The Three Scopes Framework
The GHG Protocol established the three scopes framework to create a comprehensive, standardized approach to corporate greenhouse gas accounting. By categorizing emissions based on ownership and control, the framework prevents double-counting while ensuring complete coverage of an organization's climate impact across its operations and value chain.
This classification enables organizations to understand where emissions originate, identify reduction opportunities, and allocate responsibility appropriately throughout economic activities. All three scopes together provide the complete picture of an organization's carbon footprint.
Scope 1: Direct Emissions
Scope 1 covers all direct greenhouse gas emissions from sources owned or controlled by the reporting organization. These emissions occur on-site or from company-owned assets and are under the organization's direct operational control.
Common Scope 1 sources include:
Combustion of fuels in company-owned vehicles, furnaces, or boilers
Process emissions from manufacturing or chemical reactions
Fugitive emissions from refrigeration systems, air conditioning, or industrial equipment
Agricultural emissions from livestock or rice cultivation (for agricultural operations)
Organizations have the most direct control over Scope 1 emissions, making them often the easiest to reduce through operational changes, equipment upgrades, or fuel switching.
Scope 2: Indirect Energy Emissions
Scope 2 accounts for indirect emissions from purchased energy consumed by the organization. While the actual emissions occur at power plants or district heating facilities owned by others, they result from the organization's energy consumption and are therefore attributed to the purchasing organization.
Scope 2 emissions primarily include:
Purchased electricity for offices, facilities, and operations
Purchased heating, cooling, or steam from district systems
Organizations can reduce Scope 2 emissions through energy efficiency improvements, purchasing renewable electricity, installing on-site renewable generation, or negotiating power purchase agreements for clean energy. The GHG Protocol allows two calculation methods: location-based (using grid average emissions) and market-based (reflecting contractual purchases of specific energy).
Scope 3: Value Chain Emissions
Scope 3 encompasses all other indirect emissions occurring in an organization's value chain, both upstream and downstream. These emissions result from the organization's activities but occur at sources not owned or controlled by the organization.
The GHG Protocol identifies 15 Scope 3 categories:
Upstream emissions:
Purchased goods and services, capital goods, fuel and energy-related activities, upstream transportation and distribution, waste generated in operations, business travel, employee commuting, upstream leased assets
Downstream emissions:
Downstream transportation and distribution, processing of sold products, use of sold products, end-of-life treatment of sold products, downstream leased assets, franchises, investments
For most organizations, Scope 3 represents the majority of total emissions. However, it's also the most challenging to measure and influence, requiring supplier engagement, product lifecycle analysis, and value chain collaboration.
Why All Three Scopes Matter
Comprehensive climate action requires addressing all three scopes. Focusing only on Scope 1 and 2 provides an incomplete picture and can miss the majority of climate impact. For example, a software company might have minimal Scope 1 and 2 emissions but substantial Scope 3 emissions from servers, employee travel, and purchased services. A retailer's emissions occur primarily in manufacturing and transportation of sold products—all Scope 3.
Organizations pursuing science-based targets or net-zero commitments must include relevant Scope 3 categories. This holistic approach drives systemic change, encourages supplier engagement, influences product design, and ensures accountability for true climate impact rather than simply shifting emissions to other parts of the value chain.
