Scope 1, 2 and 3 Emissions Under ESRS E1: A Practical Measurement and Reporting Guide

If you are preparing a CSRD sustainability statement, the single most technically demanding task is almost certainly your GHG inventory. ESRS E1 - the climate change standard - requires you to measure and disclose Scope 1, 2 and 3 emissions following the GHG Protocol methodology. That is not a vague reference: it means the same calculation rules, category structure and boundary logic that the GHG Protocol Corporate Standard and its Scope 3 companion have established over the past two decades.

This guide walks through each scope, what ESRS E1 specifically requires you to disclose, how to handle data gaps, and what the 2025-2026 ESRS simplification did - and critically did not - change for emissions reporting.

The Three Scopes: What Each One Covers

The GHG Protocol divides corporate emissions into three scopes based on where they occur relative to your operations. ESRS E1 adopts these definitions directly.

Scope 1 - Direct emissions

Scope 1 covers direct greenhouse gas emissions from sources that are owned or controlled by the reporting company - combustion in your own boilers and furnaces, process emissions from manufacturing, fugitive refrigerant leaks, and emissions from your owned vehicle fleet. If you own the source, it is Scope 1.

The boundary question matters here. Under the amended ESRS, emissions reporting starts from a financial control boundary - meaning you consolidate the entities over which you exercise financial control, not just equity-weighted shares.

Scope 2 - Indirect energy emissions

Scope 2 covers indirect emissions from purchased or acquired electricity, heat, steam, and cooling consumed by the company. The emissions physically occur at the power plant or heat generator, but they are attributed to you as the energy buyer.

ESRS E1 requires you to report Scope 2 twice: once using the location-based method (the average carbon intensity of the grid where you operate) and once using the market-based method (the emissions factor of the specific contracts, certificates or tariffs you have purchased). Reporting both gives a complete picture - one shows your exposure to the regional grid mix, the other shows the impact of your renewable energy sourcing choices.

Scope 3 - Value-chain emissions

Scope 3 covers all other indirect emissions across your upstream and downstream value chain - from the goods and services you purchase, to the use and end-of-life of the products you sell. Scope 3 emissions typically account for 70-90% of a company's total carbon footprint, yet they occur entirely outside your direct operational control.

The GHG Protocol released its Scope 3 Standard in 2011, making it the only internationally accepted method for companies to account for value-chain emissions. ESRS E1 explicitly references this standard and its 15-category structure.

The 15 Scope 3 Categories

The GHG Protocol Corporate Value Chain (Scope 3) Standard defines 15 categories of Scope 3 emissions, split between upstream (Categories 1-8) and downstream (Categories 9-15).

In practice, three to five categories typically dominate a company's Scope 3 footprint. For a manufacturer, Category 1 (purchased goods) and Category 11 (use of sold products) are usually the largest. For a financial institution, Category 15 (investments) is often the defining one. Run a materiality screen before trying to perfect all 15 - the GHG Protocol explicitly allows you to prioritise significant categories.

What ESRS E1 Actually Requires You to Disclose

The core GHG disclosure sits in E1-6 (Gross Scope 1, 2, 3 and Total GHG Emissions). Here is what the standard requires:

For all scopes:

• Total gross emissions in tonnes of CO₂ equivalent, covering the seven Kyoto gases
• Emissions must be gross - carbon credits, removals and avoided emissions cannot be netted off
• Emissions intensity based on net revenue

For Scope 2 specifically:

• Both location-based and market-based figures, with disclosure of the contractual instruments used

For Scope 3 specifically:

• Total gross Scope 3 broken down by each significant category
• The methodology and emission-factor databases used for each category
• The primary vs. secondary data split - what share of your Scope 3 data came from direct supplier measurements versus industry averages or spend-based proxies
• Biogenic CO₂ emissions disclosed separately from the main Scope 1 figure

Carbon credits are handled in a separate disclosure requirement (E1-7) and must be documented with full evidence of quality, additionality and permanence. They cannot be used to show progress against your E1-4 reduction targets.

Handling Data Gaps: Primary vs. Secondary Data

Scope 3 data collection is where most companies struggle. ESRS 1 - the general requirements standard - explicitly acknowledges this and provides flexibility: estimates and secondary data are permitted where primary data is unavailable, provided the methodology and data quality are disclosed.

The GHG Protocol defines a calculation method ladder for Scope 3:

Your ESRS E1 disclosure must state which method you used for each significant category and what share of your total Scope 3 figure is based on primary versus secondary data. This is not just a transparency requirement - auditors will use it to assess the reliability of your inventory.

Practical tip: Start with spend-based estimates to identify which categories are likely material. Then invest in climbing the method ladder only for those categories - typically the top three to five that account for 80%+ of your estimated Scope 3 total.

What the ESRS Simplification Changed - and What It Did Not

In December 2025, EFRAG submitted its technical advice on the simplified ESRS to the European Commission. The amended ESRS cut mandatory datapoints by 61% - from approximately 1,100 to around 430 - and removed all voluntary datapoints. The simplified standards are targeted to apply from FY2027, with early adoption possible for FY2026.

What changed for GHG reporting:

• The amended ESRS clarifies the reporting boundary (financial control) and aligns more closely with IFRS S2
• The preference for primary data in the value chain has been softened - reducing pressure on companies to demand supplier-specific data for every category
• Scenario analysis is now voluntary rather than required
• Some phase-ins apply to quantitative financial effects disclosures

What did NOT change:

• Scope 3 GHG disclosure was explicitly preserved in the simplified ESRS - GHG reporting was judged mature enough to remain mandatory
• Gross emissions reporting (no netting) remains
• The requirement to break down Scope 3 by significant category remains
• The GHG Protocol remains the required methodology

The bottom line for practitioners: if you have already built a GHG Protocol-compliant inventory, the amended ESRS does not require you to rebuild it. It requires you to disclose it in a structured, auditable way - with methodology notes, data quality flags, and the primary/secondary split clearly documented.

A Quick Scope Checker

Not sure which categories are likely material for your sector, or want to estimate your Scope 3 footprint before committing to a full inventory? Use the interactive tool below to get a starting-point view.

Key Takeaways

• Scope 1 = your own sources; Scope 2 = purchased energy (report both location-based and market-based); Scope 3 = everything else across 15 GHG Protocol categories.
• ESRS E1 requires gross emissions - no netting of credits or removals.
• Scope 3 must be broken down by significant category, with methodology and primary/secondary data split disclosed.
• Secondary data and estimates are permitted where primary data is unavailable - but you must document what you used and why.
• The simplified ESRS (FY2027+) cut 61% of mandatory datapoints overall, but preserved Scope 3 GHG disclosure in full.
• If you are a Wave 1 reporter, you are still on the original 2023 ESRS for FY2025 and FY2026.

The ESRS and GHG Protocol landscape is still moving - the Delegated Act adopting the amended ESRS is expected in mid-2026. For plain-English updates as they happen, subscribe to The CSRD Brief - we watch Brussels so you don't.