Scope 3 emissions — the 15 categories and how to track them

What Scope 3 emissions are

Scope 3 emissions are all the indirect greenhouse-gas emissions in a company’s value chain that are not covered by Scope 1 or Scope 2. Scope 1 is direct emissions from owned or controlled sources; Scope 2 is emissions from purchased electricity, heat and steam; Scope 3 is everything else — both upstream and downstream of the company’s own operations3.

The GHG Protocol Corporate Value Chain (Scope 3) Standard organises these emissions into 15 categories1.

The GHG Protocol is the accounting framework nearly every UK and international regime builds on, so its Scope 1/2/3 definitions are the common language of carbon reporting.

Why Scope 3 dominates the footprint

For most companies Scope 3 is the overwhelming majority of total emissions — commonly 70% to 90%, and higher for banks and asset managers where category 15, investments, dominates6.

A manufacturer’s purchased goods, or a retailer’s sold-product use, typically dwarf the emissions from its own buildings and fleet.

Because Scope 3 sits outside direct operational control, it is both the hardest part to measure and the part where reduction has the most impact.

That is why disclosure frameworks increasingly require it: UK SRS S2 mandates Scope 3 disclosure for in-scope companies, and it is central to CSRD’s ESRS E14.

The 15 Scope 3 categories

The GHG Protocol splits Scope 3 into eight upstream categories (emissions from what the company buys and uses) and seven downstream categories (emissions from what the company sells)1.

Upstream categories (1–8)

1. Purchased goods and services — emissions from producing everything the company buys; usually the largest single category.
2. Capital goods — emissions from producing long-lived assets such as machinery and buildings.
3. Fuel- and energy-related activities — upstream emissions of fuels and electricity not already in Scope 1 or 2.
4. Upstream transportation and distribution — moving purchased products into and between the company’s operations.
5. Waste generated in operations — treatment and disposal of operational waste.
6. Business travel — employee travel by air, rail and road for business.
7. Employee commuting — travel between home and work, including remote-working energy.
8. Upstream leased assets — operation of assets leased by the company and not counted in Scope 1 or 2.

Downstream categories (9–15)

1. Downstream transportation and distribution — moving sold products to customers.
2. Processing of sold products — further processing of intermediate products by other companies.
3. Use of sold products — emissions when customers use the products; dominant for fuels, vehicles and appliances.
4. End-of-life treatment of sold products — disposal and recycling of products after use.
5. Downstream leased assets — operation of assets the company owns and leases to others.
6. Franchises — emissions from franchise operations.
7. Investments — financed emissions; the dominant category for financial institutions.

How to measure Scope 3

Scope 3 measurement follows two broad methods, and mature programmes use both2.

The usual path is to start spend-based to get complete coverage across all 15 categories, then move the largest categories to activity-based data through supplier engagement and primary data, applying UK Government (DESNZ) conversion factors where UK-specific figures are needed5.

How to track and report Scope 3 in practice

Tracking Scope 3 at scale is a data-management problem: hundreds of suppliers, multiple data formats, and factors that change annually.

Most companies use carbon accounting software to automate collection, apply GHG Protocol and DESNZ factors, and maintain an auditable trail from source data to reported figure25.

A practical sequence:

1. Screen all 15 categories with a spend-based estimate to find where emissions concentrate2.
2. Prioritise the two or three material categories for activity-based measurement.
3. Engage suppliers for primary data on those categories.
4. Apply current DESNZ factors and document the methodology for assurance5.
5. Report against the relevant regime — see Scope 3 under UK SRS for the disclosure detail.

Scope 3 in UK reporting

Where Scope 3 must be reported depends on the regime. SECR

does not require full Scope 3 — it centres on Scope 1 and 2 energy and carbon, with only a limited Scope 3 element for some entities. UK SRS S2

, built on IFRS S2, requires Scope 3 disclosure, though FCA CP26/5 proposes comply-or-explain in the first mandatory year for listed companies4.

Groups caught by EU CSRD via Article 40a report Scope 3 within ESRS E1.

For the full UK picture, see ESG reporting requirements in the UK.

Frequently asked questions