Explain Scope 3 Emissions under the GHG Protocol
Scope 3 emissions are the indirect greenhouse gas emissions that occur across a company’s value chain. While not directly owned or controlled by the company, these emissions are associated with its operations and typically make up 80-90% of a business’s total carbon footprint, underscoring their importance in carbon accounting.
What Are Scope 3 Emissions?
Scope 3 emissions include all indirect emissions outside of Scope 1 (direct) and Scope 2 (energy-related) emissions, covering 15 categories:
- Purchased Goods and Services
- Capital Goods
- Fuel and Energy-Related Activities
- Upstream Transportation and Distribution
- Waste Generated in Operations
- Business Travel
- Employee Commuting
- Upstream Leased Assets
- Downstream Transportation and Distribution
- Processing of Sold Products
- Use of Sold Products
- End-of-Life Treatment of Sold Products
- Downstream Leased Assets
- Franchises
- Investments
The Challenge of Measuring Scope 3 Emissions
Tracking Scope 3 emissions can be complex since many suppliers may lack specific emissions data. When precise data isn’t available, businesses can use industry averages, though ongoing supplier engagement is critical for moving toward primary data. Sumday simplifies this process by providing tools to engage with suppliers and access to a comprehensive emissions factor database.
Why Scope 3 Matters
As net-zero targets become central to business strategy, understanding and reducing Scope 3 emissions is essential. While traditionally voluntary, Scope 3 reporting is increasingly required under standards like those from the International Sustainability Standards Board (ISSB) and recent regulations, making it a necessary focus for long-term compliance.
Building Transparency
Accurate Scope 3 accounting offers transparency into the environmental impact across your value chain, helping identify reduction opportunities and making informed procurement decisions. Sumday supports businesses in developing robust Scope 3 tracking, enabling real progress toward net-zero goals.