A manufacturing firm, for example, would include the entire lifecycle of the product – from the extraction, production, and transportation of raw materials to the finished product’s transportation to the customer, its use, and its disposal.

For other sectors, this will require analysis up and down your supply chain – upstream – the products and services that you buy, and downstream – the products and services that you sell and their onward lifecycle. It also includes other indirect emissions you’re responsible for, such as business travel and commuting.

Put simply, your Scope 3 emissions consist of the Scope 1 and 2 emissions of all the other organisations and individuals in your wider value chain.

2. Why bother with Scope 3?

Understandably, many of these sources are incredibly difficult to identify, let alone measure, especially for smaller businesses. So why attempt to measure your Scope 3 at all? 

For starters, those emissions stack up. It’s likely that your total Scope 3 footprint is actually larger than your Scope 1 and 2 footprints combined. In fact, the carbon footprint of the average supply chain is understood to be more than 11 times higher than a buyer’s direct operations. Manufacturers generate a lot of indirect emissions from the raw materials they use and the lifecycle of their products, while office-based businesses tend to have high emissions from business travel and commuting relative to their own operations. 

With that in mind, Scope 3 has become a big focus point for large businesses that are under the most pressure to reduce their impact on the climate. For many companies, Scope 1 and 2 alone are no longer enough to satisfy stakeholders. Under the UN definition, a net zero target must cover Scope 3 emissions “where material to total emissions and where data availability allows”. 

In addition, the more you know about your Scope 3 emissions, the better your understanding of your upstream and downstream activities. For example, it may help you identify and manage an unseen risk in your supply chain or reveal that your waste generation is actually a much bigger priority than you may have thought.

4. How to get started

The first step is to collect the data. Some examples of core Scope 3 sources that can be measured (or at least approximated) relatively easily in-house are as follows: 

• Business travel: You can calculate emissions from business travel by recording the mode of transport used and the approximate distance for each journey made in the reporting year. You can then take the total distance travelled and apply the specific emissions factor for each mode of transport to calculate the corresponding greenhouse gas emissions
• Employee commuting: You can follow the same approach for commuting. Gather data from your employees on the distance they travel to work and what mode of transport they use, multiply this by the days worked in the reporting year and apply the relevant emissions factor as above. Transport for Greater Manchester has a useful toolkit to help you do this
• Disposal and treatment of waste: You can estimate the greenhouse gas emissions associated with your waste by recording the annual tonnage of waste produced, along with the specific treatment method used by your waste management provider for each waste type (e.g., landfilled, recycled or incinerated). This may be identifiable on your waste transfer notes or waste bill, or you can request the information from your provider. You can then multiply the tonnage of each waste type by the emissions factor for the relevant treatment method
• Water and wastewater treatment: Emissions from water supplied and wastewater treatment can similarly be calculated using the cubic metreage data from your water bill and the relevant emissions factors
• Well-to-tank (WTT) emissions for fuel and electricity: There are specific emissions factors for capturing the emissions associated with the extraction, production and transportation of the fuels and electricity you use. You will need the consumption data from your electricity bill and fuel consumption (or miles travelled) of vehicles used
• Key raw materials and packaging: Several emissions factors are available for estimating upstream emissions from the extraction/processing, manufacture and transportation of key raw materials and packaging. This includes construction materials, metals, plastics, paper and cardboard, among others. The tonnage consumed can be multiplied by the relevant emissions factors to produce an estimate of their contribution to your carbon footprint
• Transmission and distribution (T&D) losses from electricity use: There is also a specific emissions factor for the energy consumed (i.e., ‘lost’) by the grid during the process of distributing electricity to your site. To calculate this, you just need your electricity consumption data (which you need to calculate your Scope 2 emissions anyway)