Calculating Scope 3: The biggest lever in your CO₂ balance
Yacin Bessas
5Min. reading time
Corporate Sustainability
Scope 3 emissions are the largest but also the most complex part of the CO₂ balance for many companies. They occur along the entire value chain—both before and after the company's own boundary—and can account for up to 90 percent of total emissions, depending on the industry. At the same time, they are particularly challenging to calculate methodically.
This article explains what Scope 3 emissions are, how they are defined in the Greenhouse Gas (GHG) Protocol, what the challenges of data collection are, and why it is worthwhile to engage with them. We also show how our free Scope 3 relevance profile can facilitate the entry into this subject.
In a nutshell: Scope 3
Scope 3 emissions occur before and after the company boundary and encompass the entire value chain.
Depending on the industry, they account for up to 90% of a company's total CO₂ emissions.
Their capture is complex but crucial for an effective climate strategy and regulatory compliance.
What are Scope 3 emissions?
Scope 3 emissions are all indirect greenhouse gas emissions that occur not from owned facilities or energy purchases. They concern all activities along the value chain: from raw material procurement to logistics and business travel, to the use and disposal of sold products.
Brief explanation of Scope 1, 2 and 3
To better understand, it is useful to get an overview of the three scopes of greenhouse gas accounting:
Scope 1: Direct emissions from sources that a company controls. This includes, for example, emissions from heating, machinery, or the vehicle fleet.
Scope 2: Indirect emissions from purchased energy, such as electricity or district heating.
Scope 3: All other indirect emissions that occur along the value chain—e.g., from suppliers, transport, product use, or business travel.
Scope 3 emissions often represent the largest part of the CO₂ balance but are also the hardest to capture.
ℹ️ A detailed classification of Scope 1 and 2 can be found in this article.
Source: GHG Protocol
The 15 Scope 3 categories
The GHG Protocol—the most widely used standard for CO₂ balances—divides Scope 3 emissions into 15 clearly defined categories. They cover both upstream and downstream activities.
Which of these categories are relevant for a company largely depends on the respective industry and individual business activities. A manufacturing company will need to focus on different aspects than a software company or a logistics service provider.
Scope 3 is by far the most complex area—yet it also holds the greatest potential for reduction. Many industries generate most emissions in this area. This makes a structured approach particularly important.
Upstream emissions:
Purchased goods and services: Raw materials, packaging, or services required for business operations.
Capital goods: Investment goods such as machinery, equipment, or buildings.
Fuel- and energy-related activities: Upstream emissions from purchased energy, e.g., from transportation or extraction of fuels.
Transportation and distribution (upstream): Logistics emissions when delivering materials or products.
Waste from upstream processes: Disposal of waste generated during production or services.
Business travel: CO₂ footprint from flights, train journeys, rental cars, etc.
Employee commuting: Emissions from the commuting of employees.
Rented assets (upstream): Emissions from facilities or vehicles that a company uses but does not own.
Downstream emissions:
Transportation and distribution (downstream): Logistics emissions after sale—e.g., during the delivery of products to customers.
Processing of sold products: Emissions that occur when customers process products.
Usage of sold products: Emissions during usage, e.g., the energy consumption of a device.
End-of-life treatment: Disposal or recycling of products after use.
Rented assets (downstream): Emissions from objects that the company leases.
Franchises: Emissions from franchise partners, if applicable.
Investments: Emissions from financial partnerships or capital investments.
Why is capturing Scope 3 so challenging?
Unlike Scope 1 and Scope 2 emissions, Scope 3 data lies outside a company's direct influence. This makes data collection significantly more complex. In many cases, companies rely on information from suppliers, service providers, or customers. However, this data is often missing, incomplete, or non-standardized.
Furthermore, the number of potential emission sources is high. Depending on the size and structure of the company, numerous supply chains, transportation routes, and product usages must be taken into account. Specific usage data is often lacking, so industry-specific average values must be used. This is permissible, but the uncertainty associated with it should be made transparent—especially regarding regulatory requirements such as the CSRD or voluntary standards like the Science Based Targets.
