GHG Accounting 101: Scope 1, 2 and 3 Emissions for Indian Companies

Greenhouse gas (GHG) accounting is the discipline of measuring a company's emissions in a structured, comparable way — the same underlying logic as financial accounting, applied to carbon instead of currency. It is also the starting point for everything else in the carbon-credit and ESG conversation: you cannot set a credible net-zero target, report BRSR, or design a genuine offset strategy without a defensible inventory first.

Why "Scope" is the organising idea

The GHG Protocol — the global standard adopted by the vast majority of corporate reporting frameworks, including BRSR — organises emissions into three scopes based on where control and responsibility sit, not on where the physical emission occurs.

Scope	Definition	Typical sources
Scope 1	Direct emissions from owned or controlled sources	Fuel combustion in boilers, furnaces, owned vehicles; fugitive refrigerant leaks
Scope 2	Indirect emissions from purchased energy	Grid electricity, purchased steam, heating or cooling
Scope 3 (upstream)	Indirect emissions before the company's own operations	Purchased goods and services, capital goods, upstream transport, business travel, employee commuting
Scope 3 (downstream)	Indirect emissions after the product leaves the company	Distribution, use of sold products, end-of-life treatment, franchises, investments

Scope 3 is further broken into 15 categories under the GHG Protocol's Corporate Value Chain Standard — Category 1 (Purchased Goods and Services) is usually the largest for manufacturers and food companies, while Category 11 (Use of Sold Products) dominates for companies selling energy-consuming goods.

Why the distinction matters in practice

1. Materiality changes the story. A cement plant's biggest lever is Scope 1 (kiln fuel and process emissions). A retailer's biggest lever is Scope 3 (what it buys and sells). Getting the split wrong means investing in the wrong reduction levers.
2. BRSR reporting depends on it. SEBI's BRSR framework asks listed companies to report Scope 1 and Scope 2 by default, with Scope 3 disclosure expected where material — and assurance requirements are tightening over time.
3. Offsets cannot substitute for Scope 3 reduction. Under GHG Protocol and Science Based Targets initiative (SBTi) rules, carbon credits cannot be counted toward a Scope 3 reduction target. Companies must measure and reduce Scope 3 directly — see our detailed look at this in the context of potato processing and Scope 3 emissions.
4. Investors and buyers ask different questions. A lender assessing transition risk cares about Scope 1/2 trajectories; a large customer running its own Scope 3 inventory needs your Scope 1+2 data as an input to theirs.

Building a credible inventory: the four steps

1. Set organisational and operational boundaries. Decide whether to consolidate emissions by equity share, financial control or operational control — this determines which facilities and activities count.
2. Collect activity data. Fuel bills, electricity invoices, travel logs, freight tonne-kilometres, and supplier-level data where available. Primary data always beats industry-average emission factors.
3. Apply emission factors and calculate. Convert activity data into tCO₂e using recognised factors (India's Central Electricity Authority grid factor for Scope 2, DEFRA or IPCC factors for fuels and materials).
4. Verify and report. Third-party verification (increasingly required under BRSR Core for the largest companies) turns an internal estimate into a number stakeholders can trust.

What comes after the inventory

Once a company has a real number, three things typically follow: a BRSR-ready disclosure, a science-based target benchmarked against a credible pathway (see our guide on setting a science-based net-zero target), and a reduction plan that only turns to carbon credits for genuinely residual emissions.

Carbon Credit Consulting builds GHG inventories, BRSR-ready disclosures and net-zero roadmaps for Indian companies. Explore our GHG accounting and ESG & BRSR reporting services, or talk to us about your footprint.