Scope 3 covers indirect emissions across an organization's upstream and downstream value chain. The 15 categories help teams map activities, identify relevant sources and plan data improvements. Applicable boundaries and exclusions must be assessed and explained under the current GHG Protocol requirements.
Why Scope 3 matters
For many organizations, value-chain emissions are a major part of the inventory, but their share varies by sector, products and operating model. Common challenges include supplier data gaps, global supply chains, category boundaries, potential overlaps and coordination across departments. Start by mapping activities; do not assume that one category is the largest for every company.
Four frameworks, different roles
| Framework | Main role |
|---|---|
| GHG Protocol | Accounting and inventory framework; divides Scope 3 into 15 categories. |
| SBTi | Science-based target setting and validation under applicable criteria. |
| CDP | Environmental disclosure and performance assessment. |
| IFRS S2 | Climate-related financial disclosures for decision-useful information. |
These frameworks can work together, but each has separate boundaries and requirements. Under applicable SBTi near-term criteria, Scope 3 emissions at or above 40% of total Scope 1, 2 and 3 emissions trigger a Scope 3 target; the target boundary must cover at least 67% of Scope 3 emissions. Confirm the criteria version and exclusions that apply to an application.
The 15 categories
Upstream: Categories 1–8
| No. | Category | Typical activities |
|---|---|---|
| 1 | Purchased goods and services | Raw materials, components, packaging and outsourced production. |
| 2 | Capital goods | Emissions from manufacturing facilities, equipment and IT hardware acquired during the reporting year. |
| 3 | Fuel- and energy-related activities | Upstream fuel and energy emissions and applicable transmission and distribution losses not included in Scope 1 or 2. |
| 4 | Upstream transportation and distribution | Third-party transport of purchased goods and transport services purchased by the reporting company. |
| 5 | Waste generated in operations | Third-party treatment of operational waste and wastewater. |
| 6 | Business travel | Employee travel in vehicles not owned or controlled by the company; lodging may also be included. |
| 7 | Employee commuting | Travel between employees' homes and work locations. |
| 8 | Upstream leased assets | Operation of leased assets not already included in the company's Scope 1 or 2. |
Downstream: Categories 9–15
| No. | Category | Typical activities |
|---|---|---|
| 9 | Downstream transportation and distribution | Post-sale transport and storage in assets not owned or controlled by the company and not purchased by it. |
| 10 | Processing of sold products | Downstream processing of intermediate products sold by the company. |
| 11 | Use of sold products | Expected lifetime use of products sold during the reporting year, including relevant direct and indirect use-phase emissions. |
| 12 | End-of-life treatment of sold products | Disposal and treatment of sold products and packaging at end of life. |
| 13 | Downstream leased assets | Operation of assets owned by the company and leased to others, where emissions are not in Scope 1 or 2. |
| 14 | Franchises | Franchise operations not included in the franchisor's Scope 1 or 2. |
| 15 | Investments | Applicable investment-related emissions outside the company's Scope 1 and 2 boundary. |
Category boundaries depend on activity, control and who purchases transport services. Incoterms such as CIF, DDP and FOB may help interpret a transaction but do not by themselves determine category attribution. Record the rationale and consult the relevant category guidance.
Assessing relevance and setting boundaries
Use a consistent organizational consolidation approach (equity share, financial control or operational control), then map upstream and downstream activities against each category's minimum boundary. Assess emissions size, influence, risks and opportunities, stakeholder attention, outsourcing, sector guidance and other relevant factors. Data availability helps plan estimates and improvements; it does not automatically justify excluding an activity. Document included, not-applicable and excluded items and the reasons.
Data and calculation methods
Primary activity data may include supplier fuel, weight, distance or mileage. Secondary data can include representative industry averages and emission factors. Tier 1–3 labels are sometimes used for internal data management, but are not official GHG Protocol data tiers and do not guarantee a fixed quality ranking. Assess temporal, geographic and technological representativeness, completeness and reliability.
Common approaches include supplier-specific, hybrid, average-data and spend-based methods. A spend estimate can help screen hotspots, while activity data may better reflect physical processes when suitable factors are available. EEIO models are often used as a source for spend-based factors. Validate currency, price year, sector mapping, geography and model coverage.
Practical workflow
- Map purchasing, logistics, product, employee and investment activities to the 15 categories.
- Identify applicable boundaries and record exclusions with reasons.
- Make preliminary estimates using suitable data and factors.
- Prioritize material hotspots and improve supplier or activity data over time.
- Reconcile results with organizational boundaries, reporting rules and applicable target criteria.
Use the GHG Protocol's current category calculation guidance and FAQs. Check the version and status of third-party calculators before use; a calculator estimate does not establish that the full inventory is complete. For Taiwan operations, coordinate procurement, finance, logistics, product, HR and sustainability teams, and separately confirm applicable local disclosure rules.
This article is a practical overview, not a substitute for the applicable standard or organization-specific inventory assessment.