In the era of climate pledges and carbon neutrality goals, companies across the globe are stepping up to measure and reduce their greenhouse gas (GHG) emissions. But not all emissions are created equal and trying to address them with a single solution is like treating a fever, a broken bone, and a headache with the same medicine.

This is where the GHG Protocol comes in. It classifies emissions into three categories: Scope 1, Scope 2, and Scope 3 based on how directly they’re tied to an organization’s activities. Understanding these scopes is crucial because each one requires a fundamentally different strategy to manage and reduce emissions effectively. Complementing this, ISO 14064 provides internationally recognized standards for quantifying, monitoring, and reporting these greenhouse gas emissions, thereby strengthening the credibility and comparability of emissions data across organizations.

Adding further momentum to these efforts, India’s Ministry of Environment, Forest and Climate Change has introduced a GHG Emission Intensity Target Rule under the draft Carbon Credit Trading Scheme. This rule mandates specific sectors and companies to reduce their emissions per unit of economic output, reinforcing the shift toward low-carbon growth. The aim is to set intensity-based reduction targets, ensuring that as companies grow, their emissions don’t grow at the same rate. Read the draft rule here.

Why Are Emissions Categorized into Scopes?

The GHG Protocol, the world’s most widely used carbon accounting standard, introduced the concept of scopes to help organizations systematically measure their emissions and identify who is responsible for what in a value chain.

This categorization helps:

- Avoid double counting of emissions between companies

- Clarify accountability and influence

- Guide companies on where to act and how

The Three GHG Scopes as per GHG Protocol and alignment with ISO 14064 (With Examples)

Scope 1 Emissions: What You Directly Control

i. Scope 1 emissions are the direct greenhouse gas emissions that come from sources you own or control. These are emissions that are physically released from your operations.

ii.  Sources include fuel utilised by company-owned vehicles, diesel used in backup generators, natural gas used in industrial boilers, or emissions from chemical processing equipment.

iii. Organization has full control over these emission sources how much fuel is used, which equipment runs, and how operations are managed.

iv. Emission Reduction Strategy: Operational efficiency + low-carbon technology

-   These emissions can be reduced by changing how company’s own operations work, that is, through operational changes, equipment upgrades, or fuel substitutions.

- Companies can tackle Scope 1 emissions through actions like improving energy efficiency in facilities, switching to electric or hybrid company vehicles, using cleaner fuels (like biogas or hydrogen), or upgrading machinery and processes that  are less emission-intensive.

Scope 2 Emissions: What You Buy

i. Scope 2 emissions are indirect emissions that result from the generation of electricity, steam, heating, or cooling that your company purchases and uses.

ii. While your office, factory, or store consumes electricity, the emissions actually occur at the power plant where that electricity is generated especially if it's powered by coal, oil, or natural gas.

iii. The company don’t own the power plant, but can decide what kind of energy to purchase and how much. So, it has partial control.

iv. Emission Reduction Strategy: Smarter procurement + infrastructure

- These emissions are reduced by choosing cleaner energy sources and managing consumption. 

- Company can cut Scope 2 emissions by sourcing renewable energy, such as solar or wind, through green energy contracts or Power Purchase Agreements (PPAs). It can also install onsite solar systems, or buy renewable energy certificates (RECs). Improving energy efficiency in buildings also helps reduce how much electricity you need.

Scope 3 Emissions: What Happens in Your Ecosystem

i. Scope 3 emissions include all other indirect emissions that occur outside company’s direct operations but are still linked to your business across value chain.

ii. This could include emissions from the production of goods you purchase (like steel or packaging), emissions from transporting products to market, employee travel, how products are used by customers, and even how they’re disposed of.

iii. Company don’t own these emission sources but they exist because of your business activities. So, while company don’t control them directly, it can influence them.

iv. Emission Reduction Strategy: Value chain collaboration + product innovation

-  Reducing these emissions requires deep engagement, cross-sector collaboration, product redesign, and behavioural shifts none of which can be achieved through internal operational changes alone.

- Scope 3 emissions require a collaborative approach. The company can work with suppliers to choose low-carbon materials, redesign products to use fewer resources or last longer, encourage customers to use products more efficiently, and partner with logistics providers using electric fleets. In short, a need to reshape the value chain.

Conclusion:

Since, all GHG emissions contribute to climate change, their sources, ownership, and levers for reduction (strategies) are fundamentally different depending on the scope, as discussed above. That’s why a single, uniform strategy like buying offsets or switching to renewable electricity cannot solve the entire emissions problem.

Each scope requires a different lens of accountability and a different lever of change:

a) Scope 1 → Control Scope 1 emissions are all about operational control. Company can reduce them by changing how operations function, whether that means switching technologies, upgrading infrastructure, or improving maintenance practices.

b) Scope 2 → Influence over procurement Scope 2 emissions are managed through procurement and sourcing decisions. Company can reduce them by changing where and how it gets electricity, and by reducing how much is utilised in the first place.

c) Scope 3 → Influence over relationships and ecosystems With Scope 3, power lies in influence and collaboration. Company can reduce these emissions by working closely with suppliers, customers, logistics partners, and even consumers to shift the behaviour and choices across the entire value chain.

If companies apply a one-size-fits-all approach say, only focusing on energy efficiency or only buying offsets they’ll likely overlook major emission hotspots, misallocate resources, and fall short of making meaningful climate progress.

References

1.   https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf