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Your carbon footprint calculation is probably incomplete—and your company doesn’t even know it. Whilst Scope 1 and 2 emissions feel straightforward, Scope 3 is silently inflating your true environmental impact. The uncomfortable truth? Most organisations are measuring less than half their actual emissions. Learn where your hidden carbon really hides and why ignoring it could cost you more than compliance.
What Are Scope 1, 2, and 3 Emissions?
When you break down your company’s carbon footprint, you’re really looking at three distinct buckets. That’s it. Three. The GHG Protocol established this structure back in 2001, and it’s now the world’s most widely used greenhouse gas accounting standard.
Your emissions inventory falls into direct and indirect categories. Boundary setting matters here. Scope 1 covers what you own and control directly. Scope 2? That’s your purchased energy. Scope 3 gets messy—it’s everything else in your value chain. For most companies, Scope 3 accounts for around 90% of their total emissions, making it the largest piece of the puzzle. An energy audit can help identify where direct emissions originate within your operations.
Here’s the deal with carbon reporting: Scopes 1 and 2 are mandatory. Scope 3 remains optional, though it’s recommended. Why? Because your product footprint extends way beyond your four walls. We’re talking suppliers, employee commutes, even how customers dispose of your stuff. The nebulous nature of Scope 3 has created significant uncertainty and debate amongst reporting organisations and governmental entities like the SEC. Implementing advanced tools for real-time energy usage tracking can help organisations accurately measure and reduce their emissions across all scopes.
How to Calculate Scope 1, 2, and 3 Emissions
Knowing what falls into each scope is one thing. Actually measuring it? That’s where things get real.
For Scope 1, you’re looking at fuel metering—tracking every drop of petrol, diesel, or natural gas burnt on-site. Multiply that by emission factors. Done.
Scope 2 gets interesting. You’ve got two methods:
| Method | What It Measures | Best For |
|---|---|---|
| Location-based | Average grid emissions | General reporting |
| Market-based | Your actual energy contracts | Contract tracking |
For location-based calculations, regional emission factors depend on renewable energy percentages and can be found in eGRID databases. Aligning your emissions measurement processes with ISO standards strengthens the reliability of your reported data. Integrating energy data and monitoring systems ensures comprehensive tracking of your Scope 2 emissions across all operational sites.
Scope 3? It’s the beast. Spend-based, supplier-specific, hybrid—pick your poison. The spend-based method estimates emissions using industry averages and emission factors applied to the economic value of purchased goods and services. The supplier-specific approach delivers the sharpest data, but it requires chasing down information from your entire value chain. Time-consuming? Absolutely. Worth it? That depends on how serious you are about pinpointing where your biggest emission culprits hide.
What Makes Scope 3 Emissions So Hard to Track?
Because your supply chain stretches across dozens—sometimes hundreds—of suppliers scattered around the globe, getting accurate emissions data feels like herding cats. Each supplier uses different calculation methods. Different emission factors. Different reporting standards. Good luck comparing any of it.
Here’s the kicker: most of your suppliers, especially smaller ones, don’t even have the technical setup to measure their emissions properly. So you’re stuck chasing data that barely exists.
Supplier engagement becomes your lifeline here. Without direct relationships deeper in your supply chain, you’re flying blind. And data governance? It’s a mess. You’ve got information pouring in from multiple sources, formats, and reporting periods. Implementing smart metres and submetres across your supplier network can provide the comprehensive data capture needed to identify emissions patterns and inefficiencies.
The reality is brutal: Scope 3 tracking demands constant monitoring because suppliers change, products evolve, and routes shift. Nothing stays still. Working with partners who employ real-time monitoring tools can help you gain visibility into supplier emissions and identify optimisation opportunities across your extended value chain.
