Building a Scope 1, 2 and 3 emissions inventory is the technical backbone of any credible Indian corporate carbon disclosure, from BRSR Core value-chain data to voluntary net-zero targets. Scope 1, 2 and 3 emissions cover, respectively, the greenhouse gases a company burns or releases directly, the greenhouse gases embedded in the electricity, steam or cooling it buys, and the far larger footprint sitting upstream and downstream in its supply chain, logistics, travel and product use. This guide sets out how to define boundaries, build an auditable activity-data register, calculate each scope correctly, select and document emission factors, and reconcile the resulting numbers with BRSR and ESG reporting.
Scope 1 emissions are direct greenhouse gas emissions from sources a company owns or controls, such as boilers, furnaces, owned vehicles and refrigerant leaks. Scope 2 emissions are indirect emissions from purchased electricity, steam, heating or cooling. Scope 3 emissions are all other indirect emissions across the value chain, split into 15 categories defined by the GHG Protocol.
Scope 1, 2 and 3 explained
The GHG Protocol Corporate Accounting and Reporting Standard is the internationally recognised framework that Indian companies use to structure a carbon accounting India exercise, and it underpins the GHG data that feeds BRSR. Each scope answers a different question about where an emission physically occurs relative to the reporting company's operations.
| Scope | What it captures | Typical sources | Who usually owns the data |
|---|---|---|---|
| Scope 1 — direct | Combustion and process emissions from owned or controlled assets | Boilers, DG sets, furnaces, owned fleet, refrigerant top-ups | Plant engineering, utilities, fleet |
| Scope 2 — indirect (energy) | Emissions embedded in purchased energy | Grid electricity, purchased steam, purchased chilled water | Facilities, energy management |
| Scope 3 — indirect (value chain) | All other upstream and downstream emissions, in 15 defined categories | Purchased goods, logistics, travel, waste, product use | Procurement, logistics, HR, sales, sustainability |
Set organizational and operational boundaries
Before any activity data is collected, the reporting entity has to decide how it consolidates emissions across group companies and joint ventures, and which emission sources it will report against. The GHG Protocol offers three consolidation approaches for organizational boundaries — equity share, financial control and operational control — and Indian groups with multiple subsidiaries, joint ventures and leased sites need to pick one approach and apply it consistently across all scopes and all reporting years. Operational boundaries then determine which Scope 1, Scope 2 and Scope 3 sources are included; Scope 1 and 2 are always mandatory once an organizational boundary is set, while Scope 3 categories are screened for relevance as described later in this guide.
Base year, recalculation and renewable instruments
Pick a base year with reliable, verifiable data — usually the earliest year for which complete activity data exists — and document a recalculation policy that states when the base year figures must be restated: structural changes such as mergers, acquisitions or divestitures, outsourcing or insourcing of activities, and methodology or emission-factor changes that are significant enough to distort year-on-year comparability. Define the significance threshold that triggers recalculation in your own internal procedure and keep the rationale on file for auditors. This section is also where a company documents how it treats renewable electricity: physical on-site generation, power purchase agreements and unbundled renewable energy certificates all affect the market-based Scope 2 number differently and need a stated accounting policy, covered in more detail in the Scope 2 section below.
Companies that are scoping a wider decarbonisation or ESG programme alongside the GHG inventory typically combine this boundary-setting work with a structured ESG gap assessment; see Himaya's approach to ESG and sustainability implementation for how boundary decisions connect to broader disclosure readiness. Request a carbon-accounting readiness review from Himaya Prevention if your team needs an independent check on organizational boundaries, source completeness and base-year data before the inventory is built; write to info@himpre.com or ask about the ESG metrics workflow in HSEFQ.com.
Boundary decisions also determine how a multi-site Indian manufacturer treats sites under construction, mothballed plants, warehouses run by third-party logistics providers, and minority-owned joint ventures. Write the rule down for each site category once, apply it consistently, and revisit it only when the recalculation policy is triggered. A common failure mode is a group where each plant HSE or sustainability coordinator applies a slightly different boundary rule; centralising the boundary decision in one document before data collection begins avoids having to restate the whole inventory later.
