Scopes 1, 2 and 3 in business: the practical guide

The three-scope structure was formalized by the GHG Protocol (Greenhouse Gas Protocol), the international carbon accounting standard co-founded by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). Supplemented in 2011 by the Corporate Value Chain (Scope 3) Standard, this framework underpins almost every carbon footprint assessment and regulatory reporting requirement^[3]. The core idea: a company is not responsible for all emissions in the same way. Burning gas in your boiler, buying electricity, and having a supplier's truck on the road — three types of responsibility, three scopes.

This structure drives action: Scope 1 is managed through boilers and fleet, Scope 2 through electricity contracts, and Scope 3 through the value chain. Three levers, three distinct management strategies.

Scope 1 covers emissions from sources owned or controlled by the company: natural gas combustion, fuel from company vehicles, industrial processes that emit directly (such as cement calcination), and fugitive emissions (refrigerant leaks from air conditioning and industrial refrigeration)^[3]. It is the simplest scope to measure, relying on internal physical data (litres of fuel oil, kilometres driven, refrigerant refilled). The challenge is not the calculation itself but completeness — overlooking a single site or fluid is enough to skew the total.

Scope 2 covers emissions associated with purchased energy: electricity, but also steam, heat, and cooling. The emissions occur at a power plant, not on your premises, but they result from your consumption, which is why they are classified as indirect^[3].

One important nuance: the GHG Protocol requires dual reporting. The location-based method applies the average emission factor for the local grid. The market-based method accounts for your contracts: with a green electricity contract backed by valid guarantees of origin, your market-based Scope 2 can fall to zero, even though the location-based figure still reflects the grid mix^[4]. Both figures must be published.

Scope 3 is everything else: the indirect emissions of the value chain, both upstream and downstream. This is where most of the footprint hides, between 70 and 90 % of total emissions depending on the sector^[1]. A mid-market industrial company that only looks at its boilers and electricity is ignoring nine-tenths of its carbon footprint.

The standard breaks this boundary into 15 categories, eight upstream and seven downstream^[5]: purchased goods and services (Category 1, often the largest item), capital goods, both upstream and downstream transportation, waste, business travel, employee commuting, and the use and end-of-life of sold products.

Scope 3 remains the hardest to measure: it depends on data held by your suppliers, customers, and service providers. When primary data is unavailable, companies fall back on secondary data, sector averages from public databases. This is acceptable for a first assessment, provided you are transparent about the share that is estimated and refine it each year.

The calculation follows a single principle: multiply an activity datum (kWh, kilometres, tonnes of steel) by an emission factor (kgCO₂e per kWh, per km, per tonne) to obtain emissions expressed in CO₂ equivalent.

For emission factors, the French reference is the Base Empreinte® published by ADEME (formerly Base Carbone®), a free public database containing more than 60,000 emission factors covering energy, transport, procurement, as well as waste^[6]. It underpins both the Bilan Carbone® methodology and statutory GHG inventories (BEGES), and is also accepted by international standards (GHG Protocol, ISO 14064).

On the activity data side, collection is the real challenge. For Scopes 1 and 2, internal sources are sufficient (energy invoices, fleet management). For Scope 3, you need to gather information from suppliers or trace it back through accounting lines, which is where a corporate payment card that links each transaction to activity data and an emission factor adds real value, eliminating a manual collection process that can take months.

In France, the statutory GHG inventory (BEGES), governed by Articles R. 229-47 to R. 229-53 of the Environmental Code, requires certain organisations to quantify their emissions using this same framework: direct, indirect energy, and other indirect^[7].

At the European level, the CSRD (Corporate Sustainability Reporting Directive) goes further: its climate standard ESRS E1 requires in-scope companies (large companies and listed SMEs, on a phased timeline) to disclose their emissions across all three scopes in tonnes of CO₂ equivalent, provided they are material^[2]. For many organisations, Scope 3 reporting is now a legal obligation.

A single exercise feeds multiple frameworks: the Bilan Carbone® (internal strategy), the BEGES (French compliance), and CSRD/ESRS E1 (European reporting). The method is shared; only the format differs. This is why it makes sense to build one structured inventory organised by scope and category that can feed all three. The tools to get there are covered in our comparison of carbon footprint reduction solutions.

Double counting. A kilowatt-hour consumed by a subcontractor may appear in its Scope 2 and in the client's Scope 3. Without agreement on the boundary, totals become inflated. The GHG Protocol provides consolidation rules to limit this risk.

Chasing perfection too early. Trying to collect primary data across the entire Scope 3 in year one is unrealistic. A partial but honest assessment based on documented averages is far better than a project that stalls indefinitely.

Offsetting before reducing. Carbon offsetting only makes sense after a measurable reduction effort. Claiming carbon neutrality without having mapped your Scope 3 is a recipe for greenwashing accusations. For the link between sustainable finance and CSR, our analysis of the corporate card in the service of CSR rounds out the picture.