Scope 3 Emissions: Complete Value Chain Guide
All other indirect emissions in your value chain — often the largest share of a company's carbon footprint.
What Are Scope 3 Emissions?
Scope 3 emissions are all indirect emissions that occur in a company's value chain, both upstream and downstream. This includes everything from raw material extraction to product disposal. For many companies, Scope 3 represents 70-90% of their total carbon footprint.
The 15 Scope 3 Categories
Upstream Categories (1-8)
1. Purchased Goods and Services
Extraction, production, and transportation of goods and services purchased by the company.
2. Capital Goods
Emissions from the production of capital goods purchased by the company (equipment, machinery, buildings).
3. Fuel and Energy-Related Activities
Extraction, production, and transportation of fuels and energy purchased by the company (not already in Scope 1 or 2).
4. Upstream Transportation and Distribution
Transportation of products between suppliers and company facilities, and distribution by third parties.
5. Waste Generated in Operations
Disposal and treatment of waste generated in the company's operations.
6. Business Travel
Transportation of employees for business-related activities (air, rail, taxi, rental vehicles).
7. Employee Commuting
Transportation of employees between their homes and workplaces.
8. Upstream Leased Assets
Operation of assets leased by the company (not already included in Scope 1 or 2).
Downstream Categories (9-15)
9. Downstream Transportation and Distribution
Transportation of products from company facilities to customers, and retail/storage.
10. Processing of Sold Products
Processing of intermediate products sold by the company by third parties.
11. Use of Sold Products
End use of goods and services sold by the company (especially relevant for automobiles, electronics, appliances).
12. End-of-Life Treatment of Sold Products
Waste disposal and treatment of products sold by the company at end of life.
13. Downstream Leased Assets
Operation of assets owned by the company and leased to other entities.
14. Franchises
Operation of franchises in the reporting year (for franchisors).
15. Investments
Operation of investments, including equity and debt investments and project finance (for financial institutions).
Calculation Methods
The GHG Protocol provides multiple calculation methods depending on data availability:
- Spend-based method — Uses economic data and emission factors per currency unit
- Activity-based method — Uses physical quantities (kg, km, kWh) with specific emission factors
- Supplier-specific method — Uses primary data from suppliers
- Hybrid method — Combines supplier-specific data with secondary data for gaps
Example Calculation: Business Travel
Air travel: 50,000 km × 0.15 kg CO2e/km = 7,500 kg = 7.5 tCO2e
Rail travel: 10,000 km × 0.04 kg CO2e/km = 400 kg = 0.4 tCO2e
Total Category 6: 7.9 tCO2e
Why Scope 3 Matters
- Represents 70-90% of total emissions for most companies
- Required for CSRD reporting (ESRS E1)
- Required for SBTi target validation
- Critical for supply chain risk management
- Investors increasingly request Scope 3 data
- CDP scoring heavily weights Scope 3 disclosure
Reducing Scope 3 Emissions
- Supplier engagement — Require emissions reporting, set reduction targets
- Sustainable procurement — Prefer low-carbon suppliers and materials
- Product design — Design for lower use-phase and end-of-life emissions
- Circular economy — Reduce waste, enable recycling and reuse
- Travel policy — Reduce business travel, prefer rail over air, virtual meetings
- Remote work — Reduce employee commuting emissions
Calculate Your Scope 3 Emissions
Use our free calculator to estimate your value chain emissions across key categories. Export results for CSRD, CDP, or supplier engagement.
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