Scope 1, 2 & 3 Emissions – What Is Behind Them?
The Greenhouse Gas Protocol categorises greenhouse gas emissions into three scopes. For SMEs, this framework forms the foundation of any robust ESG reporting and sustainability report.
Scope 1 – Direct Emissions
Direct combustion sources from owned or controlled operations: company vehicles, heating systems, and manufacturing processes. Example: fuel consumption and workshop heating of a craft business.
Scope 2 – Purchased Energy
Indirect emissions from purchased electricity, steam, heating, or cooling. Businesses switching to certified renewable electricity can reduce these Scope 2 emissions to zero.
Scope 3 – Indirect Value Chain Emissions
Typically accounting for 80–90% of a company's total carbon footprint, this is the largest category. It encompasses upstream supplier emissions as well as downstream impacts like product transport and end-of-life disposal.
Recommended Best Practices for ESG Reporting
Measure Scope 1 & 2 emissions as your baseline
Identify key Scope 3 carbon hotspots
Engage external sustainability professionals for complex carbon accounting
A comprehensive sustainability report enhances transparency and builds trust with financial institutions and corporate clients alike.
