What is Scope 1, 2 & 3?
Understanding the three emission scopes is the foundation of corporate carbon accounting. Learn how the GHG Protocol categorizes greenhouse gas emissions.
In brief
Scope 1, 2, and 3 are the GHG Protocol's three emission categories that together make up a company's complete carbon footprint. Scope 1 covers direct emissions from sources the company owns or controls, Scope 2 covers indirect emissions from purchased electricity, heating, cooling, or steam, and Scope 3 covers all other indirect emissions across the upstream and downstream value chain. For most companies Scope 3 represents 70-90% of total emissions, but starting with Scope 1 and 2 is often easiest since their data is more accessible.
The GHG Protocol
The Greenhouse Gas Protocol (GHG Protocol) is the world's most widely used greenhouse gas accounting standard. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it provides the foundation for nearly all corporate emissions reporting frameworks—including the EU's VSME Standard for SMEs.
The GHG Protocol divides a company's emissions into three "scopes" based on where and how the emissions occur. This categorization helps companies understand their full carbon footprint and identify where reduction opportunities exist.
Visit GHG Protocol websiteThe Three Emission Scopes
Together, these three scopes capture your organization's complete greenhouse gas footprint.
Direct Emissions
Emissions from sources you own or control
Scope 1 covers all direct greenhouse gas emissions from sources that your company owns or controls. These are the emissions you have the most immediate ability to reduce.
Examples:
- •Company vehicles and fleet
- •On-site fuel combustion
- •Manufacturing processes
- •Fugitive emissions (e.g., refrigerants)
Purchased Energy
Emissions from the energy you buy
Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating, and cooling. While you don't produce these emissions directly, your energy consumption drives them.
Examples:
- •Purchased electricity
- •District heating and cooling
- •Purchased steam
Value Chain Emissions
All other indirect emissions in your value chain
Scope 3 includes all other indirect emissions across your entire value chain—from purchased goods and services to how customers use and dispose of your products. For most companies, this is the largest source of emissions.
Examples:
- •Purchased goods and services
- •Business travel
- •Employee commuting
- •Use of sold products
Upstream
(Suppliers)
Your Company
Downstream
(Customers)
Power Plant
Your Company
Upstream
Downstream
Power Plant
Direct Emissions
Scope 1 emissions come from sources that are owned or controlled by your organization. This includes combustion of fuels in company-owned vehicles, boilers, and furnaces, as well as process emissions from manufacturing and fugitive emissions from refrigeration and air conditioning systems. Because you directly control these sources, Scope 1 often represents your best opportunity for immediate emission reductions through operational improvements, equipment upgrades, or fuel switching.
Learn more about Scope 1Purchased Energy
Scope 2 emissions are indirect greenhouse gases from the generation of purchased or acquired electricity, steam, heat, or cooling consumed by your company. Although these emissions physically occur at the facility where the energy is generated (such as a power plant), they are attributed to your organization because your demand drives this energy production. The GHG Protocol allows two accounting methods: location-based (using average grid emission factors) and market-based (reflecting contractual arrangements like renewable energy certificates).
Learn more about Scope 2Value Chain Emissions
Scope 3 encompasses all other indirect emissions that occur in your company's value chain, both upstream and downstream. Upstream emissions include those from purchased goods and services, capital goods, fuel and energy activities, transportation, waste, business travel, and employee commuting. Downstream emissions cover transportation and distribution, processing of sold products, use of sold products, end-of-life treatment, leased assets, franchises, and investments. For most companies, Scope 3 represents 70-90% of their total carbon footprint, making it crucial for understanding your full environmental impact.
Learn more about Scope 3Key Takeaways
- Scope 1 + Scope 2 + Scope 3 = Your complete carbon footprint
- Most companies find Scope 3 represents 70-90% of their total emissions
- Starting with Scope 1 & 2 is often easiest as data is more accessible
- The GHG Protocol provides detailed guidance for each scope
Frequently asked questions
What are Scope 1, 2 and 3 emissions?
The GHG Protocol divides a company's emissions into three scopes based on where and how the emissions occur. Scope 1 covers direct emissions from sources a company owns or controls, Scope 2 covers emissions from purchased energy, and Scope 3 covers all other indirect emissions across the value chain.
What is included in Scope 1 emissions?
Scope 1 covers all direct greenhouse gas emissions from sources that a company owns or controls. Examples include company vehicles and fleet, on-site fuel combustion, manufacturing processes and fugitive emissions such as refrigerants. Because a company directly controls these sources, Scope 1 often represents the best opportunity for immediate emission reductions.
What do Scope 2 emissions mean?
Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling. While a company does not produce these emissions directly, its energy consumption drives them. The GHG Protocol allows two accounting methods: location-based and market-based.
Why are Scope 3 emissions so significant?
Scope 3 includes all other indirect emissions across the entire value chain, from purchased goods and services to how customers use and dispose of products. For most companies, Scope 3 represents 70-90% of total emissions, making it crucial for understanding the full environmental impact.
What is the GHG Protocol?
The Greenhouse Gas Protocol is the world's most widely used greenhouse gas accounting standard. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it provides the foundation for nearly all corporate emissions reporting frameworks, including the EU's VSME Standard for SMEs.
Related content
Scope 1 emissions: direct emissions
Scope 1 covers direct greenhouse gas emissions from sources your company owns or controls. Sources and calculation principles.
Read moreScope 2 emissions: purchased energy
Scope 2 covers indirect emissions from purchased electricity, heat, steam and cooling. Market-based and location-based methods.
Read moreScope 3 cat. 1: Purchased goods and services
Upstream emissions from the production of goods and services your company purchases. For most companies, the largest Scope 3 category.
Read moreWhy calculate your company's emissions?
The business case for emissions calculation: regulatory obligations, lender requirements, customer demand and competitive advantage.
Read moreReady to make progress?
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