Scope 3 Emissions Measurement, for Supply Chain Transparency
What is Scope 3 and why does it matter?
Our scope 3 emissions measurement for supply chain service helps you identify and quantify indirect emissions across suppliers, logistics, and product lifecycles. We provide actionable insights to reduce value-chain emissions which strengthens sustainability reporting.
Scope 3 Carbon emissions often constitute the largest share of a company’s greenhouse gas (GHG) footprint because they capture all the indirect emissions across a businesses supply (value) chain. By focusing on supply chain emissions, companies can see the impacts they may not control directly, but can influence. Addressing these is critical to achieving credible decarbonisation and meeting emerging regulatory and stakeholder expectations.
Scope 3 Emisions Definition
Scope 3 emissions are all indirect emissions (other than from purchased electricity/energy, which is Scope 2) that occur in the value chain of the reporting company, both upstream (suppliers, transportation, materials) and downstream (product use, end-of-life, distribution).
In other words, if your company’s activity leads to emissions happening somewhere else (outside your direct control), those can fall under Scope 3.
Why is Scope 3 Challenging and Significant?
- Data collection is complicated: you need information about suppliers, logistics and customers, in multiple tiers.
- Many companies don’t have visibility into emissions beyond their direct operations.
- It requires collaboration, assumptions and often estimation methods.
- In many sectors, Scope 3 emissions exceed the combined total of Scope 1 + Scope 2 emissions (from business operations), making it a major target for decarbonisation.
The Green House Gas (GHG) Protocol’s Standard is the primary methodology by which organisations worldwide account and report Scope 3 emissions. The Standard defines 15 categories of Scope 3 emissions (upstream and downstream) to help structure accounting and prioritisation. Upstream roughly equates to things that a business buys, whereas Downstream relates to what a business sells.
How do we deliver Scope 3 emissions reporting for our clients?
We act as your partner at every stage: from strategy and system design, to data collection, calculation, supplier engagement, reporting, and continuous improvement.
Here is our proposed step-by-step approach for delivering a comprehensive Scope 3 supply chain emissions assessment and ongoing management:
Step 1: Scoping & Materiality Assessment
- Engage stakeholders internally (procurement, operations, sustainability) to identify which Scope 3 categories are likely to be material for your business and sector.
- Use spend-based or spend mapping to estimate relative magnitude by category.
- Prioritise based on size, influence, risk, and feasibility of action.
Step 2: Data Strategy & Supplier Engagement Design
- Develop a data collection plan: primary data from suppliers vs. secondary data (industry averages, databases)
- Segment suppliers by material emissions, readiness, and influence.
- Prepare templates, guidance, and training materials for suppliers.
- Set timelines.
Step 3: Data Collection & Quality Assurance
- Send questionnaires or data requests to suppliers (tier-1 or beyond).
- Where supplier data is unavailable, use proxy, spend-based, or hybrid estimation methods (e.g. spend × emission factor).
- Apply quality checks: completeness, consistency, transparency.
- Document assumptions and data sources for auditability.
Step 4: Calculation, Aggregation & Reporting
- Use the GHG Protocol’s calculation guidance for each relevant category.
- Aggregate emissions to get total Scope 3 emission by category and full value chain.
- Break out emissions by geography, supplier tier, or product line.
- Prepare for reporting as part of your ESG and sustainability disclosures, aligning with IFRS S2 or other frameworks as relevant.
Then continue to refine and drive benefits from Scope 3 action.
Step 5: Reduction Strategy & Supplier Collaboration
- Prioritise reduction opportunities by cost, feasibility, supplier influence, and impact.
- Work with suppliers on improvement programs: energy efficiency, process shifts, renewable procurement, material substitution.
- Encourage and support supplier capacity building (training, incentives, co-investment).
- Monitor progress and incorporate into procurement decisions.
Step 6: Iteration & Improvement
- Review data gaps, assumptions, and methods each year.
- Expand scope deeper into supplier tiers gradually.
- Continuously refine supplier engagement, data flows, and emission reduction plans.
Step 7: Communication & Transparency
- Publish Scope 3 results (including methodology used).
- Provide narrative on challenges, assumptions, and future improvement plans.
- Align disclosures with regulatory requirements (e.g. ESRS, IFRS S2) and voluntary standards (e.g. VSME / VCMI).
for more information or support on Scope 3 Reporting or environmental management systems, we’d be delighted to hear from you.
Frequently Asked Questions
- Purchased goods and services
- Capital goods
- Fuel and energy related activities
- Upstream transportation and distribution
- Waste generated in operations
- Business travel
- Employee commuting
- Upstream leased assets
- Downstream transportation and distribution
- Processing of sold products
- Use of sold products
- End-of-life treatment of sold products
- Downstream leased assets
- Franchises
- Investments
Not necessarily. Only categories deemed material need full reporting. You should assess which categories are significant for your business and report those, with explanation.
You can use secondary data (industry averages, published databases) or proxy methods (e.g. spend-based) as interim estimates. Over time, you can push for better primary data from suppliers.
Document all assumptions, use conservative estimates, disclose data quality tiers, and aim to reduce uncertainty over time. The GHG Protocol encourages continuous improvement.
Yes, double-counting is a risk in value chain accounting (e.g. a supplier’s emissions may count in multiple customers’ Scope 3). Be transparent about methodology, avoid claiming reductions that belong to others, and focus on influence rather than sole attribution.
Offsets should not replace actual reductions. Many standards (including recent VCMI guidance) limit the portion of Scope 3 offsetting (e.g. only up to 25%) and require that you pursue mitigation first.
Annually is typical. But as you improve data collection and supplier engagement, interim updates (e.g. quarterly) may be useful for internal tracking.
Start with tier-1 (direct suppliers). Over time, extend to deeper tiers as feasible, especially for high-impact categories.
If your net-zero target covers the full value chain, you must reduce or neutralize Scope 3 emissions. This often means collaboration across your supply chain and in procurement, product design, and supplier contracts.