Scope 3 – Supply Chain emissions

Companies need to measure not only the emissions caused by their own operations, but also from the raw materials they source and use of the goods they sell.

Calculating the totality of a company’s impact on emissions requires evaluating three scopes:

Scope 1 refers to direct GHG emissions. This means that they directly come from sources that a company owns or controls, such as; company vehicle emissions.

Scope 2 refers to indirect emissions from purchased sources, such as organization’s consumed electricity or cooling.

Scope 3 refers to indirect emissions. Include all the other indirect emissions within your entire value chain, the upstream supply chain (suppliers), as well as downstream GHG emissions occurring with customers.

The distinction is based on the financial transactions of the reporting company.

• Upstream emissions are indirect GHG emissions related to purchased or acquired goods and services.
• Downstream emissions are indirect GHG emissions related to sold

goods and services.

Upstream scope 3 emissions:

1. Purchased goods and services
2. Capital goods
3. Fuel- and energy-related activities (not included in scope 1 or scope 2)
4. Upstream transportation and distribution
5. Waste generated in operations
6. Business travel
7. Employee commuting
8. Upstream leased assets

Downstream scope 3 emissions:

9. Downstream transportation and distribution
10. Processing of sold products
11. Use of sold products
12. End-of-life treatment of sold products
13. Downstream leased assets
14. Franchises
15. Investments

The categories are intended to provide companies with a systematic framework to organize, understand, and report on the diversity of scope 3 activities within a corporate value chain. The categories are designed to be mutually exclusive in order to avoid double counting of emissions between categories.