Scope 1, 2 and 3 emissions: what each covers, with examples from Indian operations

Every greenhouse gas inventory sorts emissions into three scopes. The idea comes from the GHG Protocol Corporate Standard¹. IFRS S2 requires it for measurement unless a jurisdiction requires otherwise⁸, ESRS and CDP build on it, and BRSR's GHG indicators refer to it. The scopes exist so that two companies never count the same tonne as their own direct emission — and so that a reader can see which emissions a company controls and which it influences.

What is Scope 1?

Scope 1 is direct emissions: those from sources the company owns or controls. The Corporate Standard gives combustion in owned or controlled boilers, furnaces and vehicles as examples, and emissions from chemical production in owned process equipment¹.

In an Indian plant or office, Scope 1 usually includes:

• Fuel burned on site: diesel in DG sets, furnace oil or coal in boilers, natural gas or LPG in furnaces and canteens.
• Company-owned or leased vehicles: fuel in trucks, forklifts and staff cars the company controls.
• Process emissions: CO₂ released by chemical reactions rather than combustion — calcination of limestone in cement and lime, for example.
• Fugitive emissions: refrigerant leaks from air-conditioning and chillers (HFCs), SF₆ from switchgear, methane from waste water treatment.

What counts as "owned or controlled" depends on the company's organisational boundary — whether it consolidates by operational control, financial control or equity share — which the Corporate Standard asks the company to choose and apply consistently¹.

What is Scope 2?

Scope 2 is indirect emissions from the generation of purchased or acquired electricity, steam, heat or cooling consumed by the company². The emissions physically happen at the power station, but they are a consequence of the company's consumption, so they are reported separately from Scope 1.

Location-based and market-based

Since the Scope 2 Guidance of 2015, a company with operations in markets where it can buy specific electricity — renewable energy certificates, green tariffs, power purchase agreements — reports Scope 2 two ways²:

• Location-based: the average emission intensity of the grid where the electricity is used.
• Market-based: the emissions of the electricity the company has chosen to buy, through contractual instruments that meet the Guidance's quality criteria.

The CEA factor covers CO₂ only, and CEA publishes it for planning and analysis rather than prescribing it for corporate inventories⁵. Note also that the factor changes every year — 0.727 for FY 2023-24, 0.710 for FY 2024-25 — and each year's factor appears months after the year ends, so use the latest one available when you report and state which year it is.

What is Scope 3?

Scope 3 is all other indirect emissions — those that are a consequence of the company's activities but occur from sources it does not own or control¹. The Scope 3 Standard divides them into 15 categories³:

For most manufacturers, category 1 (purchased goods) is the largest; for makers of vehicles, appliances and fuels, category 11 (use of sold products) can dwarf everything else; for banks, category 15 (investments — financed emissions) dominates. A company reporting Scope 3 under the standard accounts for all categories and discloses and justifies any it excludes³.

Which gases are included?

Seven: carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF₆) and — since a 2013 amendment — nitrogen trifluoride (NF₃)⁴. Each is converted to carbon dioxide equivalent (CO₂e) with its global warming potential; our guide to calculating emissions from activity data shows how.

What does BRSR ask for?

• Scope 1 and Scope 2 emissions, and their intensity, are essential indicators under Principle 6 — and part of BRSR Core's GHG footprint, which must be assessed or assured⁷.
• Scope 3 emissions and their intensity are asked for as a leadership indicator under Principle 6, which is voluntary⁷.

Under the ISSB's IFRS S2, by contrast, Scope 3 is required (with relief in the first year), and location-based Scope 2 is the required basis⁸. The frameworks compare in GRI, ISSB and ESRS compared.

Is the GHG Protocol changing?

Yes, but slowly. The GHG Protocol is revising its standards as one Corporate Standard version 3.0, to be co-branded with ISO. Its July 2026 plan expects a consolidated draft for consultation around the second quarter of 2027 and publication around the fourth quarter of 2028, with no effective date set yet⁶. Proposals for Scope 2 — such as hourly matching of renewable electricity — drew low support in the 2025-26 consultation and are still being worked on. Until a new version is published and in force, the 2004 Corporate Standard, the 2011 Scope 3 Standard and the 2015 Scope 2 Guidance apply.

How ESGTrack helps

ESGTrack builds the inventory from the activity data your sites approve: Scope 1 from fuel logs reconciled against stock checks and from refrigerant records, Scope 2 both location- and market-based from meters and bills with renewable certificates recorded beside them, and Scope 3 by category, starting from spend and improving with activity and supplier data. Every result keeps the factor, its source and the month it applied. See carbon accounting in ESGTrack.