Scope 3 Emissions
Value-chain emissions — usually the largest part of a company's footprint.
Scope 3 covers indirect greenhouse gas emissions across a company's upstream and downstream value chain — typically 70–90% of a corporate footprint and the hardest to measure.
Any indirect emissions occurring in the reporting company's value chain, including both upstream and downstream, other than those covered by Scope 2. Defined by the GHG Protocol Corporate Value Chain (Scope 3) Standard.
Key concepts
Eight upstream (purchased goods, capital goods, fuel-and-energy, transport, waste, business travel, commuting, leased assets) and seven downstream.
PCAF-inspired hierarchy from primary supplier data down to spend-based factors.
Financed emissions — the dominant Scope 3 category for banks and investors.
Screen all 15 categories, disclose the material ones with explicit justification.
Featured articles
Glossary terms
Frequently asked questions
Why is Scope 3 so hard to measure?+
Scope 3 depends on data from thousands of suppliers, customers and third parties, and often relies on secondary emission factors rather than primary activity data. A materiality-based approach starting with spend data is the pragmatic entry point.
Do we have to report all 15 Scope 3 categories?+
Under ESRS E1 and SBTi, companies must screen all 15 and report those that are material. Immaterial categories can be excluded with justification.
What is a financed emission?+
Financed emissions are Scope 3 category 15 emissions for banks and investors: a share of the greenhouse gas emissions of borrowers or investees, attributed by the ratio of financing to enterprise value. The PCAF Standard defines the methodology.
Related regulations
- ESRS E1ESRS E1
Mandatory Scope 3 disclosure for material categories.
- SBTiSBTi Corporate Net-Zero Standard
Requires Scope 3 targets where material (>40% of total).
Industry-specific guidance
Process heat, purchased electricity and upstream materials dominate manufacturers' footprints — and the sustainable-finance opportunity is proportionally large.
Transport and logistics operators sit at the intersection of Scope 1 fuel use and their customers' Scope 3 category 4 emissions — making them a priority for both green loans and SLLs.
For food & beverage, upstream agriculture and land use dominate the footprint — putting the sector at the sharp end of SBTi FLAG guidance and the EU Deforestation Regulation.
For retailers, purchased goods and the use-phase of sold products account for the vast majority of emissions — turning supplier engagement and product design into the primary levers.
For banks and investors, sustainability is a system-level challenge — measured, priced and disclosed across the entire balance sheet.
Related platform capabilities
Comparisons
See how the Redigo Carbon platform turns scope 3 emissions into an operating system.
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