scope3

Scope 3 refers to indirect greenhouse gas emissions that occur in a company’s value chain and are not included in its direct emissions (Scope 1) or its energy-related indirect emissions (Scope 2). Under the Greenhouse Gas Protocol, Scope 3 covers emissions that result from activities outside the company’s own operations but are a consequence of its business activities, including both upstream and downstream emissions. Upstream categories include purchased goods and services, capital goods, fuel- and energy-related activities not already captured in Scope 1 or 2, upstream transportation and distribution, waste generated in operations, business travel, employee commuting, and upstream leased assets. Downstream categories include 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.

Measuring Scope 3 emissions is often more complex than Scope 1 or 2 because it relies on data from suppliers and customers and various estimation methods. Despite measurement challenges, Scope 3 often constitutes the largest portion of an organization’s total GHG footprint. Data quality, coverage, and the choice of calculation method can affect results, prompting ongoing efforts to improve data gathering and supplier engagement. Common approaches include activity data collection, spend-based or supplier-specific emission factors, and life cycle assessment.

Scope 3 is central to comprehensive climate strategy and reporting. Many organizations set Scope 3 reduction targets and report them through frameworks such as the GHG Protocol, CDP, and other sustainability reporting standards to reflect the full environmental impact of their value chains.