Build the source and activity-data register
A defensible GHG inventory template starts with a single register that lists every emission source, the activity data that quantifies it, and the evidence that supports the number. This register is what an assurance provider or BRSR reviewer will ask for first, and it is the single most common gap in first-time inventories — companies calculate a total but cannot show where each number came from.
| Scope | Source | Activity data & unit | Data owner | Evidence reference | Estimation method | Review status |
|---|---|---|---|---|---|---|
| 1 | DG set fuel | Diesel consumed, litres or kL | Utilities engineer | Fuel purchase/issue register | Measured (metered/invoiced) | Reviewed |
| 1 | Refrigerant top-ups | Refrigerant added, kg by gas type | Facility/HVAC contractor | Service log, purchase invoice | Measured | Pending |
| 2 | Grid electricity | Purchased electricity, kWh/MWh | Energy manager | Utility bills, sub-meters | Measured | Reviewed |
| 3 | Business air travel | Passenger-km or spend by class | HR/Travel desk | Travel agency reports | Estimated (spend or distance-based) | Pending |
Each row should also carry the unit-conversion basis, the geography the activity relates to, the boundary decision (included, excluded and why), and an uncertainty note — these fields are detailed further in the emission-factor register below.
Calculate Scope 1 emissions
Scope 1 calculations generally follow the same structure: activity data multiplied by an appropriate emission factor, summed across gases and converted to carbon dioxide equivalent using current global warming potential values. The method is straightforward; the discipline is in sourcing the factor correctly and keeping the calculation traceable.
Stationary and mobile combustion
Stationary combustion covers boilers, furnaces, generators and heaters; mobile combustion covers owned or controlled vehicles, forklifts and site equipment. For both, activity data is fuel consumed by type (diesel, furnace oil, LPG, PNG/CNG, coal), and the emission factor must come from a current published dataset for the reporting year rather than being assumed from memory or a previous year's file. Confirm the correct factor set and vintage before calculating — do not carry forward a factor from an earlier reporting year without checking it is still current.
Refrigerants and fugitive emissions
Fugitive emissions arise from refrigerant leakage in HVAC and cold-chain equipment, and from process sources such as valves, flanges and compressors. Because most refrigerants have very high global warming potential relative to CO2, even small leak volumes can be material. Track refrigerant type, quantity topped up per service event, and the applicable global warming potential value for that gas from the currently published factor set, rather than a fixed number carried across years.
A practical way to keep Scope 1 traceable across multiple plants is to route fuel and refrigerant top-up data through the same evidence trail used for statutory returns — fuel purchase registers, DG-set running-hour logs and refrigerant service reports are usually already maintained for other compliance purposes, so the carbon accounting India workflow should reuse them rather than create a parallel data-collection exercise. Where a site burns more than one fuel type, keep activity data segregated by fuel because each fuel has its own emission factor and cannot be combined before conversion.
Calculate Scope 2 location- and market-based emissions
The GHG Protocol Scope 2 Guidance requires dual reporting: a location-based figure using the average emission intensity of the grid the facility draws from, and a market-based figure that reflects the emissions from the electricity a company has specifically chosen to purchase, including any renewable energy contracts.
Purchased electricity, steam and cooling
For the location-based method, Indian facilities should use grid-average factors published for the relevant year in the Central Electricity Authority's CO2 baseline database, which is the recognised source for India grid emission factors and is updated periodically — always cite the specific edition and year used. For the market-based method, use supplier-specific factors from power purchase agreements, renewable energy certificates or green tariffs where contractual instruments exist, falling back to a residual mix factor where they do not. Purchased steam and purchased chilled water follow the same logic using the supplier's or district system's disclosed emission intensity. Document which method drove which number in the activity-data register so the two figures can be reported side by side rather than blended.
Screen and calculate Scope 3 categories
Scope 3 is usually the largest share of a company's footprint and the hardest to quantify, so the first step is screening, not calculating. The GHG Protocol Scope 3 Calculation Guidance defines 15 categories; a company screens each for relevance and materiality before committing to detailed measurement.
