Why talk about "scopes" for carbon emissions?
When a company publishes its carbon assessment or climate commitments, it almost always mentions the terms "Scope 1," "Scope 2," and "Scope 3." These three categories structure the international approach to greenhouse gas emissions accounting for organizations. They were defined in the GHG Protocol (Greenhouse Gas Protocol), the global carbon accounting framework developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) — and since adopted by virtually all climate standards and regulations, including the European CSRD.
Understanding these three scopes has become essential not only for CSR and sustainability professionals, but also for any citizen wishing to assess the sincerity of companies' climate commitments. Because behind the technical terminology lie considerable strategic issues.
Scope 1: emissions the company directly controls
Scope 1 covers all GHG emissions generated directly by the company's activities. These are the sources over which the organization has direct and immediate control.
Concrete examples of Scope 1
- Combustion of natural gas in the company's building boilers
- Fuel consumed by the company-owned vehicle fleet (delivery trucks, company cars)
- Emissions from industrial equipment (furnaces, compressors) running on fossil fuels
- Refrigerant gas leaks (HFCs) from air conditioning and refrigeration systems
- Methane emissions from livestock (for agricultural companies)
- Emissions from incinerators or waste treatment facilities owned by the company
Order of magnitude
Scope 1 generally represents 5 to 30% of the total emissions of an industrial company. For a services company (banking, insurance, consulting), this figure can drop below 5%, with most of the impact sitting in Scopes 2 and 3.
Scope 2: emissions linked to purchased energy
Scope 2 covers indirect emissions linked to the company's consumption of purchased energy: electricity, heat, steam, or cooling. These emissions are "indirect" because they are physically produced at the energy supplier's facilities, but are directly linked to the company's demand.
Concrete examples of Scope 2
- Electricity consumed in offices, warehouses, and factories
- Heat purchased from a district heating network
- Steam used in industrial processes, produced by a third party
- Cooling purchased for cold storage warehouses
The importance of the electricity mix
The carbon intensity of Scope 2 varies considerably depending on the country where the company operates, based on the national electricity mix. In France, thanks to nuclear power, the carbon intensity of electricity is approximately 55 g CO2/kWh — one of the lowest in Europe. In Germany or Poland, this figure can exceed 400 g CO2/kWh. This difference can multiply a company's Scope 2 footprint by 7 between the two countries.
The "location-based" vs. "market-based" distinction
The GHG Protocol distinguishes two methods for calculating Scope 2:
- Location-based: uses the average electricity mix of the national grid
- Market-based: takes into account green electricity contracts or Guarantees of Origin (GOs) purchased by the company
If a company purchases electricity with renewable origin guarantees, its market-based method can show a Scope 2 close to zero — which explains why many companies claim "100% green" electricity while operating on a partially carbon-intensive grid.
Scope 3: the real challenge — and the real issue
Scope 3 is by far the most complex, most contested, and most important of the three scopes. It covers all indirect emissions not covered by Scopes 1 and 2, meaning all emissions generated by the value chain upstream and downstream of the company.
"Scope 3 is the hidden truth of the carbon assessment. Ignoring Scope 3 is like evaluating a smoker's impact without counting the cigarettes they buy."
— Paul Dickinson, founder of CDP (Carbon Disclosure Project)
The 15 categories of Scope 3
The GHG Protocol defines 15 categories of Scope 3, divided into upstream and downstream activities:
Upstream:
- Category 1: Purchased goods and services
- Category 2: Capital goods
- Category 3: Fuel- and energy-related activities (not included in Scopes 1 and 2)
- Category 4: Upstream transportation and distribution
- Category 5: Waste generated in operations
- Category 6: Business travel
- Category 7: Employee commuting
- Category 8: Upstream leased assets
Downstream:
- Category 9: Downstream transportation and distribution
- Category 10: Processing of sold products
- Category 11: Use of sold products
- Category 12: End-of-life treatment of sold products
- Category 13: Downstream leased assets
- Category 14: Franchises
- Category 15: Investments (particularly crucial for the financial sector)
Why is Scope 3 so important?
On average, Scope 3 represents 70 to 90% of a company's total emissions. For some sectors, this ratio is even higher:
- Automotive: 85-95% (use of sold vehicles)
- Finance and banking: 95-99% (emissions from financed investments and loans)
- Food and agriculture: 80-90% (upstream agricultural production)
- Clothing and textiles: 75-85% (manufacturing and end-of-life of garments)
To understand how these categories apply concretely to a corporate strategy, our article on carbon offsetting and corporate obligations in 2025 details the regulatory and strategic implications of Scope 3 in the context of the CSRD.
Measuring Scope 3: the methodological challenges
The complexity of Scope 3 stems from several factors:
- Dependence on supplier data: to measure Category 1 (purchased goods and services), emission data must be obtained from each supplier — often hundreds or thousands of companies
- Double counting: one company's Scope 3 is often another company's Scope 1 or 2, creating risks of duplication in aggregate counts
- Estimation uncertainty: lacking precise data, average sector emission factors are used, introducing significant margins of error
- Variability over time: the supplier mix changes, processes evolve — Scope 3 must be recalculated regularly
Scope 3 and regulation: what the CSRD requires
Since 2024, the CSRD directive requires large European companies to report their Scope 3 emissions according to ESRS (European Sustainability Reporting Standards) norms. This obligation will gradually extend to listed SMEs and subsidiaries of non-European groups. The stakes are considerable: for the first time, companies will be required to justify their Scope 3 declarations before an independent auditor.
How to reduce Scope 3: available levers
Reducing Scope 3 requires action across the entire value chain, which implies close collaboration with stakeholders:
- Upstream: select low-emission suppliers, integrate climate clauses into procurement contracts, support suppliers in their decarbonization
- Internal: reduce business travel (prefer video conferencing, train), promote remote work, raise employee awareness of climate issues
- Downstream: design more durable and energy-efficient products, develop repair and refurbishment offerings, optimize distribution logistics
- For financial institutions: direct investments and credit portfolios toward low-emission sectors, adopt exclusion policies for the most carbon-intensive activities
To put these figures into the context of the average French person's carbon footprint, our analysis of the French carbon footprint in 2024 will give you useful comparison data.
Conclusion: scopes, an imperfect but essential framework
The Scope 1, 2, 3 framework is not perfect: it has blind spots, risks of double counting, and real methodological difficulties. But it currently constitutes the most robust common language for measuring and comparing organizational emissions on a global scale. For companies and investors alike, mastering these three scopes is no longer optional: it is the sine qua non of a credible climate strategy, audited and aligned with ever-increasing regulatory requirements. And for citizens, it is an essential lens for assessing the sincerity of the climate commitments of those who sell us their products, their services — and their good intentions.