Why it is worth the effort to calculate Scope 3
Scope 3 emissions constitute the largest part of the overall CO₂ balance in many companies. This means that there is often the greatest potential to significantly reduce one's own Corporate Carbon Footprint (CCF). While Scope 1 and 2 are usually relatively clear in terms of measurement, Scope 3 emissions provide the lever to achieve real and noticeable effects through targeted measures along the value chain.
Despite all challenges, dealing with Scope 3 emissions is not a “nice to have” but an essential part of any sound climate strategy. Moreover, external pressure is increasing. Regulatory requirements such as the Corporate Sustainability Reporting Directive (CSRD) or the Supply Chain Due Diligence Act (LkSG) demand greater transparency along the entire value chain. Investors, banks, and business partners today also expect reliable Scope 3 data—be it in ESG ratings or during tender processes.
Those who engage with Scope 3 in a structured manner gain a clear competitive advantage. Not only through potential cost savings on materials and processes but also through credibility with customers, employees, and stakeholders.
The GHG Protocol as the standard for Scope 3
The GHG Protocol serves globally as the basis for greenhouse gas accounting. It provides the “Corporate Value Chain (Scope 3) Accounting and Reporting Standard” as a structured basis for systematically capturing and reporting Scope 3 emissions.
The standard does not require complete coverage of all 15 categories but rather a comprehensible approach. Companies should determine which categories are material to them, which data is available, and where estimates can be used. Transparency is crucial: it must be clear what basis the accounting is carried out on.
How to calculate Scope 3 emissions efficiently?
1. Identify relevant Scope 3 categories
Especially at the beginning, it is crucial to know which Scope 3 categories are truly important. Not every category is equally relevant for every company.
Therefore, Global Changer offers free creation of a Scope 3 relevance profile (in German only). It helps you determine, in just a few steps, which emission sources are particularly relevant for your industry—based on the GHG Protocol and supplemented by industry-specific benchmarks.
For the creation of the relevance profiles, sustainability reports from companies across various industries were analyzed. From this, it was derived which Scope 3 categories typically carry particular weight.
You receive an industry-based initial assessment that helps you prioritize correctly. The results are ideal for preparing for regulatory requirements such as CSRD, SBTi, or the LkSG. No login is needed— you will receive the results directly via email.
2. Collect and consolidate Scope 3 data
Once the relevant categories have been determined, the actual data collection begins. Here it applies: the more precise the data, the more reliable the accounting.
Obtain primary data: Contact suppliers, service providers, and partners to obtain specific consumption or emission data.
Use secondary data: If no primary data is available, you can fall back on industry-specific emissions factors and databases.
Standardize data: Different formats and quality of provided data are common. A uniform structure and documentation facilitate later calculations.
Mark gaps: Missing or estimated values should be clearly marked as such to ensure transparency—important for CSRD or SBTi requirements.
3. Calculate Scope 3 emissions for relevant categories using AI
The calculation is based on the collected data and the appropriate emissions factors. AI-supported tools like those from Global Changer can provide significant efficiency and accuracy advantages.
Automated data linking: AI can merge large amounts of data from different sources and update in real time.
Select the appropriate emissions factors: The AI automatically aligns data with the latest factors from recognized databases.
Error detection and plausibility checks: Anomalous values or missing data are automatically flagged, reducing manual checking work.
Scenarios and potential analyses: In addition to the pure calculation, reduction scenarios can be simulated to strategically plan measures.
FAQ: Calculating Scope 3 emissions
What is the difference between Scope 1, Scope 2, and Scope 3?
Scope 1 includes direct emissions from owned sources like heating systems or vehicles. Scope 2 includes indirect emissions from purchased energy, e.g., electricity. Scope 3 includes all other upstream and downstream indirect emissions along the value chain.
Do I have to account for all 15 Scope 3 categories?
No. The GHG Protocol recommends initially focusing on the essential categories. What those are depends on your industry and business model. A Scope 3 relevance profile can help here in prioritization.
What data sources can I use for Scope 3?
In addition to primary data from suppliers or service providers, secondary data, average values, or emissions factors can also be used. Crucial is that the chosen methodology is transparently documented.
How does the Scope 3 relevance profile specifically help me?
The Scope 3 relevance profile shows which categories are particularly relevant for your industry and provides you with a starting point for your Scope 3 strategy. It is based on the GHG Protocol and is supplemented by industry-specific benchmarks.
