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What are Scopes 1, 2 and 3 of emissions?

This concept of the three scopes was invented to address the need for a comprehensive, standardised, and holistic approach to accounting for greenhouse gas emissions. By categorising emissions into three scopes, organisations can better understand their carbon footprint, engage with stakeholders, and take meaningful actions to reduce their impact on the environment.

What are the scopes of GHG emissions?

Each scope covers a distinct category of emissions, and understanding these scopes is essential for effective carbon accounting and emission reduction efforts.

Diagram showing scopes of emissions

Scope 1 emissions

Scope 1 emissions encompass direct greenhouse gas emissions that result from sources that are owned or controlled by the reporting entity. These emissions are generated within the boundaries of an organisation's operations and are often referred to as "direct" emissions.

Examples of Scope 1 emissions include:

  • Combustion of fossil fuels (e.g., gasoline, diesel) for on-site heating, cooling, and energy generation

  • Emissions from industrial processes, such as chemical reactions or combustion of raw materials

  • Fugitive emissions, which are unintentional releases of gases during activities like mining, extraction, or processing

Scope 2 emissions

Scope 2 emissions encompass indirect greenhouse gas emissions that result from the generation of purchased energy used by the reporting entity. These emissions occur outside the organisation's operational boundaries but are associated with its energy consumption. Scope 2 emissions are often referred to as "indirect" emissions.

Examples of Scope 2 emissions include:

  • Emissions from electricity and heat purchased from external sources, such as utilities

  • Emissions from purchased steam or chilled water

Scope 2 emissions reflect the environmental impact of an organisation's energy consumption and are often significant for organisations that rely heavily on electricity or heat from external sources.

Scope 3 emissions

Scope 3 emissions encompass all other indirect greenhouse gas emissions that occur as a result of an organisation's activities but are not directly owned or controlled by the reporting entity. These emissions occur along the entire value chain, from upstream activities (e.g., raw material extraction) to downstream activities (e.g., product use and disposal).

Scope 3 emissions are typically the largest and most complex category and can vary widely depending on the organisation's industry and supply chain. Examples of Scope 3 emissions include:

  • Emissions from purchased goods and services, including those from suppliers

  • Emissions from business travel, employee commuting, and transportation of products

  • Emissions associated with the entire life cycle of products, including manufacturing, distribution, use, and end-of-life disposal

Scope 3 emissions are often the most challenging to measure and manage due to their broad scope and the involvement of multiple stakeholders.

For more information about how we can help your organisation tackle tough Scope 3 carbon emissions, reach out to our expert team.

Why were the Scopes of emissions invented?

The Greenhouse Gas Protocol, a widely recognised and accepted accounting standard developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), introduced the concept of the three scopes of emissions to help organisations effectively measure, manage, and report their emissions.

There were several key reasons behind the invention of the scopes of emissions concept:

Scopes enable comprehensive and holistic carbon accounting

Prior to the introduction of the scopes concept, organisations often focused primarily on their direct emissions (Scope 1) and sometimes considered their energy-related indirect emissions (Scope 2). However, this approach overlooked a significant portion of emissions that occurred upstream and downstream in the value chain (Scope 3).

The scopes of emissions concept encouraged organisations to take a holistic perspective on their carbon footprint and ensured that organisations accounted for emissions across their entire operational footprint.

Scopes encourage supply chain awareness

Scope 3 emissions, which cover indirect emissions along the value chain, draw attention to the environmental impact of a company's supply chain activities. This concept encouraged organisations to engage with suppliers, assess the carbon intensity of purchased goods and services, and work collaboratively toward emission reduction goals.

Consistency and comparability within scopes

The introduction of the scopes concept provided a standardised framework that allowed organisations to measure and report their emissions consistently. This consistency enabled meaningful comparisons between organisations within the same industry and across different sectors, facilitating benchmarking and sharing of best practices.

