Scope 1, 2 and 3 Emissions Explained (With UK Examples)

Almost every conversation about carbon reporting, whether it starts with SECR, a tender, or a board paper, comes back to the same three words: Scope 1, Scope 2 and Scope 3. They are the framework the GHG Protocol and the UK government’s environmental reporting guidelines use to sort a company’s greenhouse gas emissions into categories, and understanding them is the difference between a report you can defend and a set of numbers you cannot explain. This guide sets them out in plain English, with UK examples, and is honest about the part everyone finds hardest.

The three scopes at a glance

The scopes are a way of drawing a boundary around who is responsible for which emissions:

• Scope 1 — direct emissions from sources you own or control.
• Scope 2 — indirect emissions from the energy you buy and consume.
• Scope 3 — all other indirect emissions across your value chain, both upstream and downstream.

The logic runs from what is closest to your control outwards. Scope 1 is what comes out of your own equipment. Scope 2 is the emissions that happened elsewhere to make the energy you then used. Scope 3 is everything else that your business causes but does not own — and for most companies it is the biggest number by a wide margin. Let us take each in turn.

Scope 1: direct emissions from what you own or control

Scope 1 covers greenhouse gases released directly from sources your business owns or controls. In practice, for a UK company, that usually means:

• Gas burned on site — the natural gas in your boilers and heating plant.
• Fuel used in your own vehicles — the diesel or petrol in a fleet you own or lease.
• Other on-site combustion — process heat, on-site generators, certain industrial reactions.
• Fugitive emissions — refrigerant leaks from air-conditioning and cooling systems, for example.

The defining test is control: if the emission comes out of a chimney, an exhaust pipe or a leaking system that you operate, it is Scope 1. This is the number that renewable electricity cannot touch — buying green power does nothing for the gas in your boilers — which is why decarbonising Scope 1 usually means efficiency and electrification (heat pumps replacing gas heating, an electric fleet replacing diesel) rather than a change of energy tariff.

Scope 2: indirect emissions from the energy you buy

Scope 2 covers the indirect emissions from energy your business purchases and consumes — principally purchased electricity, and also purchased heat, steam and cooling. The emissions do not happen at your site; they happen at the power station or the heat network that generates the energy you then draw. But because you caused the demand, they are counted as yours.

Scope 2 has a wrinkle that trips people up: it is reported as two figures, under the GHG Protocol’s dual Scope 2 method.

• The location-based figure applies the average emissions intensity of the grid you draw from. It reflects the physical electricity system, regardless of what you have contracted for.
• The market-based figure reflects the specific electricity you have procured — a renewable tariff, an on-site solar array, or a power purchase agreement (PPA).

Both matter, and the honest practice is to report both rather than cherry-picking the lower one. This is also the only scope where buying renewable electricity moves the needle: an on-site solar array or a well-structured PPA reduces your market-based Scope 2 figure. It does not change your location-based figure, and — critically — it does nothing for Scope 1 or Scope 3. We treat that honestly in our net-zero roadmap, and the full nuance of what solar does and does not count towards is worked through in our does solar count towards net zero guide.

The stat most people miss: Scope 2 is not one number but two — a location-based figure using the average grid, and a market-based figure reflecting the electricity you actually contracted for. A single Scope 2 figure with no method stated is worth questioning.

Scope 3: the value chain — and the hard part

Scope 3 is every other indirect emission across your value chain that you do not own or control. It is split into fifteen categories under the GHG Protocol Corporate Value Chain (Scope 3) Standard, spanning both what happens upstream of your business and what happens downstream:

• Upstream — purchased goods and services, capital goods, fuel-and-energy-related activities, upstream transport and distribution, waste generated in operations, business travel, employee commuting, and upstream leased assets.
• Downstream — downstream transport and distribution, processing of sold products, use of sold products, end-of-life treatment of sold products, downstream leased assets, franchises and investments.

Two things make Scope 3 the defining challenge of corporate carbon accounting. First, it is usually the largest part of the footprint — often the great majority of it. For a manufacturer, purchased goods and inbound logistics tend to dominate; for a services firm, it is more likely purchased services, business travel and data-centre use; for a retailer, the use and end-of-life of sold products. Second, you do not hold the data. Scope 1 and 2 come from your own meters and invoices, but Scope 3 lives in your suppliers’ operations and your customers’ behaviour, and suppliers do not readily hand it over.

