Understanding and Tackling Scope 3 Emissions: Why They Matter and How to Address Them

Tommy Power

When it comes to carbon reporting, Scope 3 emissions are often the largest and most complex category to tackle. For many businesses, Scope 3 can account for more than 80% of total emissions, making them essential to address in any credible net zero strategy.

Yet, these emissions are also the hardest to measure and control, because they occur outside a company's direct operations. In this blog, we explore what Scope 3 emissions are, why they matter, and how your organisation can start to understand and reduce them using globally recognised frameworks like the Greenhouse Gas (GHG) Protocol.

What Are Scope 3 Emissions?

Scope 3 emissions refer to indirect emissions that occur in a company's value chain, both upstream (from suppliers and operations that support the business) and downstream (from customers and end-use of products). These are different from:

Scope 1: Direct emissions from owned or controlled sources.
Scope 2: Indirect emissions from purchased electricity, steam, heating and cooling.

Scope 3 includes everything from the carbon footprint of raw materials to business travel, employee commuting, product distribution, and even how a product is used and disposed of after it's sold.

Because of the vast scope, the GHG Protocol has broken Scope 3 emissions into 15 clearly defined categories, which help businesses measure, report and manage their emissions more effectively.

The 15 Categories of Scope 3 Emissions

Upstream emissions (Categories 1–8):

Purchased goods and services - Emissions from the production of goods and services the company buys.
Capital goods - Emissions from the production of long-term assets like equipment or buildings.
Fuel- and energy-related activities (not included in Scope 1 or 2) - Emissions from the production and delivery of fuels and energy the company purchases.
Upstream transportation and distribution - Emissions from transporting purchased goods and services before they reach the company.
Waste generated in operations - Emissions from the treatment and disposal of waste created by the company.
Business travel - Emissions from employee travel for business purposes (e.g. flights, hotels, mileage).
Employee commuting - Emissions from employees travelling to and from work.
Upstream leased assets - Emissions from assets leased by the company (not already included in Scope 1 or 2).

Downstream emissions (Categories 9–15):

Downstream transportation and distribution - Emissions from delivering sold products to end users.
Processing of sold products - Emissions from third parties processing intermediate products sold by the company.
Use of sold products - Emissions generated during the use phase of a company's goods or services.
End-of-life treatment of sold products - Emissions from disposal, recycling, or treatment of products after their use.
Downstream leased assets - Emissions from assets owned by the company and leased to others.
Franchises - Emissions from operations of franchisees (not owned or directly controlled by the company).
Investments - Emissions linked to financial investments, such as equity, loans, or project finance.

Why Are Scope 3 Emissions So Hard to Measure?

Scope 3 emissions are inherently challenging to quantify because they involve external data—from suppliers, distributors, customers, and beyond. You may need to:

Contact suppliers to get emissions data on purchased goods.
Estimate employee commuting patterns.
Work with transport partners to quantify emissions from logistics.
Analyse the carbon impact of product use by customers.

In many cases, companies rely on industry averages, proxy data or emission factors where direct data is unavailable. Despite these hurdles, even high-level estimates can provide valuable insights and help direct reduction efforts.

How Can Companies Reduce Scope 3 Emissions?

Once you've mapped out your Scope 3 emissions, the next step is targeted reduction. Some key approaches include:

Supplier engagement: Work with suppliers to help them measure and reduce their own emissions.
Sustainable procurement: Choose materials or services with lower carbon footprints.
Rethink product design: Design products for energy efficiency, durability, or easier recycling.
Customer engagement: Educate customers on sustainable usage and disposal practices.
Optimise logistics: Reduce emissions through smarter transport and distribution strategies.

You don't need to solve everything at once. Start with your largest emission sources, focus on where you have the most influence, and build from there.

Get in touch - we can help!

At Tomson, we support organisations in developing practical, science-based strategies to reduce carbon emissions across the entire value chain. We can measure your full company footprint, including hard-to-tackle Scope 3 emissions, and provide clear, actionable recommendations tailored to your business.