Purchased goods, transport, travel, waste and use of sold products
In practice, most manufacturing and process-industry companies find that purchased goods and services, upstream transportation, business travel, employee commuting, waste generated in operations, and — where relevant — use of sold products account for the bulk of a material Scope 3 footprint. Categories such as capital goods, franchises or investments may be immaterial depending on the business model and can be documented as screened-out with a stated rationale rather than force-calculated.
| Category | Name | Screening note |
|---|---|---|
| 1 | Purchased goods and services | Usually material; start with top spend categories |
| 2 | Capital goods | Screen by asset spend in the reporting year |
| 3 | Fuel- and energy-related activities not in Scope 1 or 2 | Upstream fuel/electricity production emissions |
| 4 | Upstream transportation and distribution | Inbound freight not paid for by the company may still apply |
| 5 | Waste generated in operations | Screen by waste stream and disposal route |
| 6 | Business travel | Usually material for office-heavy or field-service businesses |
| 7 | Employee commuting | Survey-based estimation is common |
| 8 | Upstream leased assets | Applies where leased assets are excluded from Scope 1/2 |
| 9 | Downstream transportation and distribution | Outbound freight not paid for by the company |
| 10 | Processing of sold intermediate products | Relevant to component and material manufacturers |
| 11 | Use of sold products | Often the largest category for energy-using products |
| 12 | End-of-life treatment of sold products | Relevant where product disposal is a known route |
| 13 | Downstream leased assets | Applies to lessors of assets or space |
| 14 | Franchises | Relevant to franchisors |
| 15 | Investments | Relevant to financial institutions and holding companies |
Companies working with multi-tier suppliers often need supplier engagement alongside the screening exercise; where responsible sourcing and supplier auditing capability is required to gather primary Scope 3 data, Himaya's responsible sourcing auditing and implementation service supports that data-collection layer.
For most first-time inventories, a spend-based estimate using secondary emission factors is an acceptable starting point for lower-priority categories, provided it is clearly labelled as spend-based in the activity-data register. As the programme matures, replace spend-based estimates with supplier-specific primary data for the highest-emitting categories first — this is usually purchased goods and services, upstream transport and, for energy-using products, use of sold products. Document the transition from secondary to primary data in the register's estimation-method field so reviewers can see the data quality improving year over year rather than treating each year as a fresh exercise.
Select and document emission factors
Emission factor selection is where most inventories lose credibility if it is not documented properly. Never hardcode or guess a factor value in this article's tables — every factor used in an actual inventory must be pulled from the current published dataset for the specific reporting year from a recognised source: the Central Electricity Authority's CO2 baseline database for India grid electricity, the IPCC's published emission factor guidance for combustion and process sources, and DEFRA/DESNZ-style national conversion factor sets for travel, freight and materials where an India-specific factor is not available. Record, for every factor used, the fields below.
| Field | Purpose |
|---|---|
| Factor source and publication year | Traceability and audit trail |
| Applicable scope/category and unit | Ensures the factor matches the activity data unit exactly |
| Geography | Grid or national factors are region-specific |
| GWP set used (e.g., current IPCC assessment report) | Determines CO2e conversion for non-CO2 gases |
| Boundary decision | Confirms the source is correctly assigned to Scope 1, 2 or 3 |
| Estimation method | Measured, calculated or estimated/proxy |
| Evidence link and last verified date | Supports internal review and external assurance |
| Uncertainty note | Flags data quality for the uncertainty assessment |
Data quality, uncertainty and controls
A GHG inventory that will support BRSR disclosure or external assurance needs documented data-quality controls, not just a final number. Grade each data point by how it was obtained — directly measured, calculated from metered inputs, or estimated using proxies or industry averages — and carry that grading into an uncertainty assessment so reviewers know which figures are robust and which need improvement over time.
