Understanding Scope 1 and Scope 2 Emissions

Welcome to Teaching Sustainability, the 20-week series from Aclymate created to help small and mid-sized business leaders understand what sustainability means, why it matters, and what to do next. Each week, we cover one practical topic — from carbon accounting and reporting to certifications and climate action — in clear, simple language designed to help you build a more resilient, credible, and competitive business.

Last chapter, we introduced the three-bucket structure of the GHG Protocol: Scope 1, Scope 2, and Scope 3. This chapter zooms in on the first two — the emissions closest to home, and usually the most practical place for a small or mid-sized business to start.

Scope 1, In Practice

Scope 1 is defined by ownership and control, which means it looks very different from one business to the next. A landscaping company with a fleet of trucks and gas-powered equipment will have a substantial Scope 1 footprint. A ten-person marketing agency renting office space will likely have almost none.

In practice, Scope 1 usually shows up in a few recognizable places:

• Company vehicles — delivery vans, service trucks, sales fleet cars — burning gasoline or diesel.
• On-site combustion — natural gas or propane used to heat a facility, run a boiler, or power manufacturing equipment.
• Backup and portable equipment — generators, forklifts, and similar equipment that runs on fuel rather than electricity.
• Fugitive emissions — refrigerant that slowly leaks from HVAC systems, walk-in coolers, or refrigeration units. These are easy to overlook because nothing is being "burned," but some refrigerants have an outsized climate impact even in small quantities.

If your business doesn't operate vehicles, doesn't burn fuel on-site, and doesn't run refrigeration equipment, your Scope 1 emissions may genuinely be close to zero — and that's a legitimate, useful finding, not a gap in your work.

Scope 2, In Practice

Scope 2 tends to be more universal. Almost every business buys electricity, which means almost every business has some Scope 2 footprint — powering offices, warehouses, retail space, servers, or production equipment. Some facilities also purchase steam, heat, or cooling directly, which falls into the same bucket.

One detail worth understanding early: the GHG Protocol recognizes two ways to calculate Scope 2. The location-based method uses the average emissions intensity of the electricity grid in your area — essentially, what a typical kilowatt-hour looks like where you operate. The market-based method reflects the specific electricity you've contracted for, including any renewable energy certificates (RECs) or clean power purchases. A business that buys RECs might see a very different Scope 2 number under each method, and companies with a meaningful Scope 2 footprint are generally expected to report both.

Why These Two Scopes Are Where Most Companies Start

There's a practical reason Scope 1 and Scope 2 usually come first, and it isn't just tradition. The data is close at hand — utility bills, fuel receipts, and fleet records are things most businesses already have. And the levers for change are directly in your hands: switching a delivery van to electric, upgrading HVAC systems, or signing a green power contract are actions you can take unilaterally, without depending on a supplier or customer to change their behavior. Getting Scope 1 and 2 right also builds the operational habits — data collection, recordkeeping, internal ownership — that make tackling Scope 3 far more manageable later.

A Few Things That Trip People Up

A handful of details cause more confusion than they should:

• Refrigerants get forgotten. Because there's no invoice that says "emissions," refrigerant top-offs during HVAC servicing are one of the most commonly missed Scope 1 sources.
• Leased space is ambiguous. Whether energy use in a leased office counts as your Scope 1/2, your landlord's, or gets split depends on which "organizational boundary" approach you use — operational control, financial control, or equity share. Pick one and apply it consistently.
• Location-based and market-based Scope 2 get mixed up. If you've purchased RECs but only ever report a grid-average number, you're not getting credit for that investment — and vice versa, if you skip the location-based figure, you may be understating your exposure to your local grid's actual emissions intensity.

What to Do This Week

• Pull your fleet fuel records. Fuel card statements, mileage logs, or fleet management software are the fastest path to a usable Scope 1 vehicle estimate.
• Gather your electricity bills for the past year. While you're at it, check whether your utility already offers a green power program or whether you've purchased any RECs — you'll need that for market-based Scope 2 reporting.
• Decide how you'll treat leased or shared space. If you don't control the building, agree on an approach now so it doesn't become a debate later when you're trying to finalize numbers.

How Aclymate Helps

Aclymate connects directly to utility accounts and fuel and expense data to build out Scope 1 and Scope 2 automatically, calculating both location-based and market-based Scope 2 figures where relevant. The platform flags common gaps — like missing refrigerant records — before they become a hole in your inventory. On the Aclymate One tier, your Carbon Bookkeeper helps you set your organizational boundary approach once, correctly, so every future year builds on the same consistent foundation.

The Takeaway

Scope 1 and Scope 2 are where most businesses should build their first real inventory — not because they're the biggest source of emissions, but because they're the most controllable, and the most straightforward to measure well. Getting them right is what makes the harder work ahead possible.

Next chapter, we'll take on the bucket most companies find intimidating: Scope 3, and why it usually turns out to be the biggest piece of the puzzle.