How Are Scope 3 Other Indirect Emissions Calculated?

Scope 3 emissions cover all other emissions that an organisation does not directly own or control but that are indirectly related to its activities. These emissions may be linked to the organisation's supply chain, logistics, business travel, waste management and many other areas. Scope 3 emissions are generally the most complex and wide-ranging, because they arise from processes outside the organisation's direct control.

Steps for calculating Scope 3 emissions

1. Identifying emission sources

• The first step is to identify the indirect emission sources across all of the organisation's activities and its value chain. The GHG Protocol Scope 3 Standard divides these emissions into 15 categories, upstream and downstream in the value chain:

  Upstream emissions:

  1. Purchased goods and services

  2. Capital goods

  3. Fuel- and energy-related activities not included in Scope 1 or Scope 2

  4. Upstream transportation and distribution

  5. Waste generated in operations

  6. Business travel

  7. Employee commuting

  8. Upstream leased assets

  Downstream emissions:

  9. Downstream transportation and distribution

  10. Processing of sold products

  11. Use of sold products

  12. End-of-life treatment of sold products (recycling, disposal, etc.)

  13. Downstream leased assets

  14. Franchises

  15. Investments

When identifying these emissions, companies determine where they can have the greatest impact and monitor those sources.

2. Data collection

• Scope 3 emissions generally cannot be measured directly, so indirect data is collected. This data may include:

  • Data from vendors or service providers in the supply chain

  • Business travel, logistics and transport data

  • Emissions arising during the use of products or in waste management

  • Information on employee commuting

This data is usually obtained from sources such as supplier surveys, logistics reports, invoices and employee surveys.

3. Using emission factors

• Scope 3 calculations use appropriate emission factors for each activity. Emission factors determine the quantity of greenhouse gases emitted per unit of a given activity (for example, transport, production or waste disposal).

  • For example, if a vehicle travels 100 kilometres, the calculation uses a specific emission factor per unit of distance (kg CO₂/km).

  • Another example: different emission factors may be used depending on the type of energy used to produce a purchased product.

4. Calculation method

Depending on data quality, Scope 3 emissions may be calculated using the supplier-specific method, the hybrid method, the average-data method or the spend-based method. In activity-based methods, data is collected for specific activities and multiplied by emission factors specific to each activity:

Emissions = Activity quantity × Emission factor

5. Calculating total emissions

• Once the emission calculations from different sources have been added together, total Scope 3 emissions are obtained. This is the sum of the emissions in each category. By analysing where it generates the most emissions, an organisation can develop strategies to reduce them.

Example calculation

A company wants to calculate the Scope 3 emissions from its products' supply chain and logistics activities. Its data is as follows:

• Product supply chain: 1,000,000 units of product were purchased, with an emission factor of 0.5 kg CO₂ per unit.

• Transport activities: 100,000 kilometres of transport were carried out, with a vehicle emission factor of 0.2 kg CO₂/km.

Calculation:

• Product supply chain emissions: 1,000,000 units × 0.5 kg CO₂/unit = 500,000 kg CO₂

• Transport emissions: 100,000 km × 0.2 kg CO₂/km = 20,000 kg CO₂

• Total Scope 3 emissions: 500,000 kg CO₂ + 20,000 kg CO₂ = 520,000 kg CO₂

In this example, the company's Scope 3 emissions will be 520,000 kg CO₂ (520 tonnes of CO₂).

Managing and reducing Scope 3 emissions

Calculating Scope 3 emissions can be challenging and time-consuming, because many sources are not under direct control. However, these emissions can make up a large part of an organisation's carbon footprint. For this reason:

• Supply chain management: Encouraging suppliers to adopt more sustainable production methods.

• Energy efficiency: Improving energy efficiency throughout the supply chain.

• Waste reduction: Reducing waste over the product life cycle.

• Logistics improvements: Making transport and distribution processes more efficient.

These measures are important strategies for managing and reducing Scope 3 emissions.