What Are Scope 3 Emissions and Why Do They Matter?
If you're starting to measure your organisation's carbon footprint, Scope 3 emissions can be one of the harder areas to get your head around.
You may already understand the emissions from fuel your business uses or the electricity powering your buildings, but Scope 3 can include more complicated areas like supplier emissions and purchased products.
Suddenly, your carbon footprint can feel much bigger than the activities happening within your own organisation.
The good news is that you don't need to understand or measure everything at once.
In simple terms, Scope 3 emissions are the indirect greenhouse gas emissions connected to your organisation's wider activities and value chain.
They happen outside the sources your organisation owns or controls, but are still connected to the way it operates.
Depending on your organisation, this could include emissions associated with:
The goods and services you purchase
Your suppliers and supply chain
Business travel
Employee commuting
Freight and deliveries
Waste
Leased assets
How customers use the products you sell
What happens to products at the end of their life
If that sounds like a lot, remember that not every Scope 3 category will be equally relevant to every organisation.
You may also already hold more of the information needed for Scope 3 emissions tracking than you realise, across invoices, travel bookings, supplier records, expense systems and other everyday business data.
The first step is simply understanding what counts as Scope 3 for your organisation and where those emissions might be coming from.
In this guide, we'll break it all down and look at the 15 Scope 3 emissions categories, everyday examples, why these emissions matter and how you can start measuring them using the information you already have.
What Are Scope 3 Emissions?
Scope 3 emissions are greenhouse gas emissions connected to an organisation's activities that come from sources it doesn't own or control.
They're also commonly described as value chain emissions, because they can occur throughout the wider chain of activities connected to a business.
That could be before something reaches your organisation, such as manufacturing a product you've purchased, or afterwards, such as a customer using a product you've sold.
The Greenhouse Gas Protocol divides corporate greenhouse gas emissions into three scopes:
Scope 1 emissions are direct emissions from sources an organisation owns or controls.
Scope 2 emissions are indirect emissions associated with purchased electricity, steam, heating and cooling consumed by the organisation.
Scope 3 emissions cover other indirect emissions across the organisation's value chain.
One of the things that can make Scope 3 confusing at first is that your business doesn't necessarily produce these emissions itself.
For example, imagine one of your employees flies from London to New York for a business meeting. While your organisation doesn't own the aircraft or burn the aviation fuel, the journey still happened because of your business activity.
Those emissions can therefore form part of your Scope 3 footprint under business travel.
Once you start thinking about Scope 3 in terms of the activities your organisation relies on rather than just the things it owns, it becomes much easier to understand.
What's The Difference Between Scope 1, Scope 2 And Scope 3 Emissions?
A simple way to understand Scope 3 emissions is to see them alongside Scope 1 and Scope 2.
Emissions scope | What does it cover? | Simple example |
Scope 1 | Direct emissions from sources your organisation owns or controls | Fuel burned in a company-owned vehicle |
Scope 2 | Indirect emissions associated with purchased electricity, steam, heating or cooling | Electricity purchased to power an office |
Scope 3 | Other indirect emissions connected to your wider value chain | Business travel, employee commuting or purchased goods |
In simple terms:
Scope 1: emissions you produce directly from sources you own or control.
Scope 2: emissions associated with the energy you purchase and consume.
Scope 3: other indirect emissions connected with your organisation's wider activities.
There are more detailed accounting rules behind each scope, but you don't need to learn all of those before you can start understanding your footprint.
If you'd like to understand the three scopes in more detail, our guide to Scope 1, 2 and 3 carbon emissions explains how they fit together.
What Are The 15 Scope 3 Emissions Categories?
One reason Scope 3 can initially look overwhelming is that it covers lots of different activities.
To make those activities easier to organise, the GHG Protocol divides Scope 3 emissions into 15 categories, split between upstream emissions and downstream emissions.
An easy way to understand the difference is to think about where an activity sits within your wider value chain.
Upstream Scope 3 emissions generally happen in the goods, services and activities your organisation relies on before or in support of its own operations.
Downstream Scope 3 emissions generally relate to what happens to goods and services after they leave your organisation.
Upstream Scope 3 Emissions Categories
The eight upstream categories are:
Purchased goods and services - emissions associated with producing the goods and services your organisation buys.
Capital goods - emissions associated with assets you purchase, such as machinery, equipment and buildings.
