Scope 1, 2 and 3 emissions: how to calculate a carbon footprint in Excel

Scope 1, 2 and 3 in one paragraph each

Scope 1 covers emissions from sources the company owns or controls: gas boilers, company vehicles, process emissions and refrigerant leaks. Scope 2 covers the generation of the electricity, steam, heat and cooling the company buys. Scope 3 covers everything else in the value chain, in 15 categories, from purchased goods and transport to business travel, employee commuting and the use and disposal of sold products.

For most companies Scope 3 is the largest part, often by far, but also the hardest to measure. A common way to start is with Scope 1 and 2 plus the Scope 3 categories with good data, such as business travel and commuting, and to widen the inventory each year.

Activity data × emission factor

For every source, collect the activity data in a physical unit, from invoices, meter readings, fuel cards or travel bookings: kWh of gas, litres of diesel, kWh of electricity, passenger-kilometres flown. Then multiply by an emission factor in kg CO₂e per unit and divide by 1,000 for tonnes: =C2*E2/1000. CO₂e (CO₂ equivalent) means other greenhouse gases such as methane are already converted with their global warming potential.

Emission factors come from published sets, for example national government conversion factors, the US EPA emission factor tables or your energy supplier. Use one consistent set per reporting year, write its name and year next to the factors, and update them every year.

Location-based vs market-based Scope 2

The GHG Protocol asks for Scope 2 in two ways. Location-based uses the average emission factor of the grid where the electricity is used: 650,000 kWh × 0.207 kg/kWh = 134.6 t. Market-based uses the factor of the electricity the company has contracted, for example a supplier-specific factor or renewable certificates: 650,000 kWh × 0.120 kg/kWh = 78.0 t.

Report both. The market-based figure shows the effect of purchasing decisions, the location-based figure shows the physical grid, and the difference (here 56.6 t) is not a reduction in actual consumption.

Worked example: a small manufacturer's footprint by scope

Activity data, scopes and emission factors are yellow inputs, and so is the supplier factor in F10. Tonnes per source and the scope totals are formulas.

Worked example: a small manufacturer's footprint by scope

	A	B	C	D	E	F
1	Source	Scope	Activity	Unit	Factor (kg CO₂e per unit)	tCO₂e = activity × factor ÷ 1,000
2	Natural gas, boilers	1	420,000	kWh	0.183	76.9
3	Diesel, company vans	1	18,500	litres	2.51	46.4
4	Electricity, grid average (location-based)	2	650,000	kWh	0.207	134.6
5	Business flights	3	185,000	passenger-km	0.15	27.8
6	Employee commuting by car	3	410,000	km	0.17	69.7
7
8	Scope 1 (direct)					123.3
9	Scope 2, location-based					134.6
10	Supplier emission factor for the market-based method (kg/kWh)					0.120
11	Scope 2, market-based = kWh × supplier factor					78.0
12	Scope 3 (travel and commuting only)					97.5
13	Total, Scope 2 location-based					355.3
14	Total, Scope 2 market-based					298.7
15	Scope 3 share of the location-based total					27.4%

Illustrative emission factors of a realistic order of magnitude, not an official set. Use the current factors your reporting framework requires, and include all relevant Scope 3 categories in a real inventory.

Totals by scope with SUMIFS

With every source in one table and its scope in column B, each scope total is one formula: =SUMIFS(F2:F6,B2:B6,1) for Scope 1, and the same with 2 and 3. Adding a new source then means adding a row, not rewriting the totals. A pivot table on the same table gives the same totals.

In the example, Scope 3 is 27% of the location-based total, but only two of its 15 categories are included. Purchased goods and transport would usually add much more, so state clearly which categories the figure covers.

Intensity, targets and the next steps

Absolute tonnes are compared with intensity metrics such as t CO₂e per million of revenue, per employee or per unit produced, which show efficiency when the business grows. A reduction target is then set against a baseline year, for example a linear path to −42% by 2030, and each year's inventory is checked against that path.

To decide what to do first, rank the reduction options by cost per tonne avoided in a marginal abatement cost curve: measures with negative cost (they save money) come first, expensive ones last.

Common mistakes

• Mixing units. A factor per litre applied to kWh, or kg treated as tonnes, gives answers off by a factor of ten or a thousand. Keep the unit next to every number.
• Double counting. Fuel for company-owned vehicles is Scope 1, and the same trips must not appear again as business travel in Scope 3.
• Reporting only market-based Scope 2. The GHG Protocol asks for both methods.
• Old or mixed emission factors. Use one set per year and update it, or year-on-year changes reflect the factors rather than the company.
• Calling a partial Scope 3 complete. State which of the 15 categories are included.
• Comparing years after a structural change without restating the baseline. An acquisition or sale changes the footprint without any real reduction.