Climate targets are only as credible as the inventory behind them. Under the GHG Protocol, a company’s emissions are grouped into three scopes, and understanding the difference is the first step towards any target, disclosure, or decarbonization plan.
The three scopes
Scope 1: direct emissions
Emissions from sources your company owns or controls: boilers, furnaces, generators, company vehicles, and process emissions from your own production. If it burns fuel on your site, it is Scope 1.
Scope 2: purchased energy
Indirect emissions from the electricity, steam, heating, and cooling you buy. For most manufacturers in Indonesia, purchased grid electricity is the single largest line in the inventory, which makes the emission factor you apply and the way you document renewable energy purchases genuinely material.
Scope 3: the value chain
Everything else, across fifteen categories: purchased goods and services, upstream transport, business travel, employee commuting, waste, use of sold products, and end-of-life treatment. Scope 3 is usually the largest share of a company’s footprint and the hardest to quantify, because the data belongs to other people.
It is also where most buyer pressure now lands. When a global brand sets a supply chain target, its suppliers’ Scope 1 and 2 become the brand’s Scope 3, and the request for data flows downwards.
Building an inventory that holds up
- Set the boundaries. Decide the organizational boundary (operational or equity control) and which facilities are inside it.
- Choose a base year. Targets are measured against it, so it needs complete and defensible data.
- Collect activity data. Fuel consumption, electricity bills, refrigerant top-ups, materials purchased, freight volumes.
- Apply the right emission factors, and record the source and version of every factor used.
- Document assumptions. Every estimate should be reproducible by someone who was not in the room.
- Prepare for assurance. If the number will be published or verified under ISO 14064, the evidence trail matters as much as the result.
From inventory to decarbonization
Once the inventory is in place, the work becomes strategic: setting targets aligned with SBTi and the Paris Agreement, building a Net Zero roadmap, prioritising the reduction measures that actually move the largest lines, and assessing climate risk under TCFD and IFRS S2. Disclosure follows from there, whether through a sustainability report under GRI, SASB, or ISSB/IFRS S1 and S2, or through a rating process such as CDP.
The order matters. Companies that set a headline target before they have an inventory usually end up revising the target.
Common pitfalls in a first inventory
- Refrigerant leakage ignored. Top-ups of air conditioning and chiller systems are Scope 1, and with high global warming potential gases the numbers are rarely trivial.
- Outdated grid emission factors. Using a factor from several years ago quietly misstates the largest line in most Indonesian inventories.
- Renewable energy claimed without instruments. A green tariff or on-site solar needs documentation to be reflected in market-based Scope 2 reporting.
- Boundary confusion between Scope 2 and Scope 3. Transmission and distribution losses belong in Scope 3 category 3, not Scope 2.
- No owner for the data. If nobody is accountable for collecting fuel and electricity records monthly, the next inventory becomes another one-off project rather than a system.
None of these are exotic. They are simply the points where a first inventory usually has to be redone, which is why building the data process matters as much as producing the number.
How Aruni Sustainability can help
We prepare Scope 1, 2, and 3 inventories, set science-based targets, develop Net Zero roadmaps, and prepare organisations for GHG verification and assurance. Our team’s experience includes emissions accounting and decarbonization strategy for PLN sub-holdings, GHG roadmaps for Astra property suppliers, Scope 3 and sustainable packaging work with Grab Indonesia, and GHG accounting training for supplier communities in Subang.
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