What are Scope 1, 2 and 3 Emissions?
Scope 1, 2 and 3 emissions are the three categories in the Greenhouse Gas (GHG) Protocol used to measure an organisation’s carbon footprint. Scope 1 covers direct emissions from sources the organisation owns or controls. Scope 2 covers indirect emissions from purchased electricity, steam, heating and cooling. Scope 3 covers all other indirect emissions in the upstream and downstream value chain.
Together, the three scopes give a complete picture of the greenhouse gases an organisation is responsible for. They also make it clear who ‘owns’ each source of emissions, which is the starting point for carbon reporting, science-based targets and net zero planning.
These Scopes create a framework for organisations to understand their direct and indirect emissions created in the running of their organisation. The three scopes classify emissions according to whether they arise directly from sources owned or controlled by the organisation, from purchased energy, or elsewhere across its upstream and downstream value chain. This helps organisations manage emissions from their own operations and purchased energy, while identifying opportunities to influence and collaborate with suppliers, customers and other value-chain partners to reduce indirect emissions.
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Scopes 1, 2 and 3 Emissions Defined
To help you tackle decarbonisation within your organisation and to reach net zero carbon emissions, the first step is to understand the different Greenhouse Gas Scope Emissions.
What are Scope 1 emissions?
Direct emissions that come from an organisation’s operations and are under their control, including:
- Fuel combustion on site such as gas boilers
- Fleet vehicles
- Air Conditioning
- Owned generators
- Process emissions
- Fugitive refrigerant leaks
What are Scope 2 emissions?
Indirect emissions generated by the purchase of electricity, including:
- Steam
- Heating and cooling consumed by an organisation
- Location-based vs market-based reporting
What are Scope 3 emissions?
Scope 3 emissions are indirect emissions that occur across an organisation’s value chain. They are grouped into 15 upstream and downstream categories under the GHG Protocol and often account for the largest share of a company’s carbon footprint. Common examples include:
- Purchased goods and services
- Business travel
- Employee commuting
- Waste generated in operations
- Transportation and distribution
Why Measure Scope 1, 2 and 3 Emissions?
Reporting on your emissions is important to establish a scope, set a baseline for your CO2 emissions, determine any carbon reduction targets and track your success. To be able to do this you need to be regularly capturing your carbon emissions data.
UK requirements already place energy and carbon-related obligations on qualifying organisations. Streamlined Energy and Carbon Reporting (SECR) requires specified energy-use and greenhouse-gas disclosures, while the Energy Savings Opportunity Scheme (ESOS) requires qualifying organisations to assess energy use across their buildings, industrial processes and transport and identify energy-saving opportunities.
Scope 3 emissions reporting
Many organisations already report on their Scope 1 and Scope 2 emissions, but Scope 3 emissions can be more challenging to measure due to the breadth of activities across the value chain and the availability of reliable data. Despite these challenges, Scope 3 often accounts for the largest proportion of an organisation’s carbon footprint, making it essential for understanding the full impact of business operations and identifying the most significant opportunities for carbon reduction.
As stakeholder expectations and reporting requirements continue to evolve, organisations are placing greater focus on measuring and managing Scope 3 emissions. Establishing a robust framework for data collection, monitoring and reporting helps embed carbon management into business processes and supports long-term decarbonisation goals.
Learn more about supply-chain carbon reduction and explore the 15 Scope 3 emissions categories.
What are the Benefits of Reporting on Scope 1, 2 and 3 Emissions?
- Identify peaks in emissions in your organisation and supply chain
- Better understand your organisation’s carbon emissions and opportunities to reduce them
- Ensure reporting is in line with acceptable industry practices and regulatory requirements
- Make operational cost savings through understanding your energy use
- Develop the emissions inventory needed to support science-based target setting and an application for validation against the applicable Science Based Targets Initiative criteria
- Differentiate your organisation from competitors by demonstrating best practice in carbon reduction and energy efficiency
- Demonstrate improved performance year on year by establishing ongoing monitoring of GHG emissions
- Build your organisation into a leader in sustainability, and become a more attractive investment to customers, stakeholders, and future employee talent
- Fulfil your customers’ requirements in proving your sustainability credentials
- Elevate your organisation’s reputation through your contribution to achieving zero carbon emissions, positive environmental change and investment in future generations
- Contribute to reducing environmental pollution, supporting the UK Government’s Net Zero 2050 target
How TEAM can help you understand your Scope emissions
Our team of carbon reduction consultants supports organisations to measure, manage and report their greenhouse gas emissions, helping them develop bespoke strategies that support sustainability, compliance and net zero objectives.
