Scope 1, 2 and 3 emissions

What it means

Scope 1, 2 and 3 emissions are the split of a company’s greenhouse gases under the international GHG Protocol standard. Scope 1 covers direct emissions from its own sources, such as a boiler, production processes or company cars running on fuel.

Scope 2 covers indirect emissions from purchased electricity, heat and steam, produced at the energy supplier. Scope 3 covers all other indirect emissions in the value chain: purchased goods and services, transport, business travel, employee commuting and the use and disposal of products sold.

Together they make up the company’s carbon footprint, expressed in tonnes of CO2 equivalent. Scope 3 is usually the largest, often most of the footprint for trading companies, and also the hardest to measure because it depends on suppliers’ data.

How it works in practice

Companies under CSRD report emissions under the ESRS standards, including Scope 3 in the categories material to them. Smaller companies calculate them mostly because a large customer asks, needing them for its own Scope 3, and a simpler calculation under VSME is then enough.

Scope 1 and 2 data can be drawn from the books: invoices for fuel, gas, electricity and heat, the vehicle logbook and fuel consumption. We prepare an annual consumption summary from the documents for clients, to which emission factors are then applied.

When importing certain goods, such as steel, aluminium or fertilisers, embedded emissions are also reported under CBAM. It is a separate mechanism with its own rules, but suppliers’ data can serve both purposes.

What to watch out for

The most common mistake is double counting or mixing up Scope 2 and 3, for example in rented premises where the landlord pays for energy. What matters is who has operational control over the source, and the method should be chosen once and kept every year so that years stay comparable.

Claims of reduced emissions or carbon neutrality must be backed by data and method, otherwise they amount to greenwashing. Offsetting emissions with purchased credits is not the same as reducing them, and new EU rules severely restrict such claims towards consumers.