What is Scope 3?
Scope 3 emissions are indirect greenhouse gas emissions that occur in a company's value chain, and are not directly owned or controlled by the company. Scope 3 emissions typically account for more than 70% of a company’s carbon footprint. Without measuring Scope 3, emissions disclosures and reduction strategies only see part of the picture.
Why should a company conduct a Scope 3 GHG Emissions Inventory?
Some of the primary reasons for conducting a Scope 3 emissions inventory include:
Investor & regulatory pressure
Disclosure requirements (EU CSRD andCalifornia Climate Laws) increasingly mandate Scope 3 reporting.
Reputation & trust
Stakeholders expect accountability beyond direct operations.
Strategic opportunities
Identifies cost-saving, efficiency, and innovation potential across the supply chain.
Risk management
Highlights vulnerabilities in procurement, logistics, and customer use.
Net-zero alignment
Scope 3 is often the largest barrier to achieving science-based targets.
How we conduct a Scope 3 Inventory
Identify relevant categories to your business (the GHG Protocol identifies 15 categories of Scope 3 emissions).
Collect supplier data, spend-based estimates, fuel usage, logistics records, product life cycle information, and other relevant data.
Use recognized emissions factors and databases to calculate emissions from activities.
Conduct quality assurance checks and summarize findings of emissions inventory.
Present audit-ready findings with clear assumptions and methodologies.
Developing a Scope 3 GHG Inventory
Get the full picture of where your company stands across its entire value chain.
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An emissions inventory spreadsheet, including all activity data, calculations, emissions factors, and results for the reporting period
A document detailing the company’s GHG inventory process, including the inventory scope and boundaries, data collection methodology, and quality assurance and control procedures
A high-level emissions inventory report that identifies key findings, including emissions by scope, emission intensity metrics, largest emission sources, and key reduction opportunities
If you’re not measuring Scope 3 emissions, you’re missing the majority of your climate footprint—and the opportunities to reduce it.
Annie Roberts
Senior Vice President - Climate ConsultingUnderstanding a Scope 3 GHG Emissions Inventory
Scope 3 refers to the missions generated by activities from assets not owned or controlled by the reporting organization, but that the organization indirectly influences in its value chain. The 15 categories of Scope 3 emissions are:
- Purchased goods and services
- Capital goods
- Fuel and energy related activities
- Upstream transportation & distribution
- Waste generated in operations
- Business travel
- Employee commuting
- Upstream leased assets
- Downstream transportation & distribution
- Processing of sold products
- End-of-life treatment of sold products
- Downstream leased assets
- Franchises
- Investments
Because it spans suppliers, distributors, customers, and end-of-life disposal, much of the data on Scope 3 emissions lies outside of a company’s direct control. Calculating it correctly requires collaboration by various stakeholders, estimation, and continuous refinement.
No. The GHG Protocol requires companies to identify which categories are relevant and material to their business. For example, a SaaS company may have significant emissions from purchased goods (servers, hardware) and employee commuting, but not from manufacturing.
Inventories often begin with spend-based or industry-average data, improving accuracy over time as supplier engagement grows. Transparency in assumptions and boundaries is essential.
- GHG Protocol (best practice standard)
- CDP (Carbon Disclosure Project)
- SBTi (Science-Based Targets initiative)
- CSRD and California SB 253
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