Scope 3 Emissions

Scope 3 emissions are all indirect GHG emissions that occur in a company’s value chain, excluding Scope 1 and 2 emissions. The GHG Protocol Corporate Value Chain (Scope 3) Standard (2011, under revision) categorises Scope 3 into 15 categories: upstream (Categories 1–8: purchased goods and services, capital goods, fuel and energy activities, upstream transportation, waste, business travel, employee commuting, upstream leased assets) and downstream (Categories 9–15: downstream transportation, processing of sold products, use of sold products, end-of-life treatment, downstream leased assets, franchises, investments). Scope 3 is mandatory under IFRS S2, California SB 253, and ESRS E1.

GHG Protocol Corporate Value Chain (Scope 3) Standard (2011, under public consultation for revision); IFRS S2, paragraph 29(b); ESRS E1; California SB 253.

Scope 3 typically accounts for 70–95% of a manufacturer’s total GHG footprint. Category 1 (purchased goods and services) and Category 11 (use of sold products) are frequently the largest Scope 3 categories for manufacturers. The GHG Protocol Scope 3 standard revision (public consultation 2025, final expected 2027) proposes a 95% coverage requirement and stricter data quality standards. Companies should begin upgrading Scope 3 data collection from spend-based estimates to activity or physical data from suppliers.