Scope 3 emissions are all indirect emissions that occur in a company's value chain — both upstream (suppliers, purchased goods) and downstream (use of products, end-of-life). They typically represent 70-90% of total corporate emissions.
Emissions from purchased goods, services, and activities
Emissions from production of goods and services purchased
Emissions from production of capital goods (equipment, buildings)
Emissions not included in Scope 1 or 2 (extraction, T&D losses)
Transportation of purchased goods from suppliers
Disposal and treatment of waste generated in operations
Transportation of employees for business activities
Transportation of employees between home and work
Operation of assets leased by the company
Emissions from sold products and investments
Transportation of sold products to customers
Processing of intermediate products by third parties
End-use emissions of products sold
Disposal of products sold at end of life
Operation of assets owned and leased to others
Operations of franchises
Emissions from investments (for financial institutions)
Scope 3 emissions are all indirect emissions (not included in Scope 2) that occur in a company's value chain, both upstream (suppliers) and downstream (customers). They typically represent 70-90% of a company's total carbon footprint.
Scope 3 emissions represent the largest share of most companies' carbon footprints. Addressing them is essential for achieving net zero targets, meeting stakeholder expectations, and complying with regulations like CSRD that mandate Scope 3 reporting.
Scope 3 reporting is becoming mandatory under CSRD (EU), SEC Climate Rules (US), and increasingly expected under BRSR (India). Most net zero frameworks like SBTi require Scope 3 targets if they exceed 40% of total emissions.
There are multiple methods: spend-based (using financial spend × emission factors), activity-based (using actual quantities), supplier-specific (using primary data from suppliers), and hybrid approaches. The GHG Protocol Scope 3 Standard provides detailed guidance.