Carbon Accounting Guide

Scope 3 Emissions: Understanding Indirect Emissions Across the Value Chain

Summary

Scope 3 emissions are indirect greenhouse gas (GHG) emissions that occur throughout a company’s value chain, both upstream and downstream. Unlike Scope 1 and 2, these emissions are not under the direct control of the company, but they represent the most significant portion of the total carbon footprint for many organisations. Measuring Scope 3 emissions is vital for understanding and addressing a company’s broader environmental impact.

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

The GHG Protocol separates Scope 3 into 15 categories, split between upstream and downstream activities:

Upstream: purchased goods and services, capital goods, fuel- and energy-related activities, upstream transportation and distribution, waste generated in operations, business travel, employee commuting, and upstream leased assets.

Downstream: downstream transportation and distribution, processing of sold products, use of sold products, end-of-life treatment of sold products, downstream leased assets, franchises, and investments.

See Deeper Insights Into The Scope 3 Categories for what each category covers and common sources of data.

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.

Addressing Scope 3 emissions often requires collaboration with suppliers, customers, and other stakeholders. By taking steps to engage the value chain, improve data collection, and reduce emissions, organisations can lead the way in creating a sustainable future.

Reducing Scope 3 emissions is challenging but also the most impactful action a company can take to mitigate climate change and contribute to global sustainability goals.