Why Scope 3 Emissions Matter for Your Business

Businesses pursuing net zero sustainability goals must prioritise measuring and managing greenhouse gas (GHG) emissions across their entire value chain. With government regulations tightening and stakeholders demanding carbon transparency, companies that fail to act on Scope 3 emissions risk financial penalties, lost investment opportunities, and operational disruptions. 

Scope 3 emissions are often the most significant portion of a company's total GHG emissions, making them the most critical and challenging to address. Companies that proactively track and reduce these emissions will benefit from cost savings and , supply chain resilience.

Breaking Down Scope 1, 2 & 3 Emissions

• Scope 1: Direct emissions from fuel combustion in company vehicles, boilers, and industrial equipment.
• Scope 2: Indirect emissions from the electricity, heating, and cooling solutions a company purchases.
• Scope 3: All indirect emissions occurring within a company's supply chain, both upstream (before production) and downstream (after production), outside of direct ownership or control.

Unlike Scope 1 and 2 emissions, Scope 3 emissions involve external suppliers, partners, and customers, making them harder to track and manage. However, with regulations like the UK Net Zero Strategy, SECR reporting, and Science-Based Targets initiative (SBTi) requiring greater emissions transparency, businesses must act now.

A carbon hotspot is an area of your business where a large proportion of your total greenhouse gas emissions are produced. By measuring your emissions related to the following areas, you can identify where your hotspots are:

• Purchased goods and services – Carbon footprint of sourcing materials.
• Transportation & distribution – Emissions from logistics and supply networks.
• Business travel – Flights, accommodation, and corporate transportation.
• Employee commuting – The daily carbon impact of workforce travel choices.
• Product end-of-life disposal – How waste is managed after consumer use.

Why Businesses Must Prioritise Scope 3 Emissions

1. The Largest Share of a Business's Carbon Footprint

• Scope 3 emissions often make up the largest share of companies' total emissions, meaning failing to track them leads to sustainable uncertainties.
• Companies ignoring Scope 3 will struggle to meet net zero targets and comply with regulations.

2. Growing Regulatory & Market Pressure

• UK Streamlined Energy and Carbon Reporting (SECR) mandates disclosure of energy and carbon performance, with increasing requirements for Scope 3.
• SBTi and UK Net Zero Strategy require businesses to set clear Scope 3 reduction targets.
• Investors and financial institutions favour businesses with strong Scope 3 reduction plans.

3. Strengthening Supply Chains & Reducing Business Risks

• Collaborating with suppliers to track and reduce emissions enhances relationships and can be mutually beneficial.
• Sustainable procurement strategies can lower costs and improve operational resilience.

4. Brand Trust & Competitive Advantage

• Proactively addressing Scope 3 emissions boosts brand reputation and attracts environmentally conscious customers.

Challenges in Measuring Scope 3 Emissions

Scope 3 emissions require external data collection from suppliers, distributors, and customers. The biggest obstacles include:

• Inconsistent supplier data and lack of standard reporting.
• Difficulty tracking emissions across multiple industries.
• Limited digital infrastructure for accurate monitoring.

With the help of Tomson, your next steps could be as follows:

Short-Term (0-12 months):

• Conduct a Scope 3 emissions audit to identify major sources.
• Improve data collection processes and engage with key suppliers.
• Ensure compliance with SECR, UK Net Zero Strategy, and SBTi requirements.

Medium-Term (1-3 years):

• Establish supply chain sustainability standards and embed these into contracts.
• Implement sustainability training for employees to drive internal change.
• Set clear SBTi-aligned Scope 3 reduction goals.

Long-Term (3+ years):

• Adopt circular economy practices, such as material reuse and waste minimisation.
• Strengthen sustainability governance across the supply chain.

Get Expert Support from Tomson Consulting

Tomson Consulting provides expert Scope 3 emissions tracking, supplier engagement strategies, and carbon compliance solutions.

Get in touch today to develop a custom Scope 3 emissions strategy tailored to your business goals and industry requirements.