How to measure scope 3 emissions

Learn how to measure Scope 3 emissions across your supply chain. Discover practical ways to engage suppliers, collect carbon data and improve emissions reporting for net zero goals.

The three scopes of your carbon footprint 

In this guide we're looking specifically at scope 3 emissions, but as a reminder - an organisation’s total carbon footprint can be split into three scopes: 

• Scope 1: The greenhouse gas emissions from sources you own and control and are therefore directly responsible for.
• Scope 2: The emissions you indirectly produce through the energy or electricity you purchase.
• Scope 3: All other emissions you are indirectly responsible for from sources outside your direct control. 

For more information on measuring Scope 1 and 2, take a look at our guide to carbon footprinting. 

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Understanding supply chain and other scope 3 emissions

Things get more complex when it comes to Scope 3, as the diagram below shows, as it accounts for your full value chain.

A manufacturing firm, for example, would include the entire lifecycle of the product – from the extraction, production, and transportation of raw materials to the finished product’s transportation to the customer, its use, and its disposal.

For other sectors, this will require analysis up and down your supply chain – upstream – the products and services that you buy, and downstream – the products and services that you sell and their onward lifecycle. It also includes other indirect emissions you’re responsible for, such as business travel and commuting.

Put simply, your Scope 3 emissions consist of the Scope 1 and 2 emissions of all the other organisations and individuals in your wider value chain.

Which Scope 3 emissions should your business measure?

In total, there are 15 (8 upstream and 7 downstream) Scope 3 emissions sources laid out under the Greenhouse Gas Protocol, the internationally recognised standard for carbon footprinting. These include: 

• The goods and services you purchase
• The extraction, production and transportation of the fuels and energy you purchase (e.g., the extraction/transportation of diesel for your vehicles or gas for your heating and the transmission/distribution of electricity through the grid to your site)
• Upstream and downstream transportation and distribution (e.g., between your direct suppliers and your own operations in vehicles you do not own, any logistics you purchase and other transportation/distribution of your products to the end customer)
• The disposal and treatment of your waste and wastewater after it leaves your site
  Business travel in vehicles you do not own (e.g., public transport, air travel or use of employees’ own vehicles for business purposes)
• The commuting of employees in their own vehicles or on public transport
• The operation of any assets you lease (e.g., vehicles you rent) and of any assets you lease out to others
• The downstream processing, use and end-of-life treatment/disposal of your products, including the energy they consume or greenhouse gases they may emit over their lifetime
• The operation of any franchises or of any investments you finance (this is only applicable to investors and financial services)

Some these categories will be more relevant to your business than others, but even so, it’s still quite a lot to take in. The good news is you don’t need to take on all of Scope 3 at once - that’s a difficult piece of work for even the largest of organisations.

The easiest Scope 3 emissions to measure first

Some examples of core Scope 3 sources that can be measured (or at least approximated) relatively easily in-house are as follows: 

• Business travel: You can calculate emissions from business travel by recording the mode of transport used and the approximate distance for each journey made in the reporting year. You can then take the total distance travelled and apply the specific emissions factor for each mode of transport to calculate the corresponding greenhouse gas emissions
• Employee commuting: You can follow the same approach for commuting. Gather data from your employees on the distance they travel to work and what mode of transport they use, multiply this by the days worked in the reporting year and apply the relevant emissions factor as above. Transport for Greater Manchester has a useful toolkit to help you do this
• Disposal and treatment of waste: You can estimate the greenhouse gas emissions associated with your waste by recording the annual tonnage of waste produced, along with the specific treatment method used by your waste management provider for each waste type (e.g., landfilled, recycled or incinerated). This may be identifiable on your waste transfer notes or waste bill, or you can request the information from your provider. You can then multiply the tonnage of each waste type by the emissions factor for the relevant treatment method
• Water and wastewater treatment: Emissions from water supplied and wastewater treatment can similarly be calculated using the cubic metreage data from your water bill and the relevant emissions factors
• Well-to-tank (WTT) emissions for fuel and electricity: There are specific emissions factors for capturing the emissions associated with the extraction, production and transportation of the fuels and electricity you use. You will need the consumption data from your electricity bill and fuel consumption (or miles travelled) of vehicles used
• Key raw materials and packaging: Several emissions factors are available for estimating upstream emissions from the extraction/processing, manufacture and transportation of key raw materials and packaging. This includes construction materials, metals, plastics, paper and cardboard, among others. The tonnage consumed can be multiplied by the relevant emissions factors to produce an estimate of their contribution to your carbon footprint
• Transmission and distribution (T&D) losses from electricity use: There is also a specific emissions factor for the energy consumed (i.e., ‘lost’) by the grid during the process of distributing electricity to your site. To calculate this, you just need your electricity consumption data (which you need to calculate your Scope 2 emissions anyway)

While far from exhaustive, calculating the above is a great start to understanding your Scope 3 emissions. Business travel is often the key category that is mandatory for many standards and formal commitments. The UK’s SME Climate Commitment, which allows SMEs to become signatories to the globally recognised UN Race to Zero initiative, requires that you measure your Scope 1 and 2 emissions plus the business travel element of Scope 3 as a minimum.