News and Insights


What are Scope 1, 2 & 3 emissions?

So, your company has understood that greenhouse gas emissions have to be reduced and that it's your responsibility to act? Great start! Now, how to reduce carbon emissions and what to measure? And have you heard about the different scopes that need to be reported? Relax, we'll guide you through it.


So, what is greenhouse gas emissions?

Greenhouse gas (GHG) emissions are emissions from any gas that contributes to the greenhouse effect. The most commonly discussed gas is carbon dioxide. Since the industrial revolution, the burning of fossil fuels has increased, directly correlating to the increase of carbon dioxide levels in the atmosphere and the rapid increase in global warming. Thereby, businesses must monitor and report their greenhouse gas emissions, and most importantly, reduce their footprint. To do so, according to the most widely used standard, the GHG Protocol Corporate Standard, a company's GHG emissions, sometimes called carbon footprint, are classified into three scopes:

  • Scope 1: Direct Emissions
  • Scope 2: Indirect Emissions – Owned
  • Scope 3: Indirect Emissions – Not Owned


Scheme explaining Scope 1, 2 and 3

Scope 1: Direct Emissions

  • These are direct emissions from company-owned and controlled resources.
  • They are further divided into four categories:
    1. Stationery Combustions such as fuels and heating sources
    2. Mobile Combustions such as vehicles owned or controlled by a company except for electric cars (falls under scope 2)
    3. Fugitive Emissions such as leaks from refrigerators and air conditioning units
    4. Process Emissions such as emissions released during industrial processes and on-site manufacturing

Scope 2: Owned Indirect Emissions

  • These are indirect emissions from the generation of purchased energy from a utility provider.
  • In simple words, all GHG emissions are released in the atmosphere from the consumption of purchased electricity, stream, heating, and cooling.

Scope 3: Not Owned Indirect Emissions

  • These emissions are all other indirect emissions that are not included in scope 2, coming from the company’s up and downstream value chain. Examples are emissions from the production of purchased goods and services, capital goods, and usage of sold products.
  • There are 15 categories under Scope 3 emissions.
  • This is the hardest scope to calculate and report. It is challenging to obtain the actual data from a company's full supply chains and demonstrate improvements on key GHG sources.

So, what are the upstream and downstream emissions?

Upstream Emissions: In simple words, this is emissions in the supply chain originated at suppliers' organizations.

Downstream Emissions: In simple words, downstream emissions happen after the service or product has left the organization for the next step in supply chain or for usage.

To sum up, image

Why measure all three scopes?

There are several benefits associated with measuring and reporting on all scopes. More than often, emissions along the value chain, in Scope 3, represent the most significant GHG impact. Some of the benefits of your company reporting these emissions are:

  1. Assess the emission hotspots in your supply chain
  2. Identify emission efficiency and cost reduction opportunities in your supply chain, leading to innovation, new products or services, and new sustainable business models
  3. Ensuring sustainability initiatives are directed to the most emission heavy part of your end-to-end operations

Your actions can have a significant environmental impact. Without voluntary business action, reducing GHG emissions is much more difficult. Measuring, reporting, and reducing emissions is challenging and time-consuming but not a mission impossible! Also, companies succeeding in reporting all three scopes gain a sustainable competitive advantage.

SustainLab has the perfect expertise to help your company reduce GHG emissions in each scope by using unique tools to calculate and recommend the best solutions for your company. Get in touch to understand how SustainLab will help your company in the path of zero-carbon transition!



Our priority is to solve the frustrations of our customers - to build solutions that matter most to them and their businesses. Our product significantly reduces the amnout of manual work and cost for sutainability reports while it increases the frequency and quality of sustainability disclosure.