Scope 1, 2 and 3 emissions explained

Scope 1 is direct emissions from sources your company owns or controls, Scope 2 is emissions from the electricity (and other energy) you buy, and Scope 3 is every other indirect emission across your value chain. The GHG Protocol sets these definitions.

This article reflects the position as of November 2026. The definitions below are long established, but the GHG Protocol is revising its standards, and UK emission factors and reporting rules change from year to year.

Scope 1: direct emissions

The GHG Protocol Corporate Standard describes direct emissions as those from sources that are owned or controlled by the company. Its examples include emissions from combustion in owned or controlled boilers, furnaces and vehicles. If your company burns gas in its own heating system or runs its own fleet, those emissions are Scope 1.

Scope 2: purchased energy

Scope 2 accounts for emissions from the generation of purchased electricity that the company consumes. The GHG Protocol's 2015 Scope 2 Guidance extends the same idea to purchased steam, heat and cooling. The emissions physically occur at the power station, but you report them because you bought the energy.

Scope 2 can be reported in two ways. A location-based method reflects the average emissions intensity of the grids where your energy is used. A market-based method reflects the electricity you have deliberately chosen, through contractual instruments such as energy attribute certificates, direct contracts or supplier-specific rates. A company with operations in markets that offer this kind of data should report Scope 2 both ways and label each result by method.

Scope 3: everything else

Scope 3 is an optional reporting category in the Corporate Standard. It covers all other indirect emissions that are a consequence of the company's activities but come from sources it does not own or control. The Corporate Value Chain (Scope 3) Standard splits them into 15 categories.

The eight upstream categories are purchased goods and services, capital goods, fuel- and energy-related activities not in Scope 1 or 2, upstream transportation and distribution, waste generated in operations, business travel, employee commuting and upstream leased assets.

The seven downstream categories are downstream transportation and distribution, processing of sold products, use of sold products, end-of-life treatment of sold products, downstream leased assets, franchises and investments.

For many companies Scope 3 is the largest and hardest part to measure, because the data sits with suppliers and customers. This is one reason larger customers may ask smaller suppliers for emissions information.

UK emission factors

To turn activity data into emissions, UK companies commonly use the government's conversion factors. DESNZ published Greenhouse gas reporting: conversion factors 2026 on 11 June 2026 and updated it on 31 July 2026. The factors let you calculate and report emissions from your UK activities in 2026, with separate sets for Scope 1, 2 and 3. They apply to UK activities only.

The 2026 edition changed method. The UK electricity factor per kilowatt hour is down 26% on the 2025 edition. Because DESNZ cut the data lag from two years to one, that fall reflects two years of change in the grid. If your location-based Scope 2 figure drops, part of the fall may come from the method rather than from anything you did.

What UK companies must report

Streamlined Energy and Carbon Reporting (SECR) applies to UK-registered quoted companies, and to large unquoted companies and LLPs that exceed the statutory thresholds. Those thresholds are commonly summarised as meeting two of the following: more than 250 employees, more than £36 million turnover, and more than £18 million balance sheet total. Check the government's guidance for the exact test, which we have not confirmed.

DESNZ published an evaluation of the SECR regulations on 29 January 2026. The page announces no decision on changes.

What is changing

The GHG Protocol is revising Scope 2 and other standards. A public consultation on Scope 2 ran from 20 October 2025 to 31 January 2026, and a summary of the feedback was published on 29 July 2026. The final revised standard is reported to be expected no earlier than 2027. Until then the 2015 guidance still applies.

Where to start

Begin with Scope 1 and Scope 2, where you have the most control and data. Record your electricity both ways, then screen your Scope 3 categories to see which matter most for your business.

aida from Carbon Happy World is AI carbon accounting and ESG reporting software.