Calculating Scope 3 usually follows five steps: screening the 15 categories, choosing calculation methods, collecting data, calculating, and improving data quality over time. This article covers the second step: choosing a calculation method.
Two kinds of data
Before comparing methods, it helps to know what data they rely on.
- Primary data: data obtained directly from specific activities in your value chain, such as the energy a supplier actually used, distances actually traveled, or a supplier’s measured process emissions.
- Secondary data: industry averages and other generic data used when primary data is not available, such as average emission factors by product, country, or sector.
Primary data is more accurate but harder to get. Secondary data is easy to find, but it does not describe your own value chain.
Why choosing a method is harder for Scope 3
For Scope 1 and 2, methods are fairly settled, and many regulatory programs prescribe them. Scope 3 is different. There is no single official set of factors or formulas, so companies have to decide which approach fits each category.
Broadly, Scope 3 methods fall into three types:
| Method | Data | Accuracy | Ease of getting data |
|---|---|---|---|
| Supplier-specific | Product-level emissions from suppliers (primary) | High | Hard |
| Average-data | Quantities purchased × average emission factors (secondary) | Medium | Moderate |
| Spend-based | Amount spent × emissions per unit of spend (secondary) | Low | Easy |
The GHG Protocol recommends starting with what you can get, even if accuracy is low, and moving to more accurate methods over time. The Scope 3 technical guidance also describes a hybrid method that combines supplier data with secondary data.
The methods in practice: Category 1 example
Category 1, purchased goods and services, covers all upstream (cradle-to-gate) emissions from producing the goods and services you buy, up to the point you receive them. It is usually the largest category for manufacturers and retailers.
1. Supplier-specific method
This method uses primary data from suppliers. You ask each supplier for the cradle-to-gate emissions of the product they sell you (the raw material and manufacturing stages), then multiply by the quantity you purchased.
Emissions = Σ (quantity purchased × supplier-specific emission factor per unit)
It works well when your purchases are concentrated in a few products and suppliers can provide product footprints. In reality, many suppliers have never calculated a product footprint, which is why average data is often needed.
2. Average-data method
If you know how much you bought but suppliers can’t give you emission factors, you can use secondary, average emission factors per unit of product, for example from life cycle inventory (LCI) databases.
Emissions = Σ (mass or units purchased × average emission factor per unit)
Data is easier to obtain, but the result reflects industry averages rather than your actual suppliers.
3. Spend-based method
The spend-based method is the simplest and least accurate. It is also used for initial category screening. It works even when you only know how much you spent.
Emissions = Σ (amount spent × emissions per unit of spend for that product type)
Emission factors per unit of spend usually come from environmentally extended input-output (EEIO) models, which estimate the average emissions of each economic sector per dollar or euro of output. Examples include the US EPA’s supply chain emission factors and EXIOBASE.
How to choose
- Start with screening. Use spend-based estimates across all categories to find where emissions concentrate.
- Match effort to size. Put the most effort into the categories and suppliers that make up most of your Scope 3.
- Mix methods. Within one category, you can use supplier data for key suppliers and average or spend data for the rest.
- Document everything. Record the method, factor source, and share of primary data for each category, and improve them year by year.
The three types above are a simplification. In practice, methods are divided further by category and by the data you have. For definitions and the full list of categories, see Scope 3 and GHG emissions calculation.