Understanding Scope 1, 2, and 3 Emissions: A Comprehensive Guide

PEBBLE ACADEMY · Emissions

Scope 1: Direct Emissions

Scope 1 covers emissions from sources you own or control: fuel burned in company vehicles, gas burned in your boilers, refrigerant leaks from your HVAC, fugitive emissions from any equipment on site.

For software-first companies it's usually the smallest scope, but it's the easiest to measure precisely — the data lives in fuel receipts and utility statements.

Scope 2: Purchased Energy

Scope 2 covers emissions from electricity, steam, heat, or cooling you purchase. Two reporting methods exist: location-based (the average emissions of the local grid) and market-based (factors in any green-power purchases or PPAs you hold).

Reporting both is best practice. The location-based number tells the truth about physical electrons; the market-based number tells the truth about contractual claims.

Scope 3: Everything Else

Scope 3 is the iceberg. It covers fifteen categories spanning your supply chain, business travel, employee commuting, leased assets, distribution, and the use of your products. For most companies it's 70–90% of total emissions and the hardest to measure.

Don't try to do all fifteen on day one. Pick the categories that are biggest and most material to your business — usually purchased goods (Cat 1), business travel (Cat 6), and use of sold products (Cat 11) for software companies.

Where Cloud Sits

Cloud computing is Scope 2 for most teams — the electricity your workloads consume, even if it's billed via your cloud provider's invoice rather than a utility statement. A few cloud providers report this as Scope 3 on the customer's behalf, which lowers the customer's reported number but doesn't eliminate the underlying emissions.

However it's reported, optimizing it gives you a direct lever on both cost and Scope 2 (or 3) numbers — which is exactly what Pebble is built to automate.


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