Fuel and energy-related activities - certain emissions connected with purchased fuel and energy that aren't already included in Scope 1 or Scope 2.
Upstream transportation and distribution - relevant emissions from transporting and distributing purchased goods.
Waste generated in operations - emissions associated with treating and disposing of waste your organisation generates.
Business travel - emissions from employees travelling for work using transport not owned or operated by your organisation.
Employee commuting - emissions associated with employees travelling between home and work.
Upstream leased assets - certain emissions from assets your organisation leases that aren't included within Scope 1 or Scope 2.
Downstream Scope 3 Emissions Categories
The seven downstream categories are:
Downstream transportation and distribution - certain emissions associated with transporting and distributing products after they're sold.
Processing of sold products - emissions from further processing of intermediate products your organisation sells.
Use of sold products - emissions created when customers use products you've sold.
End-of-life treatment of sold products - emissions associated with disposal, recycling or other treatment when sold products reach the end of their life.
Downstream leased assets - certain emissions associated with assets your organisation owns and leases to somebody else.
Franchises - relevant emissions associated with franchise operations.
Investments - certain emissions associated with an organisation's investments.
While there are 15 possible categories businesses may need to track, it's important to remember that different Scope 3 emissions categories will matter to different organisations.
A professional services company is likely to have a very different Scope 3 footprint from a manufacturer making and distributing physical products.
The categories give you a framework for identifying where your own value chain emissions may be occurring.
What Are Some Scope 3 Emissions Examples?
Sometimes it's easier to forget the category numbers for a moment and look at what Scope 3 could actually mean during a normal working day.
Common Scope 3 emissions examples include:
An employee taking a flight or train to a business meeting
Employees commuting between home and work
Buying laptops, furniture or other equipment
Purchasing materials or services from suppliers
A third-party logistics company transporting goods
Hotel stays associated with business travel
Waste being treated by another organisation
Transporting sold products to customers in relevant circumstances
Customers using products your business has sold
Products being disposed of or recycled at the end of their life
There is another useful principle to understand here: an emission can fall into different scopes for different organisations.
For example: Imagine your business pays a delivery company to transport some goods.
For the delivery company, the fuel burned in the delivery vehicle may form part of its Scope 1 emissions, while this may instead sit within part of your Scope 3 emissions.
You're both looking at the same wider activity, but from two different organisational carbon footprints.
Are Supply Chain Emissions Scope 3?
Many supply chain emissions can form part of an organisation's Scope 3 emissions.
Think about what might happen before something your business purchases even reaches you:
Raw materials may need to be extracted.
Products or components may be manufactured.
Goods may move between different suppliers.
Packaging may be produced.
Items may then need to be transported.
Emissions can occur throughout that process even though your organisation doesn't own the factories, vehicles or equipment involved.
This is why understanding your Scope 3 supply chain can be such an important part of building a fuller carbon footprint.
However, Scope 3 isn't only about suppliers.
Supply chain emissions are part of the wider picture of value chain emissions, which can also extend downstream to activities such as transportation, product use and end-of-life treatment.
Why Do Scope 3 Emissions Matter?
If you've already measured your fuel and electricity, you might reasonably wonder why you need to look further.
The simple answer is that Scope 1 and Scope 2 don't always show the whole picture.
For many organisations, a significant amount of the greenhouse gas emissions associated with their activities can occur elsewhere in the value chain.
Understanding Scope 3 can help you:
See more of your carbon footprint, rather than looking only at your own buildings, vehicles and purchased energy.
Identify emissions hotspots across suppliers, travel, transport, products and other activities.
Understand where to focus, rather than trying to reduce every source of emissions equally.
Have better conversations with suppliers about the emissions associated with purchased products and services.
Improve carbon data over time as better information becomes available.
Support Scope 3 emissions reporting where it is relevant to your organisation.
Make more informed decisions about procurement, travel and other business activities.
The aim of Scope 3 carbon accounting is to give you better visibility of where emissions associated with your organisation actually occur.
Then, you can start deciding where better data or emissions reductions could make the greatest difference.
Why Are Scope 3 Emissions Harder To Measure?
If you're finding Scope 3 harder to measure than Scope 1 or Scope 2, there's a good reason for that: a lot of the data may not sit directly with you.
For Scope 1, you might have fuel records for company vehicles, and for Scope 2, you may have electricity bills for your buildings.
