Scope 3 Emissions

For most companies Scope 3 is the largest part of the footprint, often well over half, and the hardest to measure. The Greenhouse Gas Protocol divides it into 15 categories. Upstream ones include purchased goods and services, capital goods, business travel and employee commuting. Downstream ones include use of sold products, end-of-life treatment and investments, which is the category banks use for financed emissions. One firm's Scope 3 is another firm's Scope 1 and 2, so double counting is expected across the economy. Data comes from supplier reports, spend-based estimates and industry averages, so quality varies. Companies usually report the material categories first. Supply chain rules and investor questions increasingly reach this scope, and it is where the largest cuts often sit.

A car maker finds that most of its emissions occur when customers drive its cars, and a large share arises in making steel and batteries at suppliers. Its own factories are a small slice. It starts asking key suppliers for emissions data, and sets its Scope 3 target on vehicle fuel efficiency and supplier decarbonisation.