Scope 3 emissions are greenhouse gas emissions that result from a company’s activities but occur at sources it does not own or control, across its upstream and downstream value chain.
What Scope 3 covers
Producing purchased materials, transporting products, employee travel, and the use and disposal of sold products all fall into Scope 3. The GHG Protocol treats it separately from Scope 1 (direct) and Scope 2 (purchased energy), with its own standard. For Scope 1 and 2, see GHG emissions calculation.
Scope 3 matters because of its size. In manufacturing, retail, and financial services it often accounts for the large majority of a company’s total footprint, so Scope 1 and 2 alone do not show a company’s real climate impact. Because one company’s Scope 3 is another’s Scope 1 or 2, the same emissions appear in several inventories. That is by design: Scope 3 is a tool for each company to understand its value-chain impact and find reduction opportunities, not a national total.
Why companies are asked for it now
- Disclosure. IFRS S2 requires Scope 3 emissions and the categories included, with transition relief in the first year. ESRS E1 requires Scope 3 for significant categories, with excluded categories explained.
- Customer requests. Global brands ask suppliers for product-level emissions to calculate their own Scope 3, so companies without any disclosure obligation still have to provide data.
- Targets. Science-based targets generally have to cover Scope 3 when it makes up a large share of total emissions.
The 15 categories
| Upstream | Downstream |
|---|---|
| 1. Purchased goods and services | 9. Downstream transportation and distribution |
| 2. Capital goods | 10. Processing of sold products |
| 3. Fuel- and energy-related activities (not in Scope 1 or 2) | 11. Use of sold products |
| 4. Upstream transportation and distribution | 12. End-of-life treatment of sold products |
| 5. Waste generated in operations | 13. Downstream leased assets |
| 6. Business travel | 14. Franchises |
| 7. Employee commuting | 15. Investments |
| 8. Upstream leased assets |
Four calculation methods
| Method | Data used | Accuracy | Effort |
|---|---|---|---|
| Supplier-specific | Product-level emissions reported by suppliers | Highest | Highest |
| Hybrid | Supplier Scope 1 and 2 data plus secondary data for upstream inputs | High | High |
| Average-data | Physical quantities (kg, units) × industry-average factors | Medium | Medium |
| Spend-based | Spend × environmentally extended input-output (EEIO) factors | Lowest | Lowest |
Most companies start spend-based to find the hotspots, then move the largest categories toward average-data and supplier-specific methods. For a detailed comparison, see our guide to choosing a Scope 3 calculation method.
Process
- Screen all 15 categories with rough estimates and decide which are relevant.
- Set the boundary and document excluded categories with reasons.
- Collect data from purchasing, logistics, and travel systems, and from suppliers.
- Calculate with the most accurate method available for each category.
- Assess data quality and plan improvements, especially supplier engagement for the largest categories.
Data quality
Scope 3 relies heavily on secondary data, so explain your methods, factor sources, and the share of primary data in each category. Track changes in methods year to year so trends reflect real changes rather than new data. Getting primary data from suppliers is usually the hardest part; see how to collect supply chain data.
Aentscope classifies unstructured purchase data with AI, matches emission factors by industry, country, and year, and gives suppliers a portal to submit primary data and evidence directly.
Related regulations and standards
| Type | Name | Relevance |
|---|---|---|
| International standard | GHG Protocol Corporate Value Chain (Scope 3) Standard | Categories and calculation rules |
| Guidance | GHG Protocol Technical Guidance for Calculating Scope 3 Emissions | Category-level methods |
| Disclosure standard | IFRS S2 | Scope 3 disclosure and measurement framework |
| EU regulation | ESRS E1 | Scope 3 for significant categories |