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History of Scope 1, 2 & 3

The terms "Scope 1, 2, and 3" are thrown around a lot these days, but have you ever wondered where they came from? 

In the early 2000s, organizations needed a clear way to measure and manage their emissions. Enter the Greenhouse Gas Protocol (GHG Protocol) – a collaboration between the World Resources Institute and the World Business Council for Sustainable Development.

Their solution? Break down emissions into three clear categories: Scope 1, 2 and 3. Since 2001, these terms have become the global standard for emissions reporting. Think of them as different layers of responsibility for your carbon footprint.

Scope 1 emissions

Scope 1 covers the emissions you control directly. You can think of it being your facility’s immediate carbon footprint. Here are some examples:

• Combustion of fossil fuels: This is about any fuel you burn on-site. Maybe that’s natural gas in your boilers or fuel in your owned company vehicles. Just keep in mind we’re not talking about emissions associated with fuel extraction, refining, or transportation (that’s covered in Scope 3).
  
  
• Industrial processes: Any manufacturing processes that release greenhouse gases directly. For example, chemical reactions as a result of your own operations.
  
  
• On-site waste management: Emissions that occur from the decomposition of organic waste as well as from waste treatment and disposal practices. Keep in mind treatment of waste falls under Scope 3 as you purchase external waste management services.
  
  
• On-site refrigeration and air conditioning: Emissions from refrigerants used in on-site cooling and air conditioning systems. These chemicals are potent greenhouse gases.  

A simple rule is that if you own it or control it, it’s Scope 1. This covers everything from energy use to agriculture – as long as it’s under your direct control.

Scope 2 emissions

Think of Scope 2 as your “bought energy footprint.” It includes all the energy you buy, such as electricity, heating, or cooling. While these emissions happen elsewhere (like at power plants) they’re still connected to your organization. Let’s break it down: 

• Purchased electricity: This is the big one – all the emissions from generating the electricity you buy. Every time you flip a switch, you're tapping into this category. 
  
  
• Purchased steam, heating, and cooling: If you're buying heat or cooling from someone else (like district heating), then those emissions count in Scope 2.

Market vs. location-based calculations

When calculating your Scope 2 emissions, you've got two options:

The market-based approach looks at the specific energy choices you've made. Have you bought renewable energy credits (RECs)? Signed power purchase agreements (PPAs)? This method takes these choices into account. If you've chosen green energy, your emissions factor might even be zero. Your energy supplier will provide the right emissions factor based on what you’ve purchased, which is what you’ll need for Scope 2 calculations.

The location-based method is simpler: it uses the average emissions from your local electricity grid. While this method is straightforward, it might not show off your cleaner energy investments and may not represent your sustainability initiatives fully. It's like using the average of your neighborhood instead of your own specific choices. Easier, but less representative.

Choosing the right approach in Manufacture 2030

By default, Manufacture 2030 (M2030) uses a hybrid approach. Most organizations will start with the location-based method, as it is an easier way to get going. 

If you’re already a seasoned sustainability pro, you have the option to enter market-based information (such as renewable energy credits or power purchase agreements).

If you are interested in understanding how M2030 calculates your Scope 1 and 2 emissions at a facility-level, check out this article.

Scope 3 emissions

Scope 3 is the biggest piece in the carbon footprint puzzle. It covers everything else in your value chain; from the materials you buy to what happens to your products after they leave your facility. Think of it as your “indirect impact zone.”

💡 Heads up: Scope 3 is the trickiest to measure because there's so much to track.

To make it easier, Scope 3 splits into two directions: upstream (everything before your operations) and downstream (everything after).

At Manufacture 2030, we estimate emissions from upstream activities only because they make up a large part of a product’s carbon footprint and are within your control. Targeting these emissions helps you reduce your impact more effectively. While downstream activities like product use and disposal are important too, they vary widely and are harder to measure or influence directly.

Here are the main upstream Scope 3 sources you'll need to think about:

• Materials: This covers everything that goes into making your products – from raw material extraction to processing. It's all part of what we call “purchased goods and services.”
  
  
• Transportation: How do materials get to your facility? All those emissions from trucks, ships, or planes count here.
  
  
• Off-site waste: Any waste that leaves your site for treatment elsewhere. (Remember: if you're treating waste on-site then it comes under Scope 1).
  
  
• Energy-related activities: What happens before the energy reaches you? The mining of coal, drilling for oil, or processing of natural gas. All these activities create emissions before the energy even gets to your facility.

Check your knowledge

Time to see if it all makes sense! Take the quiz to check your understanding:

If your customers have asked you to complete M2030's Product Carbon Footprint Academy, taking this quiz will show them you're making progress. Your answers and scores will not be shared with them – only that you have taken the quiz.

📂 Free downloads

• Lesson 1 - Scope 1, 2 & 3 Emissions.pdf1000 KB