Scope 1, 2 and 3 for a company your size

What are Scope 1, 2 and 3 emissions, in plain terms?

The Greenhouse Gas Protocol, the standard almost every company reports against, splits a company's emissions into three groups by where they happen. Scope 1 is what you burn yourself: gas in the boiler, diesel in the vans, fuel in a forklift. Scope 2 is the energy you buy and use on site, mainly electricity. Scope 3 is everything else that happens because your business exists: the goods you buy, the freight you pay for, staff travel, waste, and what happens to your products after you sell them. The GHG Protocol's Scope 3 Standard is the source, and its FAQ is readable without a background in the subject. Many governments also publish a plain guide to the three scopes in their own language, such as Spain's Guía para el cálculo de la huella de carbono and Japan's supply chain emissions guidelines, both free.

What does each scope look like for a business like mine?

For most manufacturers and distributors, Scope 3 is the largest of the three, because it holds everything you buy. For a services firm it is often smaller than Scope 2. Either way, Scope 1 and 2 are the ones you can measure from your own bills, which is why customers ask for those first.

Which scopes is my customer asking me for?

Scope 1 and 2 at first, almost always. They are yours to measure, the data is in your energy and fuel bills, and a free calculator turns them into a figure in an afternoon. Scope 3 is asked for later, and usually only the large categories (what you buy and how it travels). If a request lists all three, it is fine to supply Scope 1 and 2 now and give a date for Scope 3.

Your customer will accept: Scope 1 and 2 from last year's bills, with a note on which Scope 3 categories matter for your business and when you will estimate them.

Why does my customer care which scope my emissions are in?

Because your emissions land in a different place in their accounts. Everything you emit, in all three of your scopes, sits inside your customer's Scope 3, in the category for purchased goods and services. When you cut your Scope 2 by switching to renewable electricity, their Scope 3 falls. That is why they want your own figure rather than an industry average: an average for your sector never changes when you do.

Do I need to measure all of Scope 3?

Not to start, and most small companies never measure all fifteen categories the GHG Protocol lists. Pick the two or three that are clearly largest for your business, usually purchased goods, freight and staff travel, estimate those, and say which ones you have left out. A customer prefers a Scope 3 figure with its boundaries stated to a complete-looking one nobody can explain.

What is the difference between an estimate and a measurement?

An estimate applies an industry-average emission factor to something you know, such as spend or the number of vans. A measurement uses what you actually consumed: kilowatt hours, litres, tonnes. For Scope 1 and 2, measurement is easy because the bills carry the consumption. For Scope 3, most companies start with industry-average estimates and replace them, category by category, with their suppliers' own figures and measured activity data. The guide on moving from estimates to measured data covers how.

Do this week: pull last year's electricity bills and fuel receipts into one folder and write down the totals in kWh and litres. That is the input for your Scope 1 and 2 figure, and the next guide turns it into a number.

What should I do next?

Read a first footprint from your bills and records, which walks through the calculation with a free tool. If your customer uses DitchCarbon, your profile already shows a figure built from what you have published and from industry data; once you have your own Scope 1 and 2 numbers, you can claim it and replace them.