Scope 3 Emissions: Tracking Indirect Supply Chain Impact
Scope 3 emissions are indirect emissions from your supply chain—supplier operations, customer use of your products, waste disposal, and business travel. For many organisations, scope 3 dwarfs scope 1 and 2 (direct operations). A manufacturer with modest facility emissions might have scope 3 emissions 5-10x larger due to suppliers and product use.
Net zero commitments increasingly require scope 3 reduction, yet tracking is complex because you don’t directly control supplier operations. Effective scope 3 reduction requires transparency, measurement, and incentive alignment with suppliers.
Scope 3 Complexity and Common Measurement Failures
Scope 3 encompasses 15 categories: purchased goods/services, capital goods, fuel/energy-related emissions, upstream transport, waste, business travel, employee commuting, upstream leasing, downstream transport, processing of sold products, use of sold products, end-of-life treatment, downstream leasing, franchises, investments. Most organisations track only a few categories, typically missing their largest sources.
Measurement is difficult. You don’t directly monitor supplier operations. Suppliers may not report emissions data. You may not know product use patterns (how long customers use products, in what conditions). Estimation is necessary, and estimation accuracy is often poor, leading to significant uncertainty in scope 3 reporting.
Many organisations report scope 3 as “estimated based on industry averages” without actual measurement. This is compliant reporting but provides no actionable intelligence for reduction.
Why Generic Scope 3 Reduction Targets Fail
“Reduce scope 3 emissions 50% by 2030″ is difficult to achieve without understanding which scope 3 sources drive highest impact. Generic measures—”work with suppliers to reduce emissions,” “shift to sustainable transportation,” “encourage product recycling”—are vague and often ineffective.
Effective reduction requires identifying your top 3-5 scope 3 sources, measuring them with precision, and deploying targeted measures. A manufacturer whose primary scope 3 source is supplier energy consumption would benefit from supplier energy audits and equipment upgrades. A company whose primary scope 3 source is product use (e.g., fuel for vehicles sold) would benefit from product efficiency improvements. Without source clarity, reduction efforts are scattered.
How Transparent Supplier Tracking Enables Scope 3 Reduction
EMSOL’s approach integrates supplier emissions data (requested or measured at supplier facilities) with your own operations data. Real-time monitoring at key supplier locations identifies high-emission operations. Activity correlation reveals which supplier processes drive highest emissions. This transparency enables supplier engagement: “Your facility generated X tonnes of emissions last month; this facility generated Y tonnes. Here’s the source analysis; here’s where reduction is possible; here’s the incentive for improvement.”
For scope 3 categories you can measure directly (transport of goods you control), telematics and route tracking provide precision. For categories requiring supplier cooperation (supplier facility emissions), transparency agreements enable shared measurement.
Scope 3 Emissions Tracking Checklist
Scope 3 Source Identification: Which scope 3 categories apply to your organisation? Which are highest-impact? (Often 80% of scope 3 comes from 2-3 categories.) Prioritise measurement of high-impact categories.
Supplier Engagement: Can suppliers provide emissions data? (Some suppliers now report scope 1/2; fewer provide operational granularity). What transparency agreements can you establish? Can you access supplier facilities for direct measurement?
Data Collection Framework: How will scope 3 emissions be measured? Supplier reporting, industry estimates, direct measurement, hybrid? What precision level is achievable for each category?
Transport and Logistics Tracking: Can you track emissions from goods transport? Telematics on vehicles you control? Emissions data from logistics providers for outsourced transport? Consolidation and route optimisation analysis?
Product Use Phase Analysis: If product use generates emissions (e.g., fuel consumption for vehicles), how are these calculated? Based on test data, field monitoring, customer reporting? What’s the uncertainty range?
Supplier Improvement Targets: Which suppliers contribute highest scope 3 emissions? What improvement targets have you established? What support (financing, technical assistance) can you provide?
FAQ: Scope 3 Emissions
Q: Do we have to measure all scope 3 categories?
A: No. GHG Protocol allows prioritisation. You should measure material sources (those significant to overall footprint). Categories contributing <1% of total can be excluded if clearly immaterial. Document which categories are included and which are excluded.
Q: What if suppliers won’t provide emissions data?
A: Use estimates based on industry data. But distinguish between measured and estimated—measured data is more credible for regulatory reporting. Supplier engagement and requests for data transparency are part of responsible scope 3 reporting.
Q: How does scope 3 reduction differ from scope 1/2 reduction?
A: Scope 1/2 reduction targets your own operations (equipment upgrades, behaviour change, efficiency investment). Scope 3 reduction requires supplier engagement (requesting improvements, incentivising low-emission alternatives, sometimes changing supplier relationships). Scope 3 reduction is slower and less direct because you depend on supplier cooperation.
Q: Can we offset scope 3 emissions instead of reducing them?
A: Offsetting (carbon credits, tree planting) can supplement reduction, but most net zero frameworks now require actual reduction rather than pure offsetting. Reduction first; offsetting for residual emissions is the preferred approach.
Next Steps
Scope 3 emissions reduction requires transparent measurement and supplier collaboration. Without measurement, targets are intentions without accountability.
If your organisation needs scope 3 emissions measurement and reduction strategy, contact EMSOL to discuss transparent scope 3 tracking and supplier engagement for net zero goals.