Scope 3 Emissions

Intermediate

Scope 3 emissions are all the indirect greenhouse gas emissions that occur in an organisation’s value chain, both upstream from its suppliers and downstream from the use and disposal of its products, excluding Scope 2.

The Greenhouse Gas Protocol divides Scope 3 into fifteen categories, including purchased goods and services, business travel, employee commuting, transport of goods, the use of sold products, waste and investments.

For many companies, Scope 3 is by far the largest part of their carbon footprint. For example, most of a car maker’s emissions come from the fuel burned by the cars it sells and from the steel and parts it buys. For an oil company, most emissions come from customers burning its products. For banks and investors, financed emissions from the companies they lend to and invest in fall under Scope 3.

Scope 3 emissions are the hardest to measure, because they depend on data from suppliers and customers, which is often estimated. They also overlap: one company’s Scope 3 emissions are another company’s Scope 1 or 2 emissions.

Scope 3 reporting is increasingly required, at least for significant categories, under frameworks such as the ISSB standards, though usually with transition relief. Reducing Scope 3 requires working with suppliers and customers and changing products.

For worked examples and full lessons, visit notesbysara.org.