For Scope 3, the information could be spread across:
Supplier records
Procurement systems
Employee expenses
Travel bookings
Commuting information
Freight and logistics providers
Waste records
Product information
Customer or product-use data
You may also find that the quality of the information varies between suppliers with detailed records and others that only provide an invoice showing how much you've spent.
With that said, that doesn't mean you can't get started. It's important to rememebr your first Scope 3 footprint doesn't have to be your final one.
You can begin with the best information reasonably available, clearly record where you've used estimates or assumptions and improve your data as your Scope 3 emissions tracking develops.
You may also already have more useful carbon data within your organisation than you think.
How To Calculate Scope 3 Emissions
Unfortunately there isn't one calculation that works for every Scope 3 activity, how you calculate Scope 3 emissions depends on the category you're measuring and the information available.
However, many carbon calculations follow a straightforward principle:
Activity data × emission factor = greenhouse gas emissions
For example, if you know how far an employee travelled and what form of transport they used, an appropriate emission factor can be applied to that activity data to estimate the emissions associated with the journey.
Depending on what you're measuring, Scope 3 carbon accounting can use different types of data:
Activity-based data, such as kilometres travelled, kilograms of waste or quantities of materials purchased.
Spend-based data, using the amount spent on a product or service to estimate emissions where more detailed information isn't available.
Supplier-specific data, using information supplied about the emissions associated with a particular product or service.
Hybrid data, combining different methods where appropriate.
The GHG Protocol provides more detailed Scope 3 calculation guidance for the 15 categories.
If some of those terms are new to you, don't worry. You don't necessarily need the most detailed data possible on day one.
A practical starting point is to use the information you have, understand its limitations and gradually replace broader estimates with better activity or supplier data where possible.
What Is Scope 3 Emissions Reporting?
Scope 3 emissions reporting is the process of measuring and disclosing the indirect greenhouse gas emissions associated with an organisation's value chain.
What an organisation needs to include in its Scope 3 reporting will depend on factors such as the reporting framework being followed, the organisation itself and any regulations that apply to it.
An activity being classified as Scope 3 does not automatically mean that every UK business has a legal requirement to report it.
Reporting requirements vary, so organisations should check what specifically applies to them rather than assuming Scope 3 reporting is always mandatory or always voluntary.
Even where there isn't a direct reporting requirement, businesses may still measure Scope 3 emissions to:
Respond to customer or supply-chain requests
Support sustainability or carbon reduction targets
Understand their wider carbon footprint
Participate in voluntary reporting
Answer requests from investors or other stakeholders
Identify areas where emissions could potentially be reduced
So Scope 3 emissions tracking can still be useful even when you're not completing a formal carbon report.
How Can Businesses Start Tracking Scope 3 Emissions?
If you've reached this point and you're thinking, "Where am I supposed to start with all of this?", the answer isn't with all 15 categories at once.
A practical way to start tracking Scope 3 emissions is to:
Map your value chain. Look at the suppliers, activities, products and services connected to your organisation.
Identify relevant Scope 3 emissions categories. Work out which parts of the framework are likely to apply to your activities.
Find the data you already have. Check invoices, procurement systems, expenses, travel bookings, waste records and supplier information.
Spot the gaps. Identify where you're missing information and which gaps are most useful to improve first.
Choose an appropriate calculation method. Depending on the data available, this could involve activity data, spend data or supplier-specific information.
Record estimates and assumptions. This makes it easier to understand the limitations of your footprint and improve it later.
Look at the results. Identify which activities or categories appear to contribute most significantly to your emissions.
Improve over time. Replace estimates with better information where it is practical and useful to do so.
You don't need perfect Scope 3 data before you can learn something useful from it, the goal is to create a process you can build on.
Can Scope 3 Software Make Tracking Easier?
As your carbon footprint grows, keeping track of Scope 3 information across different spreadsheets, teams, suppliers and systems can become difficult.
This is where Scope's carbon tracking software can help.
Scope gives you one place to bring together the activity data used to measure your carbon footprint, calculate emissions using relevant emission factors and build a clearer picture of where your emissions are coming from.
This can be particularly useful for Scope 3 emissions tracking, where the information you need may be spread across different parts of your organisation and wider value chain.
With Scope, you can:
Bring carbon data together rather than relying on disconnected spreadsheets and files.
Track different emissions sources across your organisation and wider activities.
