A practical, plain-English guide to carbon accounting in Hong Kong — what the three scopes mean, how to calculate them, and why HKEX now requires all listed companies to report them.
By Peak M&S Education Centre · June 2026 · 8 min read
If your company is listed on the Hong Kong Stock Exchange, carbon accounting is no longer optional. Under the updated HKEX ESG Reporting Guide aligned with international ESG climate disclosure standards, listed companies must measure and disclose greenhouse gas (GHG) emissions across all three scopes. But what exactly are Scope 1, 2, and 3 emissions — and how do you actually calculate them?
This guide breaks down the GHG Protocol's three-scope framework in practical terms, with examples relevant to Hong Kong businesses.
Carbon accounting (also called GHG accounting) is the process of measuring, reporting, and managing the greenhouse gas emissions produced by an organisation. Just as financial accounting tracks money in and money out, carbon accounting tracks the emissions generated by a company's operations — in units of tonnes of CO₂ equivalent (tCO₂e).
Carbon accounting serves several critical purposes:
The Greenhouse Gas Protocol (GHG Protocol), developed by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD), is the most widely used international accounting framework for greenhouse gas emissions. It categorises emissions into three "scopes" to help companies identify where their emissions come from and who has control over reducing them.
HKEX's climate disclosure requirements, aligned with international ESG reporting standards, mandate that listed companies report emissions across all three scopes using the GHG Protocol methodology.
Scope 1 emissions are direct GHG emissions from sources that a company owns or controls. These are the emissions you produce yourself, on-site.
Examples of Scope 1 emissions:
For a typical Hong Kong office-based company, Scope 1 emissions are usually small — perhaps just company vehicles and refrigerant leakage from building HVAC systems. But for manufacturers, logistics companies, and restaurants, Scope 1 can be substantial.
How to calculate Scope 1: Multiply the quantity of each fuel consumed by its corresponding emission factor. For example, if your delivery van burns 2,000 litres of diesel in a year and the diesel emission factor is 2.68 kgCO₂e per litre, your Scope 1 emissions from that van are approximately 5.36 tCO₂e.
Scope 2 emissions are indirect emissions from the generation of purchased electricity, steam, heating, and cooling that the company consumes. You don't produce these emissions directly, but your consumption of energy causes a power plant somewhere to emit them on your behalf.
Examples of Scope 2 emissions:
For most Hong Kong companies — especially those in commercial buildings — Scope 2 is the largest category. Hong Kong's electricity grid is predominantly fossil-fuel based, meaning every kilowatt-hour consumed carries a significant carbon footprint.
How to calculate Scope 2: Multiply total electricity consumed (in kWh) by the local grid emission factor. In Hong Kong, CLP and HK Electric publish annual emission factors. For example, if your office uses 100,000 kWh per year and the grid emission factor is 0.52 kgCO₂e/kWh, your Scope 2 emissions are approximately 52 tCO₂e.
Scope 3 emissions are all other indirect emissions that occur in a company's value chain — both upstream (suppliers) and downstream (customers, product use, disposal). These are the hardest to measure but often represent 70-90% of a company's total carbon footprint.
Examples of Scope 3 emissions:
Scope 3 has 15 categories under the GHG Protocol, and not all will be relevant to every company. The first step is conducting a materiality assessment to determine which categories are significant for your business.
How to calculate Scope 3: This is where it gets complex. Common approaches include:
Under the updated HKEX ESG Reporting Guide, listed companies must disclose Scope 1 and Scope 2 GHG emissions on a mandatory basis. For Scope 3, reporting is being phased in for larger issuers and will become mandatory over time. These requirements align Hong Kong with international climate disclosure standards including global ESG frameworks and the TCFD framework.
Companies that fail to report accurately face regulatory scrutiny, reputational damage, and potential trading suspension. More importantly, accurate carbon accounting enables meaningful emissions reduction strategies — which increasingly affect access to capital, customer contracts, and talent.
Carbon accounting can feel overwhelming — but it doesn't have to be. Our ESG Sustainable Solutions 4.0 course at Peak M&S Education Centre includes a dedicated hands-on carbon accounting module where you learn to:
You'll practice with real calculation tools and walk away with templates you can use at your workplace on Monday morning. Our experienced industry practitioners guide you through each step, so you gain genuine, job-ready skills — not just theory.
Whether you're a compliance officer preparing for HKEX reporting, a sustainability manager building a carbon inventory, or a professional looking to add high-demand skills, understanding Scope 1, 2, 3 emissions is essential.
Our next course intake is 25-26 July 2026, with government funding available for eligible applicants. Contact us today or WhatsApp +852 4423 7445 to enrol and learn practical carbon accounting from industry experts.
Enrol in ESG Sustainable Solutions 4.0. Next intake: 25-26 July 2026. Government funding available. Hands-on carbon accounting workshops included.
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