Carbon Accounting Guide

Deeper Insights Into The Scope 3 Categories

Summary

Scope 3 emissions are indirect greenhouse gas (GHG) emissions that occur throughout a company’s value chain, both upstream and downstream. They are separated by the GHG Protocol into 15 categories.

What are Scope 3 Emissions?

Scope 3 emissions encompass all other indirect emissions that occur outside a company’s own operations but are a consequence of its activities. These emissions are divided into two broad categories: upstream and downstream emissions.

Categories of Scope 3 Emissions

Upstream Emissions

Upstream emissions occur before a product or service reaches the company. These include:

1. Purchased goods and services
   • Emissions from the production of goods and services the company buys.
   • Common Sources of Data: Procurement records, supplier emissions data, and spend-based emission factors.

2. Capital goods
   • Emissions from the production of long-term assets like machinery or buildings.
   • Common Sources of Data: Asset registers and supplier-provided lifecycle emissions data.

3. Fuel- and energy-related activities (not included in Scope 1 or Scope 2)
   • Emissions from the extraction, production, and transportation of fuels and energy purchased.
   • Common Sources of Data: Utility bills, fuel supplier data, and lifecycle emission factors.
4. Upstream transportation and distribution
   • Emissions from transporting goods to the company.
   • Common Sources of Data: Shipping records, logistics data, and carrier emissions reports.

5. Waste generated in operations
   • Emissions from waste disposal and treatment processes.
   • Common Sources of Data: Waste management records and landfill emission factors.

6. Business travel
   • Emissions from employee travel, such as flights, trains, and cars.
   • Common Sources of Data: Travel expense reports and transportation emission factors.

7. Employee commuting
   • Emissions from employees travelling to and from work.
   • Common Sources of Data: Employee surveys and transportation usage patterns.

8. Upstream leased assets
   • Emissions from assets leased by the company but not included in Scope 1 or 2.
   • Common Sources of Data: Lease contracts and asset emissions data.

Downstream Emissions

Downstream emissions occur after a product or service leaves the company. These include:

9. Downstream transportation and distribution
   • Emissions from transporting goods to customers.
   • Common Sources of Data: Shipping and delivery data.
10. Processing of sold products
    • Emissions from additional processing of sold products.
    • Common Sources of Data: Customer supply chain data and lifecycle assessments.
11. Use of sold products
    • Emissions from the use of goods or services sold by the company.
    • Common Sources of Data: Product usage data and emission factors for end-use.
12. End-of-life treatment of sold products
    • Emissions from disposing or recycling sold products.
    • Common Sources of Data: Recycling and waste management data.
13. Downstream leased assets
    • Emissions from assets leased to other organisations.
    • Common Sources of Data: Lease agreements and asset energy usage data.
14. Franchises
    • Emissions from operations of franchised businesses.
    • Common Sources of Data: Franchisee activity reports and utility data.
15. Investments
    • Emissions from financial investments and portfolios.
    • Common Sources of Data: Investment portfolios and sustainability reports.

Conclusion

Scope 3 emissions provide a comprehensive view of a company’s carbon footprint across its entire value chain. While measuring these emissions can be complex, it is crucial for identifying the broader impact of a company’s activities and for driving meaningful change. You can start by measuring just a few categories and then expand to further as your data collection grows. It is best to start somewhere and improve over time!