- Segregation of duties between the person entering activity data and the person approving the factor applied
- Version control on the emission-factor register so a factor update does not silently change historical totals without a recalculation note
- Independent sample verification against source documents (fuel invoices, electricity bills, travel reports) before the inventory is finalized
- A documented sign-off chain culminating in a named approver before figures are published or submitted for assurance
- A change log capturing methodology or boundary changes year over year
Treat the uncertainty assessment as a working document rather than a one-time exercise. Every reporting cycle, review which data points moved from estimated to measured, which factors were updated to a newer published year, and which sources still rely on proxy data. Tracking this progression is what distinguishes a maturing GHG inventory from one that simply repeats the same assumptions every year, and it is usually the first thing an external assurance provider checks before relying on a company's own figures.
Reconcile carbon data with BRSR/ESG reporting
Under SEBI's BRSR Core framework, GHG emissions is one of nine core attributes that move through a phased assessment-or-assurance schedule across the top listed companies by market capitalisation, so the GHG inventory built using this methodology is not a standalone exercise — its boundaries, units and base year must reconcile with what is disclosed in Principle 6 of the BRSR and in the BRSR Core value-chain data. For a full walk-through of applicability and the value-chain data expectations, see Himaya's dedicated BRSR Core 2026-27 guide. Keep a mapping table on file that shows, line by line, which inventory source feeds which BRSR data point, so that any assurance provider can trace the disclosed number back to the register.
Where your team needs the ESG data workflow — source evidence capture, approvals and dashboards — built into a working system rather than spreadsheets, request an ESG module demo of HSEFQ's ESG metrics, source evidence, approvals and dashboards capability.
Reconciliation also means aligning reporting periods and consolidation approaches. BRSR disclosures generally follow the company's financial year, while some GHG inventories are historically built on a calendar year for global group reporting; if both exist, document the conversion or overlap logic once, rather than re-deriving it every disclosure cycle. Keep the underlying activity-data register available to your statutory auditor, board ESG committee and any external assurance provider in the same format each year so that period-on-period comparisons remain meaningful.
GHG inventory checklist and template
Use this checklist to confirm the inventory is complete and defensible before it is submitted internally or externally:
- Organizational boundary approach selected and documented (equity share, financial control or operational control)
- Operational boundary and Scope 3 screening decisions recorded with rationale
- Base year set with a documented recalculation policy
- Source and activity-data register complete for all included sources
- Emission-factor register complete, with source, year, geography and GWP set for every factor
- Scope 2 reported dual (location-based and market-based)
- Scope 3 categories screened with a stated relevance/materiality rationale for each
- Data-quality grading and uncertainty notes assigned to every data point
- Sign-off chain and version history documented
- Reconciliation mapping to BRSR/ESG disclosure complete
The screening calculator below is a simple activity-data-times-factor worksheet you can use while assembling the register. It does not supply emission factors — enter the factor you have sourced from the CEA baseline database, IPCC or a DEFRA/DESNZ-style dataset for the correct year, along with a note of where it came from.
Frequently asked questions
What is the difference between Scope 1, 2 and 3?
Scope 1 is direct emissions from sources a company owns or controls, such as fuel combustion and refrigerant leaks. Scope 2 is indirect emissions from purchased electricity, steam or cooling. Scope 3 is every other indirect emission in the value chain, from purchased goods to product use, grouped into 15 categories.
Which Scope 3 categories apply?
There is no universal answer — every company screens all 15 categories against its own operations and spend profile. Categories with negligible activity or spend can be documented as screened-out with a stated rationale rather than calculated in detail.
Which emission factors should Indian companies use?
Use the currently published dataset for the reporting year: the Central Electricity Authority's CO2 baseline database for India grid electricity, IPCC-published factors for combustion and process sources, and DEFRA/DESNZ-style conversion factors where no India-specific figure exists. Always record the source and publication year alongside the number.
How is renewable electricity reported?
Renewable electricity is reported through the market-based Scope 2 method using supplier-specific factors, power purchase agreement terms or renewable energy certificates, alongside a separate location-based figure calculated from the grid-average factor. Both figures are disclosed side by side under GHG Protocol Scope 2 guidance.
How does GHG data connect to BRSR?
GHG emissions is one of the core attributes in SEBI's BRSR Core framework, and the boundaries, units and base year used in the GHG inventory must reconcile with what is reported in the BRSR. Keeping a documented mapping between the inventory and the disclosure is essential once assurance or assessment applies.
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