GHG Protocol: Scopes 1, 2 & 3 Explained for Startups

What is the GHG Protocol?

The Greenhouse Gas (GHG) Protocol is the international accounting framework for measuring and managing greenhouse gas emissions. Developed jointly by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it has become the de facto global standard used by over 92% of Fortune 500 companies for carbon reporting.

First published in 2001 and updated in 2011 with the Corporate Value Chain (Scope 3) Standard, the GHG Protocol provides companies with a structured methodology to quantify emissions across their entire value chain — not just what comes out of their smokestacks.

The Three Scopes of Emissions

The GHG Protocol organizes emissions into three categories, called scopes:

Scope 1 — Direct Emissions

Emissions from sources owned or controlled by the company. Examples:

Burning fuel in company-owned vehicles
On-site combustion (boilers, furnaces)
Refrigerant leaks from HVAC systems

Scope 2 — Indirect Energy Emissions

Emissions from purchased electricity, steam, heat, or cooling. Your office's electricity bill generates Scope 2 emissions at the power plant, even if nothing burns at your premises.

Scope 3 — Value Chain Emissions

All other indirect emissions across the value chain — typically the largest category:

Upstream: Purchased goods/services, business travel, employee commuting, supplier emissions
Downstream: Use of sold products, end-of-life treatment, transportation

The GHG Protocol defines 15 Scope 3 categories. For most tech companies, business travel, cloud infrastructure energy use, and purchased software services dominate Scope 3.

Why It Matters for Startups

Many founders assume GHG accounting is only for heavy industry. This is changing fast:

Enterprise sales requirements — Large customers increasingly require suppliers to disclose Scope 1–3 emissions in procurement questionnaires and vendor due diligence.
Investor pressure — ESG-focused VCs and LPs ask portfolio companies for emissions baselines, especially at Series B and beyond.
Regulatory cascade — The EU's CSRD and the SEC's proposed climate disclosure rules will push large companies to collect Scope 3 data from their suppliers — including your startup.
M&A diligence — Carbon liability is becoming part of acquisition due diligence.

Getting your GHG baseline established early costs far less than retrofitting it later under compliance pressure.

How 100x Helps

At 100x Engineering, we build GHG data collection and reporting MVPs in 3 weeks. This includes:

Emissions calculator interfaces for Scope 1, 2, and 3 data entry
API integrations with utility providers, cloud platforms (AWS, GCP, Azure), and travel booking systems
Automated reporting dashboards aligned with GHG Protocol categories
Export pipelines for CDP, GRI, and TCFD disclosure formats

Whether you're a climate tech startup building an emissions tool or an enterprise SaaS that needs to disclose your own footprint, we ship production-ready solutions fast.