To find out how our consultants can support your carbon management journey, get in touch or explore our services and resources, including Greenhouse Gas Reporting, Reducing Supply Chain Emissions, the Science Based Targets Initiative (SBTi), Carbon Reporting Software, and our guide to Scope 1, 2 and 3 emissions examples.
Scope 1, 2 and 3 FAQs
Measuring Scope 1 emissions, which are direct emissions from owned or controlled sources, presents challenges such as ensuring data accuracy and maintaining regulatory compliance. Companies need to accurately measure emissions from various sources like company vehicles and on-site fuel combustion, while also keeping up with evolving regulations and standards.
Scope 2 emissions, which are indirect emissions from the generation of purchased electricity, steam, heating, and cooling, face challenges in data collection and the variability of emission factors. Companies must gather reliable data from utility providers and deal with the differences in emission factors used to calculate emissions from energy consumption.
Scope 3 emissions, encompassing all other indirect emissions in a company’s value chain, are the most challenging to measure. This is due to complex supply chains, data quality and availability issues, and the need for stakeholder engagement. Additionally, many companies, especially SMEs, struggle with the financial and human resources required to process the large volume of data needed for accurate measurement.
Regulations and standards are essential for ensuring accurate and transparent reporting of Scope 1, 2, and 3 emissions. They provide a structured framework that helps organisations measure and report their emissions consistently. These guidelines drive companies to improve sustainability practices, enhance operational efficiencies, and engage more effectively with stakeholders. By adhering to these standards, businesses can better manage their greenhouse gas risks, identify reduction opportunities, and contribute to global climate change efforts.
Stakeholders play a vital role in addressing Scope 1, 2, and 3 emissions by driving transparency, accountability, and collaboration. For Scope 1 and 2 emissions, stakeholders such as employees, investors, and regulatory bodies push companies to adopt cleaner technologies, improve energy efficiency, and comply with environmental regulations. Their involvement ensures that companies take direct actions to reduce their immediate environmental impact.
When it comes to Scope 3 emissions, which involve the entire value chain, stakeholders like suppliers, customers, and partners are essential. Collaboration with these groups is necessary to gather accurate data, implement sustainable practices, and reduce emissions across the supply chain. Engaging with suppliers on sustainability initiatives and encouraging customers to adopt eco-friendly practices can significantly lower indirect emissions. Overall, stakeholders help create a culture of sustainability within organisations, ensuring that companies not only report their emissions accurately but also take meaningful steps to reduce their carbon footprint.
Carbon credits may be used to support climate mitigation beyond an organisation’s value chain or, where an applicable framework permits, to address residual emissions. However, they do not replace the need to calculate and report gross Scope 1, 2 and 3 emissions or prioritise direct reductions across the organisation and its value chain. Any carbon credits, removals or avoided-emissions claims should be disclosed separately and accounted for in accordance with the reporting or target-setting framework being used.
Scope 1, 2, and 3 emissions are integrated into sustainability reporting to provide a comprehensive view of a company’s environmental impact. Scope 1 covers direct emissions from owned or controlled sources, Scope 2 includes indirect emissions from purchased energy, and Scope 3 encompasses all other indirect emissions in the value chain. Reporting all three scopes helps companies identify areas for improvement, set reduction targets, and demonstrate their commitment to sustainability to stakeholders.
Various tools and resources, such as carbon management software, IoT-based environmental monitoring solutions, and collaborative platforms, help companies manage their Scope 1, 2, and 3 emissions effectively. For instance, TEAM Energy provides comprehensive energy management solutions that enable organisations to track and reduce their carbon emissions, optimise energy consumption, and support sustainability initiatives.
Scope 1, 2, and 3 emissions impact a company’s sustainability goals by providing a full view of its environmental footprint. Scope 1 covers direct emissions from operations, Scope 2 includes indirect emissions from purchased energy, and Scope 3 encompasses all other indirect emissions in the value chain. Managing these emissions requires adopting cleaner technologies, improving energy efficiency, and collaborating with stakeholders to implement sustainable practices, helping companies set effective reduction targets and contribute to climate change mitigation.
Speak to us
Speak to a consultant on 01908 889801 to learn how our Net Zero and Carbon Reduction Consultancy services can help you