Scope 1 / 2 / 3 Emissions
The classification of greenhouse gas emissions into direct (Scope 1), energy-related indirect (Scope 2), and other indirect (Scope 3).
The Scope 1 / 2 / 3 framework, established by the GHG Protocol, provides a standardised way for organisations to categorise and measure their greenhouse gas emissions. Scope 1 covers all direct emissions from sources owned or controlled by the company — such as combustion in company-owned boilers, furnaces, or vehicles, and process emissions from industrial operations. These are the emissions most directly within the company's control.
Scope 2 covers indirect emissions from the generation of purchased electricity, heat, steam, or cooling consumed by the company. Although these emissions physically occur at the power plant or energy facility, they are attributed to the purchasing company as the entity driving the demand. Scope 2 can be calculated using either a location-based method (average grid emission factors) or a market-based method (accounting for renewable energy certificates or power purchase agreements).
Scope 3 is the most comprehensive and complex category, covering all other indirect emissions that occur across the company's value chain — both upstream (e.g. extraction of purchased raw materials, supplier manufacturing, business travel) and downstream (e.g. use of sold products, end-of-life processing, investments). The GHG Protocol defines 15 distinct Scope 3 categories. For most companies, Scope 3 represents the largest share of total emissions — often exceeding 70–90% — making it the most impactful but also most challenging area for climate action.
Legal Basis
GHG Protocol Corporate Standard (WRI/WBCSD); GHG Protocol Corporate Value Chain (Scope 3) Standard; ESRS E1 under CSRD; ISO 14064-1; SBTi Corporate Standard
Practical Example
A software company calculates its greenhouse gas inventory for its first CSRD report. Scope 1 is minimal — limited to a small company car fleet. Scope 2 covers the electricity consumption of its offices and data centres; by switching to a green electricity tariff, it reduces its market-based Scope 2 figure to near zero. Scope 3 is the dominant category, with cloud computing services (Category 1: purchased goods and services), employee commuting (Category 7), and business travel by air (Category 6) identified as the most significant sources. The company sets science-based targets focusing primarily on reducing its Scope 3 Category 1 emissions through supplier engagement.