Scope 1, 2 and 3 emissions explained: a guide for Indian companies
What Scope 1, 2 and 3 emissions mean under the GHG Protocol, how location-based and market-based Scope 2 differ, the 15 Scope 3 categories, and what Indian companies and MSME suppliers are being asked for.
Why do MSME suppliers get asked about emissions?
Your Scope 1 and 2 are part of your customer's Scope 3, Category 1. When a large listed company, an export buyer or a multinational vehicle maker sets a climate target, it needs numbers from its suppliers, and small firms start getting questionnaires.
In India this pull is becoming formal. SEBI's circular of 28 March 2025 (SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/42) makes ESG disclosures for the value chain applicable to the top 250 listed companies on a voluntary basis from FY 2025-26, with assessment or assurance of those disclosures voluntary from FY 2026-27. Here the value chain means upstream and downstream partners that individually make up 2% or more of the listed company's purchases or sales by value. The company may limit the disclosure to partners covering 75% of its purchases and sales.
What a small supplier can do now:
- Keep 12 months of electricity bills, fuel purchase records and DG-set diesel logs in one place.
- Work out your Scope 1 and Scope 2 for each site. Our GHG inventory guide shows the steps.
- Record your production (tonnes, pieces, hours) so you can share emissions per unit.
- Label estimates honestly. A clearly marked estimate with a stated method is more useful to a buyer than a polished number with nothing behind it.
Sources: GHG Protocol Corporate Accounting and Reporting Standard (revised edition, 2004); GHG Protocol Scope 2 Guidance (2015); GHG Protocol Corporate Value Chain (Scope 3) Standard (2011); GHG Protocol: public consultations page; GHG Protocol: release opening Scope 2 and electricity-sector consequential consultations; GHG Protocol: key standard development updates FAQ (29 July 2026); GHG Protocol: Scope 3 Standard Revisions Phase 1 Progress Update (March 2026, draft); SEBI: Format of BRSR Core, Annexure I (July 2023); SEBI circular SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/42 (28 March 2025); Central Electricity Authority, CO2 Baseline Database for the Indian Power Sector, User Guide Version 22.0 (August 2026)
This article was prepared with AI assistance and checked by the GreenEye team against the sources shown in each section.
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