Scopes 1, 2 and 3 Emissions Inventorying and Guidance

A greenhouse gas (GHG) inventory is a list of emission sources and the associated emissions quantified using standardized methods. Organizations develop GHG inventories for a variety of reasons, including:

• Managing GHG risks and identifying reduction opportunities.
• Participating in voluntary or mandatory GHG programs.
• Participating in GHG markets.
• Achieving recognition for early voluntary action.

The Center for Corporate Climate Leadership’s GHG inventory guidance is aligned with The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (GHG Protocol Corporate Standard) developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), which is the global standard for calculating corporate GHG emissions.

Organizations are encouraged to consult the GHG Protocol Corporate Standard for foundational guidance on GHG accounting principles, defining inventory boundaries, identifying GHG emission sources, defining and adjusting an inventory base year, and tracking emissions over time. As a resource center for GHG measurement and management, EPA’s Center for Corporate Climate Leadership has developed GHG inventory resources to complement the GHG Protocol Corporate Standard that provide specific guidance on GHG calculation methodologies and emission factors.

The GHG Inventory Development Process

The GHG inventory development process consists of four key steps (see infographic):

1. Review accounting standards and methods, determine organizational and operational boundaries, and choose a base year.
2. Collect data and quantify GHG emissions.
3. Develop a GHG Inventory Management Plan to formalize data collection procedures.
4. Set a GHG emission reduction target and track and report progress.

Below, you may access the chapters of the GHG Protocol Corporate Standard for more information about each of these steps, as well as EPA’s complementary guidance and resources.

GHG Inventory Development Resources

Step 1: Get Started: Scope and Plan Inventory

• Review GHG accounting standards and methods for organizational reporting.
• Determine organizational and operational boundaries.
• Choose a base year.
• Consider 3rd party verification.

GHG Protocol Corporate Standard Chapters

• Chapter 1: GHG Accounting and Reporting Principles
• Chapter 2: Business Goals and Inventory Design
• Chapter 3: Setting Organizational Boundaries
• Chapter 4: Setting Operational Boundaries
• Chapter 5: Tracking Emissions Over Time
• Chapter 10: Verification of GHG Emissions

EPA Resources

• Simplified Guide to Greenhouse Gas Management for Organizations (pdf) (393.64 KB) provides an overview of the four steps to developing a GHG inventory. It is intended for small businesses and low emitters, but the concepts are applicable to all organizations. It explains how organizations can approach measuring GHG emissions, instructions for using the Simplified GHG Emissions Calculator, and how to complete the Inventory Management Plan.
• EPA's Determine Organizational Boundaries page provides details on how to define boundaries for an organization’s GHG inventory. Organizational boundaries determine which entities and assets will be included in the scope 1 and scope 2 GHG emissions inventory. This step allows organizations to make sure their boundaries are aligned to internal objectives and quantifies emissions that are decision-useful for stakeholders. This step is necessary before identifying any emission sources or collecting data.

Step 2: Collect Data and Quantify GHG Emissions

• Identify data requirements and preferred methods for data collection.
• Develop data collection procedures, tools, and guidance materials.
• Compile and review facility data (e.g., electricity, natural gas).
• Estimate missing data to fill gaps.
• Choose emissions factors.
• Calculate emissions.

GHG Protocol Corporate Standard Chapters

• Chapter 6: Identifying and Calculating GHG Emissions

EPA Resources

• EPA's scope 1 and scope 2 inventory guidance provides methods to calculate and report GHG emissions from these sources. Scope 1 emissions are direct GHG emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles). Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling.
• EPA's scope 3 inventory guidance provides resources and emission factors to help organizations develop a scope 3 emissions inventory. Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. Scope 3 emissions include all sources not within an organization’s scope 1 and 2 boundary. Scope 3 emissions, also referred to as value chain emissions, often represent the majority of an organization’s total GHG emissions.
• EPA’s supply chain guidance provides information on why and how to engage suppliers, steps for building internal support for supply chain management, and how third-party programs can assist with supply chain management. Examples of sector-specific guidance and resources for reducing supply chain emissions are also provided.
• EPA's GHG Emission Factors Hub provides organizations with a regularly updated, easy-to-use, and consolidated set of default emission factors with streamlined units for organizational GHG reporting.

  A key component of developing a GHG inventory is the use of emission factors. An emission factor presents the quantity of a GHG emitted to the atmosphere associated with a specific activity. The following are two examples of emission factors:

  • The amount of carbon dioxide (CO₂) emitted to the atmosphere when combusting natural gas in a boiler is typically expressed as kilograms (kg) of CO₂ per million British thermal units (MMBtu) of natural gas combusted (kg CO₂/MMBtu natural gas).
  • The amount of CO₂ emitted to the atmosphere when generating electricity is typically expressed as kg CO₂ per megawatt-hour (MWh) electricity generated (kg CO₂/MWh).

  When quantifying GHG emissions, it is also important to apply the correct global warming potentials (GWPs) to individual GHGs so that GHG emissions can be reported in units of carbon dioxide equivalent (CO₂e). The GHG Emission Factors Hub includes GWPs for methane (CH₄) and nitrous oxide (N₂O) that are consistent with EPA's Inventory of U.S. Greenhouse Gas Emissions and Sinks. Learn more about GWPs.

• EPA's Simplified GHG Emissions Calculator is designed as a simplified calculation tool to help small business and low emitter organizations estimate and inventory their annual GHG emissions. The calculator will determine the direct and indirect emissions from all sources at a company when activity data are entered into the various sections of the workbook for one annual period.

Step 3: Develop a GHG Inventory Management Plan

• Formalize data collection procedures and document process in Inventory Management Plan.

GHG Protocol Corporate Standard Chapters

• Chapter 7: Managing Inventory Quality

EPA Resources

• The Inventory Management Plan (IMP) Checklist (docx) outlines the components that should be included in a high-quality IMP. It can be used as a guide for creating an IMP or pulling together existing documents.
• The Simplified Inventory Management Plan Form (doc) (829.5 KB, August 2020) provides a template for an organization to document its inventory development process.

Learn more about inventory management plans.

Step 4: Set a GHG Emission Reduction Target and Track and Report Progress

• Finalize data.
• Complete third-party verification (optional).
• Report data as needed.
• Prepare to set a publicly reported GHG target and track progress.

GHG Protocol Corporate Standard Chapters

• Chapter 8: Accounting for GHG Reductions
• Chapter 9: Reporting GHG Emissions
• Chapter 10: Verification of GHG Emissions
• Chapter 11: Setting a GHG Target

EPA Resources

• The resource center’s Target Setting page provides information about corporate target setting and access to the Annual GHG Inventory Summary and Target Tracking Form, which provides a format to summarize GHG emissions and track emissions over time against a GHG reduction target.