That is exactly why competitors either ignore Scope 3 or pretend it is easy, and why neither is honest. The workable approach is a pragmatic one: start with spend-based estimates to find the hotspots — the handful of categories that dominate the number — then replace those estimates with supplier-specific data where it genuinely moves the figure and the risk, rather than trying to boil the ocean across all fifteen categories at once. That prioritised method is the substance of our Scope 3 and supply-chain emissions service.

Why Scope 3 is a tender problem, not just a reporting one

Here is the part that turns Scope 3 from an accounting exercise into a commercial one: your Scope 3 is your customer’s Scope 3. When a large company measures its own value-chain emissions, the goods and services it buys from you sit inside its footprint. So the moment your customer starts reporting Scope 3 — or bidding for a public contract that demands a carbon plan — it turns to its suppliers, including you, and asks for a footprint and a reduction plan.

That is why Scope 3 is the category most large customers and public-sector buyers now probe. It is not driven primarily by the letter of the law — there is no minimum legal requirement to report Scope 3, though entities within TCFD-aligned disclosure must report material Scope 3 information. It is driven by the supply chain: a supplier that cannot give a credible Scope 3 position increasingly loses work to one that can. For the detail of what buyers actually ask for, our ESG for tenders and PQQs page sets out the requirements, including the Carbon Reduction Plan that major central-government contracts now demand.

How the three scopes fit together in a real footprint

A complete carbon footprint is a greenhouse gas inventory that measures all three scopes for a chosen base year, built to the GHG Protocol Corporate Standard. The process runs in a sensible order:

1. Set the boundary — which entities, sites and activities are in scope, and which reporting approach the group uses.
2. Gather Scope 1 and 2 activity data — electricity, gas and fuel consumption from your meters and invoices — and convert it to tonnes of CO2 equivalent using the UK government greenhouse gas conversion factors for company reporting.
3. Calculate both Scope 2 figures — location-based and market-based.
4. Screen Scope 3 — a spend-based pass across the fifteen categories to find the hotspots, then supplier-specific data where it matters.

The output is your total footprint, an intensity ratio and a clear view of where the emissions actually sit — which is what any credible target or roadmap is then built against. Done properly once, that baseline feeds your SECR disclosure, your science-based target and your net-zero plan without being rebuilt each year. The way a baseline is constructed, step by step, is set out in our carbon footprint and baseline service.

One honest note on delivery: because Scope 2 is the only scope a renewable-energy measure can reduce, the decarbonisation levers that touch it — on-site solar, a PPA — are genuine but partial. Where a commercial installation is the right measure, it is delivered work in its own right; renewable-energy specialists such as EC Eco Energy handle that side, while the honest accounting of what it counts towards stays inside the reporting. The point is never to dress a solar array up as a whole carbon strategy when it only addresses one part of one scope.

Where the scopes sit in the wider picture

Understanding the three scopes is the foundation for the whole of ESG reporting, because almost every duty is expressed in their terms. SECR requires your Scope 1 and 2 emissions in your annual accounts; TCFD-aligned disclosure and the emerging UK SRS expect material Scope 3; a Carbon Reduction Plan for a public tender has to state your footprint across the scopes it covers. If you are still working out whether any of that applies to you, our who has to report under SECR guide sets out the thresholds precisely, and the do I need to report under SECR page walks the decision through.

The scopes also anchor the regional picture. A company’s Scope 2 depends on the grid its sites sit on, and its Scope 3 on the supply chain and the local buyers pressing for a carbon plan — which is why our regional pages, from ESG compliance in Manchester to the wider locations we cover, set the scopes against genuinely local net-zero policy and grid context.

Get your emissions measured properly

Measuring Scope 1, 2 and 3 correctly, once, on the UK government conversion factors, is what gives you a footprint you can put in a disclosure, in front of a board, or into a tender — and defend if it is challenged. We build that baseline as a piece of delivered work, prioritised so effort goes where the emissions actually are rather than spread thin across categories that barely register.

If you would like a scoped read on your own footprint — which scopes you have to report, where your Scope 3 hotspots are likely to sit, and what a credible baseline would take — book an ESG readiness call and we will reply within one working day. To go deeper first, start with our carbon footprint and baseline service, the Scope 3 and supply-chain hub, or the full ESG reporting and compliance programme.

Methodology and government sources, verified 2 July 2026: the GHG Protocol Corporate Standard, the UK government’s environmental reporting guidelines, and the UK government greenhouse gas conversion factors for company reporting.