Scope 3 emissions are the largest but also the most complex part of the CO₂ balance for many companies. They occur along the entire value chain—both before and after the company's own boundary—and can account for up to 90 percent of total emissions, depending on the industry. At the same time, they are particularly challenging to calculate methodically.
This article explains what Scope 3 emissions are, how they are defined in the Greenhouse Gas (GHG) Protocol, what the challenges of data collection are, and why it is worthwhile to engage with them. We also show how our free Scope 3 relevance profile can facilitate the entry into this subject.
In a nutshell: Scope 3
Scope 3 emissions occur before and after the company boundary and encompass the entire value chain.
Depending on the industry, they account for up to 90% of a company's total CO₂ emissions.
Their capture is complex but crucial for an effective climate strategy and regulatory compliance.
What are Scope 3 emissions?
Scope 3 emissions are all indirect greenhouse gas emissions that occur not from owned facilities or energy purchases. They concern all activities along the value chain: from raw material procurement to logistics and business travel, to the use and disposal of sold products.
Brief explanation of Scope 1, 2 and 3
To better understand, it is useful to get an overview of the three scopes of greenhouse gas accounting:
Scope 1: Direct emissions from sources that a company controls. This includes, for example, emissions from heating, machinery, or the vehicle fleet.
Scope 2: Indirect emissions from purchased energy, such as electricity or district heating.
Scope 3: All other indirect emissions that occur along the value chain—e.g., from suppliers, transport, product use, or business travel.
Scope 3 emissions often represent the largest part of the CO₂ balance but are also the hardest to capture.
ℹ️ A detailed classification of Scope 1 and 2 can be found in this article.
Source: GHG Protocol
The 15 Scope 3 categories
The GHG Protocol—the most widely used standard for CO₂ balances—divides Scope 3 emissions into 15 clearly defined categories. They cover both upstream and downstream activities.
Which of these categories are relevant for a company largely depends on the respective industry and individual business activities. A manufacturing company will need to focus on different aspects than a software company or a logistics service provider.
Scope 3 is by far the most complex area—yet it also holds the greatest potential for reduction. Many industries generate most emissions in this area. This makes a structured approach particularly important.
Upstream emissions:
Purchased goods and services: Raw materials, packaging, or services required for business operations.
Capital goods: Investment goods such as machinery, equipment, or buildings.
Fuel- and energy-related activities: Upstream emissions from purchased energy, e.g., from transportation or extraction of fuels.
Transportation and distribution (upstream): Logistics emissions when delivering materials or products.
Waste from upstream processes: Disposal of waste generated during production or services.
Business travel: CO₂ footprint from flights, train journeys, rental cars, etc.
Employee commuting: Emissions from the commuting of employees.
Rented assets (upstream): Emissions from facilities or vehicles that a company uses but does not own.
Downstream emissions:
Transportation and distribution (downstream): Logistics emissions after sale—e.g., during the delivery of products to customers.
Processing of sold products: Emissions that occur when customers process products.
Usage of sold products: Emissions during usage, e.g., the energy consumption of a device.
End-of-life treatment: Disposal or recycling of products after use.
Rented assets (downstream): Emissions from objects that the company leases.
Franchises: Emissions from franchise partners, if applicable.
Investments: Emissions from financial partnerships or capital investments.
Why is capturing Scope 3 so challenging?
Unlike Scope 1 and Scope 2 emissions, Scope 3 data lies outside a company's direct influence. This makes data collection significantly more complex. In many cases, companies rely on information from suppliers, service providers, or customers. However, this data is often missing, incomplete, or non-standardized.
Furthermore, the number of potential emission sources is high. Depending on the size and structure of the company, numerous supply chains, transportation routes, and product usages must be taken into account. Specific usage data is often lacking, so industry-specific average values must be used. This is permissible, but the uncertainty associated with it should be made transparent—especially regarding regulatory requirements such as the CSRD or voluntary standards like the Science Based Targets.
Why it is worth the effort to calculate Scope 3
Scope 3 emissions constitute the largest part of the overall CO₂ balance in many companies. This means that there is often the greatest potential to significantly reduce one's own Corporate Carbon Footprint (CCF). While Scope 1 and 2 are usually relatively clear in terms of measurement, Scope 3 emissions provide the lever to achieve real and noticeable effects through targeted measures along the value chain.
