Scope 1, 2, and 3 emissions
Also known as: greenhouse gas scopes, emission scopes
Scope 1, 2, and 3 are categories used to measure a company's greenhouse gas emissions.
Scope 1 covers direct emissions from sources it owns, like its vehicles and boilers. Scope 2 covers emissions from the electricity and heat it buys. Scope 3 covers everything else in its value chain, from suppliers to customers using its products. While Scope 3 is usually the largest share by far, it's also the hardest to measure and the most fiercely debated in climate disclosure rules.
Scope 1, 2, and 3 emissions, explained at three levels
At home
Think of a bakery. Scope 1 is the gas burned in its own ovens and delivery van. Scope 2 is the pollution from the power plants that make the electricity it buys for lights and fridges. Scope 3 is everything else: growing the wheat, making the packaging, trucking in flour, and even customers driving to the shop. Together, the three scopes add up to the bakery's full climate footprint.
At work
Scope 1, 2, and 3 are the standard categories for a company's greenhouse gas inventory under the Greenhouse Gas Protocol. Scope 1 is direct emissions, Scope 2 is purchased energy, and Scope 3 is the rest of the value chain. Investors, regulators, and large customers ask for scope reporting to compare companies, set reduction targets, and see where climate risk sits.
At home
Each scope is calculated by multiplying an activity by an emission factor. Burning 1,000 litres of diesel in company trucks is Scope 1, converted using a factor for diesel. Electricity is Scope 2, using a factor for the local grid. Scope 3 is split into 15 categories, eight upstream, such as purchased goods and business travel, and seven downstream, such as use of sold products and disposal. For many retailers and manufacturers, Scope 3 is the large majority of the total.
At work
Scope 2 has two methods. Location-based uses the average emissions of the local grid, while market-based reflects contracts the company signs, such as renewable energy certificates or power purchase agreements. Scope 3 usually starts with spend-based factors, which estimate emissions per dollar spent, then improves with activity data and supplier-specific figures. Disclosure regimes such as IFRS S2 and California's SB 253 increasingly expect independent assurance, starting with Scopes 1 and 2.
At home
The scopes overlap on purpose. A trucking company's diesel is its Scope 1, but it is also Scope 3 for every shipper that hires it, and a factory's Scope 2 is Scope 1 for the power plant. The same tonne appears in many reports. While that makes adding companies' totals together meaningless, in my opinion it isn't double-counting in a bad sense: it reflects shared responsibility for the same emissions.
At work
Build Scope 3 programs around materiality: find the categories that dominate, engage key suppliers for primary data, and document methods. Spend-based estimates have a known failure mode: emissions appear to fall when prices fall, even if nothing changed physically. Outdated emission factors and inconsistent boundaries cause similar errors. Track the GHG Protocol's ongoing standard revisions, how Canadian regulators adopt the CSSB standards, and California's SB 253, whose first Scope 1 and 2 reports were due November 10, 2026.
Real-world examples
At home
Sophie works at a small marketing agency that a big client asked to report its emissions. She was surprised that the agency's largest source wasn't its office electricity but business flights and the cloud services it used, both Scope 3.
At work
Thomas is the sustainability lead at a Canadian food manufacturer selling to a large US retailer. The retailer requires suppliers to report emissions for its own Scope 3 inventory, so Thomas's team built a Scope 1 and 2 inventory and began collecting data on ingredients.
How it compares
| feature | Scope 1 | Scope 2 | Scope 3 |
|---|---|---|---|
| Covers | Direct emissions from owned sources | Purchased electricity, heat, steam | All other value-chain emissions |
| Example | Company trucks and furnaces | Office electricity | Suppliers, travel, product use |
| Measurement difficulty | Low | Low to medium | High |
| Typical share of total | Varies, often small | Varies, often small | Often the majority |
Scopes 1 and 2 are what you control. Scope 3 is what you influence.
For analysts
Climate data requests from large customers are becoming a condition of doing business. I'd set up a basic Scope 1 and 2 inventory now and identify the top few Scope 3 categories, because waiting until a contract requires it is the expensive path.
History & origin
The Greenhouse Gas Protocol, a partnership between the World Resources Institute and the World Business Council for Sustainable Development launched in 1998, published its Corporate Standard in 2001, introducing the three scopes. A separate Scope 3 standard followed in 2011. CDP surveys, science-based targets, and investor pressure made scope reporting common for large companies. In 2023, the International Sustainability Standards Board issued IFRS S2, which includes all three scopes, and Canada's Sustainability Standards Board released Canadian versions in December 2024. The US SEC adopted a climate rule in 2024 but stopped defending it in 2025, while California's SB 253 required large companies to file Scope 1 and 2 reports by November 10, 2026, with Scope 3 expected from 2027. In my view, Scope 3 is where real decarbonization happens, and also where estimates can hide the most uncertainty.