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Glossary
Scope 3

Scope 3

Scope 3 emissions are all the indirect greenhouse gas emissions that occur in a company's value chain but are not from sources it owns or controls. Addressing them is essential for a complete carbon footprint assessment, as they often represent the largest and most significant source of a company's climate impact.

Scope 3 Emissions

Scope 3 emissions, also known as value-chain emissions, represent the entire spectrum of indirect greenhouse gas (GHG) emissions from a company's activities, excluding emissions from purchased electricity (Scope 2). They provide a holistic view of a company's true carbon footprint, extending beyond its own operations. For any organization committed to net-zero or comprehensive decarbonization, measuring and managing Scope 3 is non-negotiable.

According to the Greenhouse Gas (GHG) Protocol—the global standard for carbon accounting—Scope 3 is divided into 15 categories, split between upstream and downstream activities. This structure helps companies track emissions throughout their entire value chain.

Upstream Emissions

       
  • Purchased goods and services: Emissions from the production of all the products and services a company buys.
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  • Capital goods: Emissions from producing long-lasting assets like machinery or buildings.
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  • Business travel: Emissions from transportation for business activities (e.g., flights, trains).
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  • Employee commuting: Emissions from employees traveling to and from work.
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Downstream Emissions

       
  • Use of sold products: Emissions generated when customers use the company's products (e.g., fuel burned by a vehicle).
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  • Transportation and distribution: Emissions from shipping and distributing products to end consumers.
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  • End-of-life treatment of sold products: Emissions from disposal or recycling of products after their useful life.
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Concrete Examples

       
  •      Automaker: Scope 3 includes upstream emissions from manufacturing steel and tires it purchases, and downstream emissions from customers driving the cars it sells.    
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  •      Software Company: Beyond a small Scope 1 & 2 footprint for offices and data centers, Scope 3 covers emissions from external data centers, employee travel, and electricity used by users running its software.    
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Understanding and reducing Scope 3 emissions is a key driver for corporate participation in compliance carbon markets. By putting a price on carbon, these systems create a powerful financial incentive to decarbonize the entire value chain.

Other terms

GHG Protocol

Life Cycle Assessment (LCA)