Scope 1, 2, 3 and CSRD in Manufacturing

Scope 1, 2 and 3 are greenhouse gas emission categories under the GHG Protocol. The CSRD (Corporate Sustainability Reporting Directive) makes this framework effectively mandatory for many EU companies: emissions must be quantified, reported and backed by targets. For manufacturing companies this is directly linked to production operations and plant-level data.

Scope 1, 2, 3: What the Categories Mean

Scope 1 covers direct emissions from sources the company controls: combustion of gas, oil or diesel in burners, furnaces and dryers, diesel forklifts and internal transport, process gases and refrigerant leakages. These emissions largely originate in maintenance and production – not in controlling.

Scope 2 covers indirect emissions from purchased electricity and external energy. For manufacturers often the largest visible block and the fastest lever for improvement through efficiency measures, load management or green electricity. Key metrics: kWh per part, CO₂ per part per line.

Scope 3 covers all other indirect emissions along the value chain – upstream through raw materials, purchased components and supplier transport, downstream through customer transport, product use and disposal. Scope 3 is methodologically most demanding and often the largest emission share in manufacturing.

What CSRD Specifically Requires

The CSRD requires affected companies to report under ESRS standards – particularly ESRS E1 (climate change) with disclosure of Scope 1, 2 and material Scope 3 including targets, measures and progress. The sustainability report becomes subject to audit. The double materiality principle requires both the company's impact on the environment and financial risks from ESG topics.

For manufacturers this means: emissions are taken as seriously in accounting terms as financial KPIs. Without clean data from plants, a CSRD-compliant report is practically impossible.

What Production Data the Plant Must Provide

From a plant perspective, the most important ESG data flows through four channels: energy consumption per line or consumer group linked to shifts and orders, output and scrap with product reference for kWh-per-part calculations, process parameters for energy-intensive steps, and downtime data showing where energy is consumed without output.

A modern MES is the connecting layer: it captures real-time production data, links energy and process data with orders and products and delivers structured exports to sustainability and ESG tools. Without an integrated production and energy data platform, Scope 1/2/3 reports either become extremely costly through Excel estimation exercises or remain technically unreliable.

FAQ

Do manufacturers always need to report Scope 3 in full? No – only what is material needs to be reported. In practice Scope 3 is material for many industrial companies, making at least stepwise quantification difficult to avoid.

Is an energy data tool without production reference sufficient? Not for metrics like kWh per part or CO₂ per product. The combination of energy and production data is essential – otherwise ESG KPIs remain at annual or plant level without operational steering value.

Is this just reporting or operationally relevant? Once CO₂ metrics feed into customer requirements, taxonomy quotas or financing conditions, Scope 1/2/3 data becomes directly business-relevant – with implications for pricing, location decisions and investments.