Beyond Scope 2: What Scope 3 Category 1 Really Means for Cloud
Most cloud carbon tools stop at Scope 2 — the electricity to run your resources. That is the easy half. Here is what a complete cloud emissions number includes, and why it is what your enterprise customers actually need.
When a tool reports your "cloud carbon footprint," it almost always means Scope 2 — the electricity consumed to run your compute and storage. That is the easy part to estimate, and it is incomplete. When an enterprise customer asks for your cloud emissions to fold into their own Scope 3, a Scope 2-only number can understate the real figure.
The two halves of a real cloud emissions number
Operational emissions
The electricity to run the resource: IT energy (kWh) multiplied by datacenter PUE and by the grid carbon intensity of the region it runs in. A VM in a coal-heavy grid emits far more than the identical VM in a hydro-powered region. This should be reported two ways — location-based and market-based — which we come back to below.
Embodied emissions
The manufacturing footprint of the hardware — the cradle-to-gate emissions of building the servers and drives — amortised over their service life and allocated by the capacity your resource reserves. Scope 2 ignores this entirely. For cloud, embodied emissions can be a meaningful share of the total, and leaving them out is the most common way a cloud number comes in low.
Why cloud lands in your customer Scope 3 Category 1
You do not own the datacenter or the servers. From the boundary of the enterprise buying your software, your cloud usage is a purchased service — which the GHG Protocol classifies as Scope 3, Category 1 (purchased goods and services). Operational plus embodied together is the figure that maps cleanly onto what they have to report, which is exactly why they are asking you for it.
Location-based vs market-based
The GHG Protocol asks for dual reporting of Scope 2. Location-based uses the average carbon intensity of the local grid. Market-based reflects the clean-energy the provider has contracted for through instruments like power purchase agreements and renewable certificates. The two can differ substantially. Report both, and be honest that market-based figures depend on provider-reported instruments whose quality varies.
What makes the number defensible
The total is only as good as the method behind it. A defensible cloud emissions figure ships with a methodology note: the standard applied, the emission factors and their sources, the PUE and grid-intensity assumptions, the coverage period, and the known limitations. Transparency, not false precision, is what an auditor accepts.
How CloudRift computes it
CloudRift produces a GHG Protocol Scope 3 Category 1 figure across AWS, Azure, and GCP: operational emissions dual-reported (location- and market-based) plus embodied, with the methodology note attached and a one-click export. The complete number, not just the easy half.
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The bottom line
Scope 2 is a fine place to start and a poor place to stop. If a customer is going to report your emissions inside their own inventory, give them the operational-plus-embodied number with the method attached — the figure that actually belongs in Scope 3 Category 1.