Scope 3 emissions: Definition
“Scope 3 emissions” (also known as value chain emissions) include all indirect emissions occurring within a company’s value chain that are not covered by Scope 2 emissions. These emissions arise as a consequence of the company’s activities but originate from sources outside the company’s ownership or control. Scope 3 emissions encompass:1. Emissions generated in the company’s supply chain, including the extraction, production, and transportation of purchased materials and fuels.2. Emissions produced from the use of products and services sold by the company.3. Emissions arising from waste disposal, encompassing the disposal of waste generated in operations, the production of purchased materials and fuels. 4. The disposal of sold products at the end of their lifecycle.
For Sustainability Managers
Understanding Scope 3 emissions is essential for accurately tracking and reducing your organisation's carbon footprint.
For CFOs
Scope 3 emissions has growing financial implications as climate regulation tightens and investors demand transparency.
For Sustainability Reporting
Accurate measurement of Scope 3 emissions is required for credible climate reports across all major frameworks.
Related Terms
Scope 1 emissions
Scope 1 emissions encompass direct greenhouse gas (GHG) emissions generated by a company during its core business operations. This includes electricity generation, materials production, waste management, and the use of the company's own vehicle fleet for transportation.
Scope 2 emissions
Scope 2 emissions are indirect emissions resulting from the production of purchased energy.
Carbon dioxide (CO2) emissions
Emissions refer to the discharge of greenhouse gases or their precursors into the atmosphere within a defined region and timeframe. Carbon dioxide emissions, also known as CO2 emissions, arise from the combustion of fossil fuels and cement production. They encompass carbon dioxide released during the use of solid, liquid, and gas fuels, as well as gas flaring.
Direct emissions
Direct emissions encompass those generated by a company's operational activities, such as electricity generation, material processing, waste management, and fleet transportation (scope 1 emissions).
Downstream emissions
Downstream emissions are emissions that arise after a company has sold its products and services. For example, if your company manufactures machinery, the emissions stemming from the machinery's use by customers are considered downstream emissions. Together with upstream emissions or supply chain emissions, they constitute a company's scope 3 emissions.