Despite all challenges, dealing with Scope 3 emissions is not a “nice to have” but an essential part of any sound climate strategy. Moreover, external pressure is increasing. Regulatory requirements such as the Corporate Sustainability Reporting Directive (CSRD) or the Supply Chain Due Diligence Act (LkSG) demand greater transparency along the entire value chain. Investors, banks, and business partners today also expect reliable Scope 3 data—be it in ESG ratings or during tender processes.
Those who engage with Scope 3 in a structured manner gain a clear competitive advantage. Not only through potential cost savings on materials and processes but also through credibility with customers, employees, and stakeholders.
The GHG Protocol as the standard for Scope 3
The GHG Protocol serves globally as the basis for greenhouse gas accounting. It provides the “Corporate Value Chain (Scope 3) Accounting and Reporting Standard” as a structured basis for systematically capturing and reporting Scope 3 emissions.
The standard does not require complete coverage of all 15 categories but rather a comprehensible approach. Companies should determine which categories are material to them, which data is available, and where estimates can be used. Transparency is crucial: it must be clear what basis the accounting is carried out on.
How to calculate Scope 3 emissions efficiently?
1. Identify relevant Scope 3 categories
Especially at the beginning, it is crucial to know which Scope 3 categories are truly important. Not every category is equally relevant for every company.
Therefore, Global Changer offers free creation of a Scope 3 relevance profile (in German only). It helps you determine, in just a few steps, which emission sources are particularly relevant for your industry—based on the GHG Protocol and supplemented by industry-specific benchmarks.
For the creation of the relevance profiles, sustainability reports from companies across various industries were analyzed. From this, it was derived which Scope 3 categories typically carry particular weight.
You receive an industry-based initial assessment that helps you prioritize correctly. The results are ideal for preparing for regulatory requirements such as CSRD, SBTi, or the LkSG. No login is needed— you will receive the results directly via email.
2. Collect and consolidate Scope 3 data
Once the relevant categories have been determined, the actual data collection begins. Here it applies: the more precise the data, the more reliable the accounting.
Obtain primary data: Contact suppliers, service providers, and partners to obtain specific consumption or emission data.
Use secondary data: If no primary data is available, you can fall back on industry-specific emissions factors and databases.
Standardize data: Different formats and quality of provided data are common. A uniform structure and documentation facilitate later calculations.
Mark gaps: Missing or estimated values should be clearly marked as such to ensure transparency—important for CSRD or SBTi requirements.
3. Calculate Scope 3 emissions for relevant categories using AI
The calculation is based on the collected data and the appropriate emissions factors. AI-supported tools like those from Global Changer can provide significant efficiency and accuracy advantages.
Automated data linking: AI can merge large amounts of data from different sources and update in real time.
Select the appropriate emissions factors: The AI automatically aligns data with the latest factors from recognized databases.
Error detection and plausibility checks: Anomalous values or missing data are automatically flagged, reducing manual checking work.
Scenarios and potential analyses: In addition to the pure calculation, reduction scenarios can be simulated to strategically plan measures.
FAQ: Calculating Scope 3 emissions
What is the difference between Scope 1, Scope 2, and Scope 3?
Scope 1 includes direct emissions from owned sources like heating systems or vehicles. Scope 2 includes indirect emissions from purchased energy, e.g., electricity. Scope 3 includes all other upstream and downstream indirect emissions along the value chain.
Do I have to account for all 15 Scope 3 categories?
No. The GHG Protocol recommends initially focusing on the essential categories. What those are depends on your industry and business model. A Scope 3 relevance profile can help here in prioritization.
What data sources can I use for Scope 3?
In addition to primary data from suppliers or service providers, secondary data, average values, or emissions factors can also be used. Crucial is that the chosen methodology is transparently documented.
How does the Scope 3 relevance profile specifically help me?
The Scope 3 relevance profile shows which categories are particularly relevant for your industry and provides you with a starting point for your Scope 3 strategy. It is based on the GHG Protocol and is supplemented by industry-specific benchmarks.
