Almost every climate commitment a company makes — a net-zero target, a supplier requirement, a sustainability report — rests on one number: the greenhouse-gas inventory. That inventory is organised into three scopes, defined by the GHG Protocol Corporate Standard. Getting the scopes right is the difference between a report that survives assurance and one that quietly falls apart under questioning.

Scope 1: direct emissions you control

Scope 1 covers emissions from sources a company owns or controls. In Indonesian industry that usually means diesel generators, boilers, kilns, furnaces, the company vehicle fleet, heavy mining equipment, and process emissions such as calcination in cement production. Refrigerant leakage from chillers and air-conditioning also sits here, as do fugitive methane emissions from landfills, wastewater lagoons, and gas handling.

Scope 1 is the most controllable category, and typically the easiest to calculate: fuel purchase records multiplied by an emission factor. The common mistakes are boundary mistakes, not maths mistakes — leased equipment excluded because "it isn't ours", refrigerant top-ups treated as maintenance rather than emissions, or generator diesel booked to a site that was later divested.

Scope 2: purchased energy

Scope 2 covers indirect emissions from purchased electricity, heat, steam, and cooling. The fuel is burned at a power station, but the company is responsible for the demand. The GHG Protocol requires two figures where possible:

  • Location-based: consumption multiplied by the average grid emission factor for the region — for most Indonesian operations, the Jamali or relevant interconnection grid factor.
  • Market-based: consumption adjusted for contractual instruments such as renewable energy certificates or a green tariff (for example PLN's Renewable Energy Certificate scheme).

Reporting both is not academic. Buyers and lenders increasingly ask which number a target is measured against, and a target set on market-based figures can be met with procurement while physical grid consumption stays flat.

Scope 3: the value chain

Scope 3 covers everything else: emissions that occur because of the business but outside its operational control. The GHG Protocol splits this into fifteen categories, including purchased goods and services, capital goods, fuel- and energy-related activities, upstream and downstream transport, waste, business travel, employee commuting, leased assets, processing and use of sold products, and investments.

For most companies Scope 3 is 70–90% of the total footprint. For a manufacturer it is dominated by purchased raw materials; for a bank, by financed emissions; for a coal or gas producer, by category 11, use of sold products. This is also where data quality is weakest — early inventories usually rely on spend-based factors, then improve to supplier-specific data for the largest categories.

How to build the first inventory

  1. Set the boundary. Choose an organisational boundary (operational control, financial control, or equity share) and document which legal entities and sites are inside it.
  2. Pick a base year. Choose a year with reasonable data quality and write a recalculation policy for acquisitions, divestments, and methodology changes.
  3. Collect activity data. Fuel litres, kWh, refrigerant kilograms, tonne-kilometres, procurement spend. Record the source document for every figure — assurance is about traceability, not elegance.
  4. Apply emission factors. Use a consistent, cited factor set (IPCC, DEFRA, national grid factors) and store the version you used.
  5. Screen Scope 3. Estimate all fifteen categories roughly, then invest effort only where the numbers are material.
  6. Document and review. A short methodology note covering boundary, factors, assumptions, and exclusions makes the next cycle far cheaper.

Why the scopes matter commercially

Three pressures now convert the inventory into a business issue. Disclosure frameworks — IFRS S2, adopted in a growing number of markets, and OJK reporting expectations in Indonesia — require scope-level data. Export customers increasingly pass down carbon requirements, and the EU's CBAM asks for embedded emissions on covered goods. Lenders and investors use the inventory to assess transition risk.

Counting also reveals savings. Roughly a third of the reductions we see in early engagements come from things a plant manager already suspected: oversized compressors, steam leaks, night-time base load, an idle chiller running at weekends. The inventory simply makes them visible and comparable.

Common pitfalls

  • Double counting between Scope 1 and Scope 2 when on-site generation is metered twice.
  • Treating renewable energy certificates as a Scope 1 reduction.
  • Ignoring Scope 3 category 11 for fuel and product companies, where it dominates the footprint.
  • Changing factor sets between years without restating the base year, which makes trends meaningless.
  • Keeping the inventory in a spreadsheet nobody else can rebuild after the analyst leaves.

From measurement to action

An inventory is a diagnostic, not an outcome. Once the scopes are stable, the useful work is a marginal abatement cost curve: every measure ranked by cost per tonne avoided, with capital requirement and payback. That turns a compliance exercise into a capital plan — efficiency and process changes first, electricity procurement next, then process redesign or fuel switching, and high-quality carbon credits only for the genuinely hard residual.

If you are starting from zero, the practical sequence is a Scope 1 and 2 inventory in the first cycle, a Scope 3 screening alongside it, and supplier engagement in the categories that turn out to matter. NETAXIS runs that sequence end to end, from data collection through to an actionable reduction roadmap.