and a reader should check which one is being quoted.
Scope 3: the rest of the value chain
Scope 3 is everything else. The GHG Protocol’s Corporate Value Chain (Scope 3) Standard says that most companies had long focused on measuring emissions from their own operations and electricity consumption, while the majority of total corporate emissions come from Scope 3 sources. The standard allows companies to assess their entire value chain emissions impact and identify where to focus reduction activities.
It covers 15 categories of Scope 3 activities, both upstream and downstream of a company’s operations. Upstream categories include the goods and services it buys, the capital goods it acquires, and the transport of materials to its sites. Downstream categories include the transport and distribution of its products, the use of sold products, and their end-of-life treatment. Other categories cover business travel, employee commuting and leased assets.
The standard was released in 2011 and was developed through a multi-stakeholder process involving 2,300 participants from 55 countries. The GHG Protocol describes it as the only internationally accepted method for companies to account for these types of value chain emissions.
Scope 3 is the hardest category to measure. The data sit with other businesses, and the organisation often has to rely on supplier information, spend-based estimates or industry averages. The result is more uncertain than the direct and purchased-energy categories, which is why the quality of the method and the data should be stated alongside any value chain figure.
Using scope numbers carefully
Reported scope figures are often compared, and that is where mistakes creep in. The Scope 3 standard’s own FAQ states that it is designed to enable comparisons of an individual company’s GHG emissions over time, and that it is not designed to support comparisons between companies. Differences in reported emissions may be a result of differences in inventory methodology, company size or structure. Additional measures, such as consistent methods and data and the reporting of intensity ratios, are needed for valid comparisons.
Several practical points follow:
- Check the boundary. A company may choose to include only some scope 3 categories, so a low total may only mean fewer categories were counted.
- Check the method. Spend-based estimates and supplier-specific data give different levels of precision, and both can appear under the same label.
- Follow the trend, not just the level. Because the standard is built for comparison over time, a change within one company’s own reports is usually more informative than a ranking against another company.
- Avoid double counting when adding up. One organisation’s scope 3 is another’s scope 1 or 2, so totals across a supply chain need care.
Scope figures also feed public statements. A company that publishes climate claims should make sure that the wording matches what was measured, and should check the advertising and consumer rules where it operates. Claims that blur scopes, or that quietly leave out the largest category, are among the patterns described in the guide to what is greenwashing.
The scope framework is one part of a larger methodology. For how the standards fit together, including the corporate standard, scope guidance, and the product standard, see the article on the greenhouse gas protocol.
Frequently asked questions
What is the difference between scope 1 and scope 2?
Scope 1 covers direct emissions from sources an organisation owns or controls, such as boilers and vehicles. Scope 2 covers indirect emissions from the electricity, steam, heat or cooling it buys, which are released where that energy is generated.
Why is scope 3 usually the largest?
It includes everything outside the organisation’s own sites and energy purchases, including suppliers, product use and disposal. The GHG Protocol states that the majority of total corporate emissions come from Scope 3 sources.
Do all organisations have to report all three scopes?
Not necessarily. Requirements depend on the jurisdiction, the reporting framework and the size of the organisation, so the rules that apply to a given business should be checked where it operates.
Can scope figures be used to compare companies?
Only with care. The Scope 3 standard says it is not designed to support comparisons between companies, because methods, size and structure differ.
