Scope 3 Emissions

Scope 3 emissions are the indirect greenhouse gas (GHG) emissions that occur across an organisation's value chain, excluding direct emissions (Scope 1) and indirect emissions from purchased energy (Scope 2). For most organisations they are the largest part of the carbon footprint. According to a 2024 analysis by CDP and BCG, supply-chain Scope 3 emissions are on average around 26 times higher than a company's direct operational emissions, which is why measuring and managing them is essential.

The 15 categories of Scope 3 emissions

The GHG Protocol divides Scope 3 into 15 categories, grouped into 8 upstream and 7 downstream.

Upstream activities

• 1. Purchased goods and services: emissions from producing the goods and services the company buys.
• 2. Capital goods: emissions from manufacturing machinery, equipment and other capital assets.
• 3. Fuel- and energy-related activities: upstream emissions from producing the fuels and energy the company uses, not already counted in Scope 1 or 2.
• 4. Upstream transportation and distribution: transport and distribution of purchased products in the company's supply chain.
• 5. Waste generated in operations: treatment and disposal of waste produced by the company's activities.
• 6. Business travel: employee travel for work in vehicles not owned by the company, such as flights and trains.
• 7. Employee commuting: travel of employees between home and work.
• 8. Upstream leased assets: operation of assets leased by the company and not included in Scope 1 or 2.

Downstream activities

• 9. Downstream transportation and distribution: transport and distribution of sold products after they leave the company.
• 10. Processing of sold products: further processing of intermediate products by third parties.
• 11. Use of sold products: emissions from customers using the products sold, often the largest category for many sectors.
• 12. End-of-life treatment of sold products: waste treatment and disposal of products at the end of their life.
• 13. Downstream leased assets: operation of assets the company owns and leases to others.
• 14. Franchises: operation of franchises not included in Scope 1 or 2.
• 15. Investments: emissions associated with the company's investments, especially relevant for financial institutions.

Benefits of addressing Scope 3 emissions

• Identifying reduction opportunities: measuring Scope 3 reveals the main sources of indirect emissions and where action is most effective.
• Improving value-chain efficiency: working with suppliers and customers can cut emissions and costs at the same time.
• Strengthening reputation: companies that tackle Scope 3 build trust with consumers, investors and partners.
• Meeting regulations and standards: frameworks such as the CSRD and science-based targets increasingly require Scope 3 reporting.

Challenges in measuring Scope 3

• Data availability: obtaining accurate, complete data from suppliers and customers is difficult.
• Supply-chain complexity: global value chains make it hard to track emissions at every stage.
• Methodology: choosing the right calculation method for each category takes expertise.

Strategies for reducing Scope 3 emissions

• Supplier collaboration: help suppliers improve efficiency and cut their emissions.
• Sustainable product design: design products that use fewer resources and emit less over their life cycle.
• Transport optimisation: improve routes and shift to more efficient transport modes.
• Remote work and sustainable mobility: reduce commuting and business-travel emissions.
• Customer engagement: raise awareness of product impacts and promote responsible consumption.

At Manglai we help companies measure their Scope 1, 2 and 3 emissions and prepare their sustainability reporting. Discover how Manglai can help you.