Scope 3 emissions — the 15 categories explained

What scope 3 emissions are

The Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard defines scope 3 emissions as all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, both upstream and downstream. These are GHG emissions from sources not owned or controlled by you.

In plain English: scope 3 emissions are the greenhouse gas emissions that happen because of your business but outside the assets you own and outside your purchased energy. Your supplier's emissions. Your customer's emissions when using your product. Your employees' commute. For most organisations, scope 3 is the biggest part of the carbon footprint — often 5–10× larger than scope 1 and scope 2 combined.

Scope 1, scope 2 and scope 3 emissions explained

The GHG Protocol splits a company's greenhouse gas emissions into three scopes. It helps to see them side by side before you focus on scope 3.

Scope 3 emissions are everything in the third row — the indirect emissions across your value chain, upstream and downstream, that you influence but do not directly control. See scope 1 and scope 2 for the direct and purchased-energy parts.

The 15 categories of scope 3 emissions

The GHG Protocol splits scope 3 into 8 upstream and 7 downstream emissions categories. Upstream covers your suppliers; downstream emissions cover what happens to your products after they leave you.

Upstream (8 categories)

Downstream (7 categories)

Which scope 3 categories are mandatory for SECR?

In practice, quoted companies report grey-fleet mileage, rental cars, business rail, business flights and business taxi as a scope 3 figure inside the directors' report. Unquoted companies can stop at scope 1 and scope 2 for SECR compliance.

Remember the SECR thresholds have not moved with the April 2025 Companies Act uplift. You are in scope if you meet two of three: turnover of £36m or more, a balance sheet of £18m or more, or 250 or more employees. A company that is now classed as "medium" under the higher £54m/£27m size limits can still be caught by SECR — so check before you assume you are exempt. Use the free SECR eligibility checker to confirm.

Why voluntary scope 3 still matters

Even when not required by SECR, organisations increasingly report scope 3 because investors expect it (major asset managers screen for it in portfolio companies); large customers require it in tenders; CDP scores it and CSRD-exposed groups need it anyway; SBTi requires a scope 3 inventory and targets where it exceeds 40% of total; banks build it into sustainability-linked loan covenants; and disclosing it voluntarily is one of the strongest signals of ESG maturity. Any credible net zero strategy has to account for scope 3 emissions, because they are where the bulk of your carbon footprint sits.

How to measure scope 3 emissions — three methods

Scope 3 is harder to measure than scope 1 and scope 2 because you depend on third-party data. The GHG Protocol allows three methods, ranked by accuracy:

1. Supplier-specific method (highest quality) — use your supplier's own primary data and allocate by your share of their output. Best for category 1 where a few suppliers dominate.
2. Hybrid / activity-based method — use industry-average factors per unit of activity (e.g. kgCO₂e per tonne of steel). Best with good activity data but no supplier data.
3. Spend-based method (lowest quality) — multiply £ spend by emission factors per £ of spend in the relevant industry. Quick from accounting data, but coarse.

In practice, most first-time scope 3 inventories are spend-based across all categories, then refined supplier-by-supplier in later years as your data collection improves. The carbon calculator gives you a fast first estimate.

Which scope 3 categories matter most?

For most UK organisations, materiality concentrates in 3–5 categories:

The GHG Protocol allows you to exclude immaterial categories, but you must document the materiality test and disclose the exclusions.

Supply chain mapping — practical approach

Building a useful scope 3 emissions inventory takes 3–6 months for a first pass: map the value chain; run a materiality screen using spend-based factors (categories under ~1% can be excluded with disclosure); identify top suppliers (usually 20% of suppliers represent 80% of spend); engage those suppliers for their scope 1 and scope 2 data with your allocation share; then refine annually, replacing more spend-based estimates with supplier-specific primary data or activity-based data.

How to reduce scope 3 emissions

Because the sources sit outside your direct control, scope 3 reduction is mostly about influence. A practical scope 3 strategy works through a few levers:

• Engage your suppliers. Ask your highest-emitting suppliers for their own greenhouse gas emissions data and reduction targets, and favour lower-carbon suppliers in procurement.
• Redesign products. For manufacturers, category 11 (use of sold products) often dominates, so a more efficient product cuts emissions across its whole life.
• Cut business travel and commuting. Switch to rail over air and support low-carbon commuting.
• Set a target. An SBTi-aligned scope 3 target turns intent into accountable emissions reduction and keeps you on track for net zero.

These carbon reduction measures only work once you have a baseline — you cannot reduce what you have not measured.

Common scope 3 pitfalls

1. Double counting. Category 3 (well-to-tank) overlaps with scope 1 if you're not careful — keep them separate.
2. Ignoring downstream emissions. Most first-pass inventories forget category 11 (use of sold products), which often dominates for manufacturers.
3. Spend-based forever. By year 3 you should have moved the top 80% of emissions to supplier-specific or activity-based data.
4. No materiality documentation. Excluding a category without documenting the screen invites auditor and investor challenge.
5. Mixing control approaches. Categories 8 and 13 (leased assets) depend on the consolidation approach — be consistent.

Scope 1 vs scope 2 vs scope 3 — proportions

Yet under SECR, scope 1 and scope 2 get the spotlight and scope 3 (for unquoted companies) gets a passing mention or is omitted. Expect this to change as CSRD-aligned reporting becomes the norm.

Where to begin if you are a supplier being asked for data

If a large customer has asked you for your scope 1 and scope 2 emissions so they can build their own scope 3 inventory, start small: pull your energy bills and fuel records for the year, convert them with the published DEFRA 2025 conversion factors, and report a single tonnes-CO2e figure with the method noted. You do not need a full value chain analysis to answer a customer's request — you need a defensible scope 1 and scope 2 number and a note on what is and isn't included. Build from there in later years.

Get a specialist to map your scope 3 emissions

Scope 3 is the hardest part of any carbon inventory — the materiality screen, supplier engagement and methodology choices materially affect the result. A vetted, IEMA-qualified specialist can build a complete scope 3 emissions inventory across all material categories and fold it into your wider SECR reporting. Check your eligibility and we'll connect you with the right specialist — free and with no obligation.