Carbon accounting has its own vocabulary, and "scope" is ground zero for it. The GHG Protocol splits a company's emissions into three scopes, and once you understand the split, most of the rest of the field starts to make sense.

Scope 1: What You Burn Directly

These are emissions from sources your company owns or controls outright. Think natural gas burned in a boiler on-site, fuel burned in company vehicles, or refrigerant slowly leaking out of an aging AC unit. If your company physically caused the emission, it's Scope 1.

Scope 2: What You Buy to Power the Place

This covers the emissions embedded in purchased electricity, steam, heating, and cooling. It's indirect (you didn't burn anything yourself), but it's still tightly linked to your own operations. One wrinkle worth knowing: the GHG Protocol requires dual reporting here, meaning you calculate it two ways. Location-based uses average emissions for your regional grid. Market-based reflects the actual contracts you've signed: power purchase agreements, renewable energy certificates, and so on. The two numbers can look quite different for the same company.

Scope 3: Everything Else

This is the big one, and it's where most companies' true footprint actually lives. It covers every other indirect emission across the value chain, split into 15 categories:

• Upstream (categories 1–8): purchased goods, capital goods, fuel and energy activities, transportation, waste, business travel, employee commuting, leased assets
• Downstream (categories 9–15): distribution, processing of sold products, product use, end-of-life treatment, leased assets, franchises, investments

For most companies, this single scope accounts for somewhere between 70 and 90 percent of total emissions, and it's by far the hardest to pin down since much of the data lives with suppliers rather than in-house.

Why This Matters Under CSRD

ESRS E1 requires disclosure of all three scopes, with Scope 3 broken out by category rather than reported as a single lump figure. That level of granularity demands systematic data collection stretching well beyond your own four walls, which is precisely the workflow we automate at BUME from invoice parsing through to a final category-level CO₂e figure.