Calculating Scope 3 Emissions

In this section you will see each of the 15 categories listed as Scope 3 under the GHG Protocol, toggle between Upstream Activities tab or Downstream Activities tab to see the respective categories.

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Upstream activities

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

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Downstream activities

Downstream Transportation and Distribution

Processing of Sold Products

Use of Sold Products

End-of-life treatment of Sold Products

Downstream Leased Assets

Franchises

Investments

You can learn about each of these categories in the Introduction to Carbon Accounting Course in Sumday Academy

Calculating Scope 3 Emissions

Go to Assessments in the left hand menu.

Go to Accounting

Go to Scope 3

Create worksheets within the respective emission categories.

Add consumption data into the table where possible. If you don’t have this data, that’s alright, you can tag the transactions as ‘Spend based’.

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When you assigned transactions in the carbon ledger, Sumday identifies which of those categories often have better activity data than spend which results in a higher quality calculation - for example if you coded $10,000 to bricks, in purchased goods and services you would see a worksheet for bricks where you can convert the spend transactions to a better unit of measurement, like tonnes.

The visual for each of the subcategories outlines the method applied for each of the transactions. The three categories displayed are:

Spend based - these are transactions where the financial value of the transaction has been used to determine the emissions. Where an activity based factor does not exist in Sumday’s database for an emissions source selected in the carbon ledger a spend based EF will be applied automatically.

Activity based - Where an activity based emissions factor is available for the emissions source selected you can replaced the spend based calculation with an activity based factor. To do this you will need to select “Calculations” and then create a worksheet to enter the activity based amounts for each transaction. these could be litres, tonnes, etc. Using activity based emissions factors will generally result in higher data quality.

Unassigned - where both spend and activity based emissions factor options exist for a given emissions factor source then you will need to determine which approach you will be adopting. if you will be using spend than you can click the “tag unassigned as spend based” to automatically assign those transactions. If you are using spend based then you will need to create a workbook and enter the activity based values for each of the transactions. It is important to note that you will not be able to finalise the GHG inventory in Sumday until all transactions are assigned.

When you click on the Assign transactions in this view you will be taken to the detailed worksheets associated with each of the emissions sources to do an activity based calculation, this is where you will enter activity data such as quantities purchased.

If you don’t have activity data, you can “tag unassigned as spend based” to confirm the spend based approach is being applied to these transactions.

If the approach changes during the assessment you can always unassign transactions and recategorise or tag as spend based.

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Watch this short clip to step through how the full Scope 3 calculation process works - covering from the carbon bookkeeping to creating worksheets in Assessments.

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Some categories are calculated based on data outside of financial transactions. You will need to create non-transaction worksheet for these. Check out the next article for more details

What data do I need to calculate?

Here’s a table with the information you need for each category.

Some of this can be found in accounting or ERP systems, and some might be data your organisation has never collected before and that’s alright! Just make a start! Often finance teams have a good understanding of where, which function, and who might be best to go to collect this data.

You can learn more in the Introduction to Carbon Accounting Course in Sumday Academy

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If this data isn’t available you can use spend data from your financial transactions to calculate your Scope 3 emissions. This emissions calculation method is called ‘Spend-based method’. This method isn’t the most representative method to calculate emissions as the amount spent $ is subject to price fluctuations and discounts and doesn’t reflect the driver for emissions For example: You paid a $100 to buy 100kg of coffee beans one month, and the next you pay $80 to buy the same amount, they’re both for 100kg of coffee beans, however, because you spent $20 less you’re calculating less emissions now. Most businesses are likely to have data gaps for calculating Scope 3 - and that’s alright! The key will be to disclose in your reporting you have used this method to calculate Scope 3 emissions and acknowledge the uncertainties associated with it. If you have plans to improve on the data quality i.e. Collect quantities or engage with suppliers, even better! Disclose your plans to improve the quality of your reporting so stakeholders understand what the numbers mean.

Category	Data	Data Sourcse
Purchased Goods and Services	Start with: Importing transactions for the reporting period from your accounting system. Easily export the details into excel and upload them - ask your accountant for help if you need it or reach out. Enhance this data: Using quantity of goods purchased or hours of service received	Purchase orders, receipts, invoices, contracts Financial transactions for the reporting period which can be easily exported from your accounting system.
Capital Goods	Quantity of goods purchased.	Purchase orders, receipts, invoices, contracts. Fixed asset register.
Fuel and energy-related activities	Amount of fuel used Energy purchased (e.g., kWh of electricity, therms of natural gas)	Invoices / Utility bills Metre reading records Contracts such as PPA (Power Purchase Agreements) Fuel purchase receipts
Transportation and Distribution	Distance and mode of transport Mass or volume of products shipped Site specific fuel and electricity usage and emissions	Invoices Fuel receipts Delivery notes / Transit records
Waste generated in operations	Total waste produced and type e.g. tonne/cubic metre Proportion of this waste being treated by different methods (e.g., percent landfilled, incinerated, recycled)	Utility bills Tracking systems
Business travel	Destination and distance travelled by modes of transport Nights of accommodation Amount of fuel used	Travel agency records Travel providers e.g. airline Reimbursement receipts e.g. Fuel purchased Surveys with staff
Employee commute and WFH	Headcount Days travelled to work and mode of transport Amount of fuel used Number of WFH days Electricity and fuel used, apportioned, from WFH	HR records Surveys with employees
Leased Assets	Type and number of leased assets or proportion of leased area of building Scope 1 and 2 emissions associated with lease	Lease records Utility bills
Processing of sold products	Fuel and energy used related to the site Scope 1 and 2 emissions (e.g. Process and fugitive emissions if applicable) related to the site	Invoices / Utility bills See Scope 1 and 2 for other potential sources
Use of sold products	Total lifetime expected uses of product(s) Quantities of products sold Fuel used/Electricity consumed/Refrigerant leakage per use of product	Sales records / Invoices Product specifications or manuals
End-of-life treatment of sold products	Total mass of sold products and packaging (from point of sale till consumer i.e. includes any packaging that was used to transport) Proportion of this waste being treated by different methods (e.g., percent landfilled, incinerated, recycled)	Sales records / Invoices Product specifications or manuals Tracking systems
Franchises	Emissions franchisee entities Fuel and energy use by facility	Utility bills Rent statements and lease records
Investments	Proportion of share in investment Emissions from portfolio companies	Investment records

Common questions on the Emissions Overview

Why is the “tag unassigned as spend based” greyed out?

This happens for two reasons:

There are no unassigned transactions. if you need to allocate a transaction to spend you will need to first unassign the transaction from the worksheet and then it will be available to tag as spend.

There is no spend based emissions factor for this particular emissions source. In this instance you will need to input the activity based information required or unreconciled the transaction and choose another emission source where you do have the required input.

Why do I need to code the transaction in the carbon ledger and then reassign the transaction in the individual worksheet?

Sumday has a focus on auditability and as a result a key element of being auditable is ensuring that the emission calculations are complete and there is a clear trail from start to finish. This means that the process start with the financial transaction record which then flows through to the rest of the carbon accounting process. Where the initial spend based calculation method is being replaced with an alternative unit of measure, this process happens as part of a separate worksheet-based step to ensure the audit trail is maintained while making changes to the calculation.

It can feel like a bit of extra work to carbon account but a seperate systematic workflow can often add efficiencies, and the final result is auditable and you are less likely to miss transactions as part of the process.