Carbon Reporting in India: A Simple Guide to Scope 1, 2, and 3 Emissions

As Indian businesses embrace sustainability and net-zero goals, understanding carbon emissions reporting is a necessity today. Whether you are a manufacturing giant, a logistics provider, or a tech firm, accurately measuring your greenhouse gas (GHG) footprint is critical for compliance, investor confidence, and long-term operational efficiency. In India, regulations like BRSR (Business Responsibility and Sustainability Report) and global frameworks like TCFD and GHG Protocol make carbon accounting a cornerstone of corporate responsibility.

But let’s be honest, navigating Scope 1, Scope 2, and Scope 3 emissions can feel like wading through technical jargon. This guide simplifies the concepts while giving you actionable insights to level up your carbon reporting practices.

Scope 1 Emissions: Direct Carbon Footprint from Your Operations

Scope 1 emissions are the direct GHG emissions from sources owned or controlled by your company. In India, this typically includes:

• Combustion of fossil fuels in boilers, furnaces, and generators

• Fuel use in company-owned vehicles

• Process emissions from chemical reactions, manufacturing, or other industrial activities

For instance, a cement manufacturer in India would include CO₂ from kiln operations, while a logistics company would track diesel consumed by fleet vehicles. Scope 1 emissions are often the easiest to measure because they come directly from your operations.

Photo by Bruno Henrique on Unsplash

Best practices for Scope 1 reporting:

• Install smart meters and IoT-enabled fuel tracking for accurate real-time data

• Use emission factors provided by the Indian Ministry of Environment, Forest and Climate Change (MoEFCC) or IPCC guidelines

• Regularly audit fuel and process usage to reduce discrepancies

Scope 2 Emissions: Indirect Emissions from Energy Consumption

Scope 2 emissions are indirect emissions from purchased electricity, steam, heat, or cooling. While you don’t burn the fuel yourself, the energy you consume contributes to carbon emissions upstream at power plants.

For Indian companies, this means:

• Calculating emissions from grid electricity based on state-specific emission factors

• Including renewable energy certificates (RECs) or on-site renewable generation where applicable

• Monitoring emissions from leased office spaces if energy bills are under your control

Pro tip: Switching to renewable electricity or solar rooftops not only reduces Scope 2 emissions but also strengthens ESG reporting credibility.

Scope 3 Emissions: The Hidden Carbon Across Your Value Chain

Scope 3 emissions often account for the largest portion of a company’s carbon footprint, yet they are also the most complex. These are indirect emissions that occur in your value chain, both upstream and downstream, including:

• Purchased goods and services

• Business travel and employee commuting

• Waste generated and disposal

• Use of sold products

• Logistics and distribution

For example, an Indian FMCG company would include emissions from raw material sourcing, transportation, and product usage by customers.

Scope 3 challenges and solutions:

• Data collection is fragmented, suppliers may not track emissions consistently

• Use lifecycle assessment (LCA) tools to estimate emissions where data is unavailable

• Collaborate with suppliers to implement carbon reduction programs and track progress

• Apply AI and digital carbon management platforms to consolidate and automate reporting

Why Scope-Based Reporting Matters for Indian Companies

• Regulatory Compliance: With frameworks like BRSR, SECR, and evolving corporate climate disclosures, Indian companies are increasingly required to report on Scope 1, 2, and 3 emissions.

• Investor Confidence: ESG-conscious investors demand transparent and accurate carbon reporting.

• Operational Efficiency: Measuring emissions often reveals energy wastage and supply chain inefficiencies that can be optimized for cost savings.

• Strategic Decarbonization: Knowing your carbon hotspots helps in prioritizing interventions, from energy efficiency projects to green procurement strategies.

How to Get Started

1. Centralize your data: Consolidate energy, fuel, and procurement data into a single reporting platform.

2. Apply the GHG Protocol: Classify emissions into Scope 1, 2, and 3 categories for consistent reporting.

3. Leverage AI tools: Modern platforms can automate calculations, provide actionable insights, and track carbon reduction over time.

4. Engage your value chain: Collaborate with suppliers and partners to capture Scope 3 emissions accurately.

5. Set science-based targets: Align your net-zero commitments with global standards like SBTi for credibility.

Scope-based carbon reporting is not just a compliance exercise, it’s a strategic tool for sustainability, cost optimization, and long-term resilience. By understanding and measuring Scope 1, 2, and 3 emissions, Indian businesses can transition to low-carbon operations, improve ESG ratings, and prepare for a Net-Zero future.

At Fitsol, we help companies simplify carbon accounting, centralize emissions data, and take actionable steps toward decarbonization, making it easier to move from reporting to impact.