Calculate carbon emissions from the activity data you collect.
Keep your carbon data organised so it's easier to review and update.
Improve your emissions data over time as more accurate information becomes available.
Track business and event emissions in one platform, helping you build a more connected picture of your organisation's carbon impact.
Include your suppliers directly in the process.
Scope 3 software can't remove every data gap you might face, but it can give you a much clearer process for managing the information you do have and improving it over time.
Scope Carbon Tracking even allows suppliers to be invited into the software themselves, completing their relevant modules for you without needing to chase them yourself.
Scope also allows organisations to track business and event carbon emissions within one platform.
That means businesses running conferences, exhibitions, corporate events and other experiences can measure individual event footprints while keeping that carbon information connected to their wider organisational picture.
And you don't need to wait until your Scope 3 data is perfect to get started. Scope helps you begin with the information available today and build a stronger carbon footprint as your data improves.
Are Events Included In Scope 3 Emissions?
For organisations running conferences, exhibitions, meetings and other corporate events, events can also contribute to Scope 3 emissions.
Think about everything involved in delivering one event:
Employees and attendees may travel
Hotels may provide accommodation
Equipment may be transported
Food and drink may be purchased
Production materials may come from suppliers
Waste may be generated
Many of those activities happen outside your organisation's direct operations.
Depending on the activity and how your greenhouse gas inventory is being accounted for, relevant event emissions can therefore feed into different Scope 3 categories.
This is one reason we believe business and event carbon tracking shouldn't always be treated as completely separate exercises.
Measuring the carbon footprint of an individual event can give your organisation useful activity data while also helping you understand how events contribute to your wider environmental impact.
Scope 3 Emissions FAQs
What Is The Simple Definition Of Scope 3 Emissions?
Scope 3 emissions are indirect greenhouse gas emissions connected to an organisation's wider value chain. They can include emissions from suppliers, purchased goods and services, business travel, employee commuting, transport, waste and activities associated with products sold.
What Are Examples Of Scope 3 Emissions?
Common Scope 3 emissions examples include business flights, employee commuting, purchased products and services, third-party freight, waste treatment and certain emissions associated with customers using or disposing of products sold by a business.
What Are The 15 Scope 3 Emissions Categories?
The GHG Protocol divides Scope 3 emissions into 15 categories. Eight relate to upstream activities, including purchased goods and services, business travel and employee commuting. Seven relate to downstream activities, including transportation, product use, end-of-life treatment, franchises and investments.
Are Supply Chain Emissions Scope 3?
Many supply chain emissions can fall within Scope 3 for the organisation purchasing the relevant goods or services. However, Scope 3 extends beyond the supply chain and can also include downstream value chain emissions.
Is Business Travel Scope 3?
Business travel can fall within Scope 3 Category 6 when employees travel for business using vehicles owned or operated by third parties.
Is Employee Commuting Scope 3?
Employee commuting is Scope 3 Category 7 and covers emissions associated with employees travelling between their homes and places of work.
Do Businesses Have To Report Scope 3 Emissions?
Not every UK business is automatically required to report all Scope 3 emissions. Scope 3 emissions reporting requirements depend on the organisation and the reporting framework or regulations that apply to it. Businesses should therefore check their specific requirements.
How Do You Calculate Scope 3 Emissions?
How you calculate Scope 3 emissions depends on the category and information available. Common approaches use activity data, spend data or supplier-specific information. Many calculations involve applying an appropriate emission factor to activity data to calculate greenhouse gas emissions in CO2e.
Building A Clearer Picture Of Your Carbon Footprint
If Scope 3 still feels bigger and more complicated than Scope 1 or Scope 2, that's understandable.
You're potentially looking at activities across suppliers, employees, transport providers, products, customers and other parts of your value chain. You won't necessarily have perfect information about all of them from the beginning.
But the good news is, you don't need to solve everything at once.
Start by understanding which Scope 3 emissions categories are relevant to your organisation. Look at the information you already have, identify the biggest gaps, use reasonable estimates where appropriate and then improve the quality of your data over time.
As that picture develops, Scope 3 stops being an abstract carbon accounting exercise and starts becoming useful business information.
You can see where emissions are coming from, understand which activities contribute most and make better-informed decisions about where to focus next.
That's ultimately why Scope 3 emissions matter: they help you see more of the environmental impact connected to the way your organisation actually operates.
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