Peak M&S
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Practical ESG guide · Hong Kong

Scope 1, 2 and 3 emissions, without the jargon.

Start with the reporting boundary, classify the source, and keep the evidence. This short guide helps you ask the right questions before calculating a number.

By Peak M&S Education Centre · Published 25 September 2026

The three scopes at a glance

The GHG Protocol Corporate Standard separates a company’s direct emissions from indirect emissions. First decide which operations sit inside the company’s reporting boundary; then classify each source.

Direct

Scope 1

Emissions from sources the reporting company owns or controls—for example, fuel burned in its own vehicle or boiler.

Purchased energy

Scope 2

Indirect emissions from generating electricity, steam, heating or cooling that the company buys and uses.

Value chain

Scope 3

Other indirect emissions in the value chain, upstream or downstream, such as purchased goods, third-party transport or use of sold products.

Boundary matters: a leased vehicle or building is not automatically Scope 3. Classification can depend on the organisational-boundary method and lease arrangement. Check the GHG Protocol’s leased-asset guidance before assigning it.

A simple classification exercise

Imagine a Hong Kong services company preparing its first inventory. These are fictional examples, not data from a client or course graduate:

  1. Fuel for a company-controlled van: start with Scope 1 and retain fuel records.
  2. Electricity purchased for its office: start with Scope 2 and retain utility bills and the reporting period.
  3. Flights purchased from an airline: consider Scope 3 business travel and retain the travel and calculation assumptions.

The label alone is not a calculation. For each source, record who owns or controls it, the period covered, activity data, factor source and reviewer. This makes the resulting number easier to check and update.

A practical first-pass workflow

  1. Set the boundary. Name the reporting entity, sites and reporting period. Note your chosen control or equity-share approach before counting sources.
  2. Build a source register. List vehicles, fuel, purchased energy and likely upstream/downstream activities. Record the owner of each data set.
  3. Collect evidence. Keep bills, meter readings, fuel records and supplier data. Document missing data and assumptions rather than filling gaps silently.
  4. Calculate and review. Use appropriate, dated emission factors and retain the version and calculation method. Check units, double counting, year-on-year changes and sign-off.

The GHG Protocol Scope 3 Standard groups value-chain emissions into 15 categories. You need not treat every category as equally important: screen which activities are relevant and explain exclusions or data gaps.

What Hong Kong listed companies should check

HKEX’s current ESG Reporting Code (Appendix C2) requires listed issuers to disclose Scope 1 and Scope 2 emissions. Other climate-disclosure obligations depend on the issuer and reporting year. Check the Code and HKEX’s current implementation guidance for the applicable timetable; do not rely on an old blog table or assume that Scope 3 follows the same rule for every issuer.

This article is a learning aid, not a substitute for the standards or company-specific reporting advice.

Practise the evidence check

Our free five-minute ESG exercise asks you to check a fictional electricity-reduction claim. In the confirmed 24–25 October ESG Sustainable Solutions 4.0 class, the published syllabus includes inventory boundaries, activity data and a Scope 3 screening exercise. See the exact venue, fee, conditions and enrolment process before paying. Course attendance does not guarantee employment or a funding award.

Primary sources