GHG Scopes 1, 2 and 3 Explained

What are the GHG scopes?

The GHG scopes are three groups that the GHG Protocol Corporate Standard uses to sort a company's emissions by where they occur and how much control the company has. Scope 1 is direct; Scopes 2 and 3 are indirect.

Using scopes has three benefits:

1. It shows where you have direct control and where you need to work with suppliers or customers.
2. It makes your emissions visible across the whole value chain, so you can plan reductions for each part.
3. It reduces the risk of missing sources, and stops two companies in the same chain counting the same emissions as their own direct emissions.

The scopes sit within your operational boundary. If you have not set your boundaries yet, start with determining your GHG inventory boundaries.

How do Scopes 1, 2 and 3 compare?

What are Scope 1 emissions?

Scope 1 emissions are direct GHG emissions from sources your company owns or controls. They are the emissions you are most directly responsible for.

They come from four main activities:

• Stationary combustion: burning fuel to make electricity, heat or steam on site, for example in boilers and furnaces.
• Process emissions: chemical or physical processes, such as cement or chemicals production.
• Mobile combustion: fuel used in vehicles you own or control.
• Fugitive emissions: leaks of refrigerants from air conditioning and refrigeration, or methane from equipment.

How can you reduce Scope 1 emissions?

• Cut fuel use through better insulation, heat recovery and maintenance.
• Electrify heat and vehicles where possible, so emissions shift to Scope 2 and can fall further with clean power.
• Fix refrigerant leaks and move to lower-GWP refrigerants.
• Change processes to use less carbon-intensive inputs or fuels.

What are Scope 2 emissions?

Scope 2 emissions are indirect emissions from making the electricity, heat, steam or cooling your company buys and uses. They happen at the power station, not on your site.

Although indirect, you control them through how much energy you use and what you buy. Most companies can calculate Scope 2 from their energy bills.

The GHG Protocol's Scope 2 Guidance (2015) requires two figures:

• Location-based: uses the average emission factor of the grid where you use the power.
• Market-based: uses the emission factor of the electricity you have chosen to buy, through contracts, renewable energy certificates or supplier-specific rates.

Our guide on how to calculate GHG emissions includes a worked Scope 2 example.

How can you reduce Scope 2 emissions?

• Use less energy through efficient equipment, lighting and controls.
• Buy renewable electricity through power purchase agreements or green tariffs.
• Generate on site with solar or efficient combined heat and power, where it replaces more carbon-intensive grid power.

What are Scope 3 emissions?

Scope 3 emissions are all other indirect emissions in your value chain, from the goods you buy to the use and disposal of what you sell. The GHG Protocol Scope 3 Standard (2011) splits them into 15 categories.

Scope 3 is usually the largest share of a company's footprint. CDP and BCG found that companies disclosing to CDP reported supply chain emissions averaging 26 times their Scope 1 and 2 emissions (CDP and BCG, June 2024).

It is also the hardest to measure, because it relies on data from suppliers and customers. The GHG Protocol asks companies to report all relevant categories and to explain any they leave out. Our Scope 3 emissions guide covers each category in detail.

How can you reduce Scope 3 emissions?

• Measure first. Find the categories and suppliers that drive most of your Scope 3, then focus there.
• Work with suppliers. Share targets, ask for primary data and support their decarbonisation. See Scope 3 supplier engagement best practices.
• Redesign products and packaging to use less material, lower-carbon materials and more recycled content.
• Change how you travel and ship, for example with travel policies and lower-emission freight modes.

What does Scope 3 look like in real inventories?

In our customer data, Scope 3 often dwarfs the rest. Within Scope 3, a few activities usually dominate. Princes found that its top five activities made up more than 60% of its emissions, which told the team where to focus supplier work. Read the Princes case study.

Where do biogenic CO2 emissions fit?

Biogenic CO2 from burning or breaking down biomass, such as biofuels, wood or biogas, sits outside the three scopes. The GHG Protocol requires companies to report it separately.

This is because the carbon was recently absorbed from the air by plants, unlike fossil carbon. Methane and nitrous oxide from burning biomass are still counted in the scopes. For land-based emissions and removals, see our guide to the GHG Protocol land sector rules.

How Terrascope helps you measure every scope

Terrascope's corporate carbon footprint platform covers Scopes 1, 2 and 3 in one inventory.

• Scope 1 and 2: take in fuel, refrigerant and energy data from sites and meters, with location-based and market-based Scope 2. See energy, waste and water tracking.
• Scope 3: screen all 15 categories from spend data, then improve data for your hotspots.
• Suppliers: collect and track primary data through Scope 3 supplier engagement.
• Audit trail: every number links to its source data and emission factor.

Not sure where your Scope 3 hotspots are? Book a complimentary value chain mapping workshop.

Frequently asked questions

What is the difference between Scope 1, 2 and 3? Scope 1 is direct emissions from sources you own or control. Scope 2 is emissions from the energy you buy. Scope 3 is all other emissions in your value chain, from suppliers to customers.

What are the 15 categories of Scope 3? Eight upstream: purchased goods, capital goods, fuel and energy activities, upstream transport, waste, business travel, commuting and upstream leased assets. Seven downstream: downstream transport, processing, use and end of life of sold products, downstream leased assets, franchises and investments.

Is Scope 3 reporting mandatory? It is optional under the GHG Protocol Corporate Standard, but required by IFRS S2 (with first-year relief), California SB 253 (from 2027) and the EU's CSRD for companies in scope.

Is electricity Scope 1 or Scope 2? Electricity you buy from the grid or a supplier is Scope 2. Electricity you generate yourself by burning fuel on site is Scope 1. Upstream emissions from fuel extraction and grid losses are Scope 3, Category 3.

Are refrigerant leaks Scope 1? Yes. Leaks from air conditioning and refrigeration equipment you own or control are Scope 1 fugitive emissions. They are often missed, so check maintenance and top-up records.

Which scope is usually the largest? Scope 3, for most companies. CDP and BCG's 2024 analysis found supply chain emissions averaged 26 times operational emissions for companies disclosing to CDP.