Scope It Out: A Practical Guide to Emissions for SMEs
As climate commitments intensify, understanding your company’s carbon footprint is essential. The Greenhouse Gas (GHG) Protocol, the most widely used global standard for emissions accounting, breaks down emissions into three categories: Scope 1, Scope 2, and Scope 3. These scopes help businesses measure, manage, and reduce their environmental impact across the entire value chain.
Scope 1: Direct Emissions
Scope 1 covers greenhouse gas emissions from sources that a company owns or controls directly. These include:
Fuel combustion in company vehicles
On-site boilers, furnaces, or generators
Industrial processes (e.g. chemical production)
If your business burns fuel or operates machinery on-site, those emissions fall under Scope 1.
Scope 2: Indirect Energy Emissions
Scope 2 refers to emissions from the generation of purchased energy—typically electricity, heating, cooling, or steam. Although these emissions occur off-site (e.g. at a power plant), they result from your company’s energy consumption.
Reducing Scope 2 emissions often involves switching to renewable energy sources or improving energy efficiency.
Scope 3: Value Chain Emissions
Scope 3 includes all other indirect emissions that occur across your value chain—both upstream and downstream. These are often the largest and most complex to track. Examples include:
Business travel and employee commuting
Purchased goods and services
Waste disposal
Use of sold products
Transportation and distribution
There are 15 categories of Scope 3 emissions, and they vary widely depending on your industry. For many companies, Scope 3 accounts for the majority of their total emissions.
Why It Matters
Understanding all three scopes is critical for setting credible net zero targets, complying with reporting frameworks, and building trust with stakeholders. It also helps identify hotspots for reduction and innovation.
At Future Trust, we help SMEs identify and calculate emissions across all scopes, establish baselines, and design actionable strategies to reduce their footprint—turning complexity into clarity.
Source: GHG Protocol
