What Are Scopes 1, 2, and 3 of Carbon Emissions? [Updated 2025]

What Is GHG Carbon Reporting?

In simple terms, carbon reporting means measuring how many greenhouse gas (GHG) emissions your business puts into the atmosphere. This is your carbon footprint, usually expressed in CO2e (carbon dioxide equivalent).

Because businesses generate emissions in many ways, the Greenhouse Gas Protocol created a global framework to categorise them. These categories are called Scopes. They standardise reporting and make comparisons consistent across industries.

Before we dive into the scopes, let’s ask: why are more businesses reporting on carbon?

Why Is Carbon Reporting Becoming Common?

1. Supplier requirements
   Many organisations now require suppliers to disclose their emissions. This ensures supply chains align with sustainability goals.
2. Investor and stakeholder demands
   Investors increasingly expect transparency on carbon emissions and reduction strategies. Companies with strong ESG credentials often attract more investment.
3. Compliance and regulations
   Frameworks such as the Science Based Targets initiative (SBTi) require disclosure and reduction targets aligned with the Paris Agreement. Carbon reporting is often a first regulatory step toward Net Zero.

Introducing the 3 Scopes of Emissions

To explain, let’s use an example: Company ABC, a fictional electronics manufacturer.

Scope 1: Direct Emissions

These are direct emissions from sources your company owns or controls.

Examples:

• Stationary combustion: Natural gas burned in your boilers
• Mobile combustion: Fuel used by your vehicle fleet
• Fugitive emissions: Refrigerant leaks from cooling systems
• Process emissions: GHGs released during chemical processes

👉 For Company ABC: Scope 1 includes emissions from its factory boilers, delivery trucks, refrigerant leaks, and nitrous oxide from manufacturing.

Scope 2: Indirect Energy Emissions

These are indirect emissions from purchased energy, such as electricity, steam, or heating.

Examples:

• Purchased electricity: Emissions from power plants supplying your office or factory
• Purchased heat, steam, or cooling: Emissions created elsewhere but consumed by your company

👉 For Company ABC: Scope 2 includes emissions from the coal, gas, or renewable mix used by its electricity supplier.

Scope 3: Value Chain Emissions

Scope 3 covers all other indirect emissions in your value chain. This is usually the largest category, often 90% of a company’s footprint.

There are 15 categories, including:

• Purchased goods and services (raw materials, packaging)
• Capital goods (machinery, equipment)
• Upstream and downstream transportation
• Waste generated in operations
• Business travel and employee commuting
• Use of sold products (energy consumed by customers)
• End of life treatment (disposal or recycling of products)
• Investments and franchises

👉 For Company ABC: Scope 3 includes emissions from suppliers, the transport of raw materials, employee flights, and the energy customers use to power ABC’s electronics.

What Comes After Measuring Scopes?

Once you calculate your Scope 1, 2, and 3 emissions, you have your total carbon footprint. This is the foundation for:

• Setting science based targets
• Reducing emissions in priority areas
• Moving toward Net Zero

👉 Next steps:

• Read our Carbon Footprint 101 article for the basics
• Download our Free Net Zero Guide for a deeper dive
• Explore Futureproof’s GHG Carbon Reporting Software to measure, manage, and reduce emissions effectively

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