Scope 1 / 2 / 3
The Three-Scope Framework
Introduced by the GHG Protocol Corporate Standard, the three-scope framework is the universal language of carbon accounting. It prevents double counting across supply chains while ensuring all emission sources — from on-site boilers to purchased goods — are comprehensively captured. Every major global regulation (CSRD, SECR, IFRS S2, CDP) mandates this framework.
Scope 1 — Direct Emissions
From sources owned or controlled by the organisation
Scope 1 covers all GHG emissions that occur directly from activities under the organisation's operational control. These are the emissions the organisation produces itself — the most straightforward to measure and the first target for operational reduction strategies.
| Source Category | Examples |
|---|---|
| Stationary combustion | Boilers, furnaces, generators burning natural gas, diesel, LPG |
| Mobile combustion | Company vehicles, forklifts, company-owned aircraft |
| Industrial process emissions | Chemical reactions, cement production, steel manufacturing |
| Fugitive emissions | Refrigerant leaks (HFCs), methane from pipelines, SF₆ from switchgear |
| Fumigation gases | Methyl Bromide (GWP 2.4), Sulfuryl Fluoride (GWP 4,732) — pest control operations |
Auditor note: Scope 1 boundaries follow the chosen consolidation approach (equity share / operational control). All sources must be inventoried; exclusions require documented materiality justification.
Scope 2 — Indirect Energy Emissions
From purchased electricity, heat, steam or cooling
Scope 2 captures the indirect emissions from energy purchased and consumed by the organisation. The GHG Protocol requires companies to report using both methods:
Location-Based Method
Uses the average emission intensity of the national or regional grid (e.g. UK grid: 0.205 kg CO₂e/kWh — DEFRA 2024). Reflects the actual physical energy mix of the grid.
Market-Based Method
Uses emission factors from contractual instruments — Renewable Energy Certificates (RECs), Guarantees of Origin (GOs), or Power Purchase Agreements (PPAs). Zero-carbon if matched with credible renewable certificates.
Auditor note: Both methods must be disclosed. Market-based claims require valid, current-year RECs/GOs from the same country or region. Residual mix factors must be used where PPAs are insufficient.
Scope 3 — Value Chain Emissions
All other indirect emissions in the upstream and downstream value chain
Scope 3 typically accounts for 70–90% of a company's total carbon footprint. The GHG Protocol defines 15 categories split between upstream (related to purchased inputs) and downstream (related to sold products and services). Under CSRD, all material Scope 3 categories must be disclosed.
Upstream Categories
Downstream Categories
Regulatory Developments
EU CSRD makes Scope 3 mandatory for 50,000+ companies from financial year 2024
European Commission · 2024
SEC final rules: Scope 3 removed for most registrants; Scope 1 & 2 mandatory from 2026
SEC.gov · 2024
Apple, Microsoft, Google set Scope 3 net-zero targets — supply chain decarbonisation accelerates
CDP Supply Chain · 2024
GHG Protocol Scope 3 Standard revision: draft guidance on avoided emissions and removals
GHG Protocol · 2025
Calculate Scope 1, 2 and 3 in one place
CarbonTrace handles all three scopes with the correct methodology for each source type.