GHG Protocol scopes 1, 2 and 3 explained simply

GHG Protocol scopes are three labels that sort a company's greenhouse gas emissions by who controls the source. Scope 1 is what you burn yourself. Scope 2 is the power you buy. Scope 3 is everything else in your value chain. The labels come from the Greenhouse Gas Protocol Corporate Standard, the most widely used guide for company carbon accounting.

Why the scopes exist

A company can cause emissions in many places. Some come from its own chimney. Some come from a power plant far away. Some come from a supplier's factory. If every firm counted these in its own way, no two reports could be compared, and the same tonne could be counted twice.

The Corporate Standard fixes this with three scopes. It says scopes 1 and 2 are defined carefully so that two companies will not count the same emissions in the same scope. It also requires companies that report under it to account for scope 1 and scope 2 at a minimum.

Sources: World Resources Institute and World Business Council for Sustainable Development, The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition, chapter 4 (ghgprotocol.org).

Scope 1: what you own or control

Scope 1 covers direct emissions from sources the company owns or controls. The standard gives examples such as boilers, furnaces and vehicles that burn fuel, and equipment that makes chemicals.

For a small firm, scope 1 is usually short. Think of the diesel in a delivery van, the gas used in an on-site kitchen or heater, and leaks of refrigerant from air conditioners. The standard lists equipment leaks and refrigerant releases as fugitive emissions, and they belong in scope 1.

A leased vehicle can be tricky. Whether it counts as scope 1 depends on how you set your organisational boundary, either by equity share or by control. Pick one method and use it every year.

Sources: GHG Protocol Corporate Standard, Revised Edition, chapter 4, "Scope 1: Direct GHG emissions", and chapter 3 on organisational boundaries (ghgprotocol.org).

Scope 2: the power you buy

Scope 2 covers emissions from making the electricity your company buys and uses. The standard says these emissions physically happen at the plant that generates the power, not at your office. They are still counted as yours because your demand causes them.

For most offices, shops and small factories, scope 2 is simply the electricity bill. Your meter reading in kilowatt-hours is multiplied by an emission factor for your power grid. The standard notes that, for many companies, purchased electricity is one of the largest sources of emissions and the biggest chance to cut them. Using less power, or switching to a cleaner supply where one is offered, lowers the number.

Sources: GHG Protocol Corporate Standard, Revised Edition, chapter 4, "Scope 2: Electricity indirect GHG emissions" (ghgprotocol.org).

Scope 3: the rest of your value chain

Scope 3 covers all other indirect emissions. They result from your activities but come from sources you do not own or control. The Corporate Standard calls scope 3 an optional reporting category, and gives examples such as the making of materials you buy, the transport of purchased fuels, and the use of products you sell.

In 2011 the same project released a separate Corporate Value Chain (Scope 3) Accounting and Reporting Standard. It splits scope 3 into 15 categories. Eight are upstream, which means they happen before the goods reach you, and seven are downstream, which means they happen after you sell. Upstream examples include purchased goods and services, business travel and employee commuting. Downstream examples include the use of sold products and their end-of-life treatment.

For a small firm, a good first pass at scope 3 looks like this:

• Purchased goods and services, such as packaging and raw materials.
• Business travel, such as flights and hotel stays.
• Employee commuting.
• Waste from your operations.

For many firms, scope 3 is the largest part of a footprint, but it is also the hardest to measure. Start with the categories where you have the best data.

Sources: GHG Protocol, Corporate Value Chain (Scope 3) Accounting and Reporting Standard, 2011, including its list of upstream and downstream categories (ghgprotocol.org).

How a small firm can start

You do not need special software to begin. A spreadsheet is enough for a first year.

1. Choose one reporting year, usually twelve months.
2. Decide your boundary: which sites, vehicles and subsidiaries are in.
3. List your scope 1 sources and collect fuel and refrigerant records.
4. Collect electricity bills for scope 2.
5. Pick two or three scope 3 categories where records already exist.
6. Write down your method, so next year's figures can be compared with this year's.

Report scope 1 and scope 2 separately from each other, as the standard asks. Keep scope 3 apart as well. Adding all three into one number hides where the biggest chances to cut are.

Sources: GHG Protocol Corporate Standard, Revised Edition, chapters 3 and 4; Scope 3 Standard, 2011 (ghgprotocol.org).

Sources

• The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition, WRI and WBCSD, ghgprotocol.org/corporate-standard
• Corporate Value Chain (Scope 3) Accounting and Reporting Standard, WRI and WBCSD, 2011, ghgprotocol.org/standards/scope-3-standard