Scope 3 emissions often make up the largest share of a company’s carbon footprint, typically 70–90%. Addressing them helps businesses reduce their overall impact, align with global sustainability goals, and demonstrate leadership in environmental responsibility.
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When it comes to sustainability, understanding Scope 3 emissions is critical for businesses aiming to make a real environmental impact. While Scope 1 and Scope 2 emissions are relatively straightforward, Scope 3 emissions often represent the bulk of a company’s carbon footprint. This guide breaks down Scope 3 emissions in a simple, comprehensive way, helping your business measure, report, and reduce them effectively.
Scope 3 emissions are a key part of greenhouse gas (GHG) reporting. To fully understand them, it helps to see how they fit into the broader context of carbon accounting:
| Category | Description | Examples |
| Scope 1 Emissions | Direct emissions from owned or controlled sources. | Fuel use in company vehicles, boilers |
| Scope 2 Emissions | Indirect emissions from the generation of purchased energy. | Electricity, heating, cooling |
| Scope 3 Emissions | Indirect emissions that occur across the value chain of your business activities. | Supplier production, customer use |
Scope 3 emissions include a broad range of activities that a business does not directly control but is still responsible for. These can be grouped into two main categories:
Focusing on Scope 3 emissions is essential because they typically account for the largest portion of a company’s carbon footprint. Businesses that ignore these emissions miss an opportunity to address their true environmental impact. Here’s why Scope 3 emissions matter:
For most industries, Scope 3 emissions make up 70–90% of total emissions. For example:
Global frameworks like the Science Based Targets initiative (SBTi) require companies to include Scope 3 emissions in their reduction plans.
Governments and consumers are increasingly demanding transparency in sustainability practices. Scope 3 reporting is becoming a competitive differentiator.
Scope 3 emissions are divided into 15 categories, according to the Greenhouse Gas Protocol. These categories cover both upstream and downstream activities:
| Category | Description |
| Purchased Goods & Services | Emissions from the production of goods and services you buy. |
| Capital Goods | Emissions from producing items like machinery and buildings. |
| Fuel-Related Activities | Emissions from fuel production and transportation. |
| Waste Generated in Operations | Emissions from the disposal of your organisation’s waste. |
| Business Travel | Emissions from employee travel (e.g., flights, hotels). |
| Employee Commuting | Emissions from employees commuting to work. |
| Use of Sold Products | Emissions when customers use your products (e.g., petrol vehicles). |
| End-of-Life Treatment | Emissions from product disposal or recycling. |
By understanding these categories, businesses can prioritise the most significant emission sources.
Measuring Scope 3 emissions requires a systematic approach. Follow these steps:
Identify all activities in your supply chain and operations. Be thorough—this is the foundation for accurate reporting.
Emission factors are metrics that convert activity data into GHG emissions. For example:
| Activity | Unit | Emission Factor |
| Electricity Use | kWh | 0.233 kg CO₂e/kWh |
| Petrol Consumption | Litres | 2.31 kg CO₂e/litre |
Reliable databases, such as the National Greenhouse Accounts Factors, can provide emission factors relevant to Australian businesses.
Platforms like the GHG Protocol, or consulting with organisations like Energy Action, simplify the process and improve accuracy.
Scope 3 emissions are notoriously difficult to measure and reduce. Here are some common challenges and solutions:
| Challenge | Solution |
| Lack of Data | Partner with suppliers to share accurate emissions data. |
| Complex Supply Chains | Focus on high-impact areas first, such as major suppliers or high-emission activities. |
| Cost of Measurement Tools | Use scalable tools and frameworks to avoid excessive costs. |
| Low Awareness Among Employees | Educate teams about the importance of Scope 3 emissions in sustainability goals. |
Reducing Scope 3 emissions is about collaboration and innovation. Here’s how businesses can make progress:
Work with suppliers who prioritise sustainability, or provide support to help them improve.
Design products that are energy-efficient, durable, and recyclable. For example, tech companies are increasingly focusing on energy-efficient devices.
Adopt virtual meeting tools and encourage sustainable travel options.
Promote carpooling, use of public transport, or flexible work-from-home policies.
Offset emissions you can’t reduce by investing in renewable energy projects or tree planting initiatives.
Australian businesses don’t have to tackle Scope 3 emissions alone. Energy Action provides:
By partnering with Energy Action, businesses can simplify the process and focus on achieving meaningful results.
Scope 3 emissions are challenging but essential for meaningful sustainability. By understanding, measuring, and reducing these emissions, your business not only supports global environmental goals but also builds trust with customers and stakeholders.
Ready to take action? Partner with Energy Action to simplify your sustainability journey. Together, we can reduce emissions, save costs, and create a greener future for everyone.
