A company’s GHG emissions are divided into Scopes 1, 2, and 3. In a nutshell, they are as follows:
Scope 1: Emissions that occur on-site. For example, if you burn natural gas for energy, the GHG emissions are directly released during that process on-site.
Scope 2: Emissions that occur elsewhere, but for which the company has operational control. The best example is electricity. The company has operational control over whether the lights are on or off, but the emissions occur off-site where the electricity is generated.
Scope 3: All other indirect emissions not covered in Scope 2. This includes all of the upstream emissions that occurred before the company had operational control over a process or product (e.g. for a cheese manufacturer, this would include GHG emissions to create the milk that the company purchased). It also includes downstream emissions (e.g., emissions that occur after the cheesemaker’s products leave the plant, like those at the grocery store or when consumers dispose of packaging.)
GHG emissions are categorized into each Scope based on the company’s perspective. So for a cheese manufacturer, on-farm emissions are considered Scope 3. But for the farmer, those emissions are Scope 1 and 2.