Setting meaningful reduction targets and strategies

The concept of scopes of emissions provided a clear structure for organisations to set meaningful emission reduction targets and strategies. It helped organisations identify which areas of their operations had the greatest emissions impact and where the most effective emission reduction measures could be implemented.

Scopes concept encouraged regulatory compliance

As governments and regulatory bodies worldwide began to introduce emission reporting and reduction requirements, a standardised framework became essential for organisations to comply with regulations. The scopes concept provided a foundation for many emission reporting regulations to build on.

How are the Scopes of emissions updated?

Since the first publication of Greenhouse Gas Protocol’s standards, such as the Corporate Value Chain (Scope 3) Standard in 2011 and Scope 3 Calculation Guidance in 2013, there have been many important developments in carbon accounting and reporting. For example, the advent of the Science Based Targets initiative (SBTi), the trend toward net-zero targets, mandatory climate disclosure regulations coming into force, the use of the standards by thousands of companies, and increasing academic research on their use and impact.

This means that the standards, and therefore the way in which the Scopes of emissions are defined, need to be updated. The Greenhouse Gas Protocol has a Standards and Guidance Update Process, which outlines that “the aim of any updates will be to align with best practice approaches to ensure GHG Protocol standards for Scope 1, Scope 2 and Scope 3 are effective in providing a rigorous and credible accounting foundation for businesses to measure, plan and track progress toward science-based and net-zero targets in line with the global 1.5°C goal”.

The Greenhouse Gas Protocol has a two-year timeline for its standards update process, and any updates or development of additional guidance will be subject to an inclusive, global, multi-stakeholder decision-making process, with participation from business, NGOs, academia, and government worldwide.

What are Scope 4 emissions?

In recent years a new voluntary metric for avoided emissions, known as Scope 4, has gained in popularity. It covers emission reductions that “occur outside a product’s life cycle or value chain but as a result of the use of that product,” says the World Resources Institute (WRI), which established the Greenhouse Gas Protocol.

Scopes 1, 2 and 3 treat climate change mitigation as a risk to be managed by limiting exposure to emissions regulation, whereas Scope 4 examines the business opportunity from products and services that reduce emissions.

An example of avoided emissions is those associated with plant-based protein. The replacement of animal protein with plant-based protein results in reduced meat production, and as meat production is associated with high emissions from agriculture and land-use, there is anticipated reduced emissions from this switch.

There are two methodological approaches to calculating avoided emissions:

  • Consequential approach: The consequential approach is more holistic and looks at both secondary impacts and unintended consequences. It assesses the system-wide change in emissions from a specific decision

  • Attributional approach: The attributional approach looks at the absolute emissions and removals of a product when compared to a reference product. In practice, due to information or time constraints, this approach is typically used

There are neither mandatory requirements to report Scope 4 emissions, nor universally recognised standards to measure them for carbon accounting purposes. According to the

SBTi, avoided emissions should not count towards near-term or long-term emission reduction targets. They do not count as a reduction of a company’s Scopes 1, 2 and 3 inventories and should be excluded from net-zero reporting, according to the SBTi’s corporate net-zero standard. The WRI says companies should first calculate and report Scopes 1, 2 and 3 emissions before calculating and disclosing an avoided emissions figure.

However, Scope 4 should be part of a comprehensive strategy for reducing emissions if applicable, and there are a number of globally recognised credible frameworks available that provide guidance on how to address avoided emissions. In 2019, the WRI introduced a framework (Comparative Emissions Working Paper) to cover the measurement and disclosure of GHG emissions that stem from a product or service, including avoided emissions. Another example is the Avoided Emissions Framework from Mission Innovation. Both of these examples are included as acceptable frameworks in CDP reporting and aim to provide robustness, transparency and balance when it comes to calculating and reporting on Scope 4 emissions.

To learn more about carbon accounting and GHG management, check out our Ultimate guide for understanding your carbon footprint.

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