Understanding Scope 3 Categories: A Detailed Breakdown

Unravel the 15 categories of Scope 3 emissions and their significance in the climate landscape. From purchased goods to employee commuting, get a comprehensive overview of each category's impact and relevance in the broader context of sustainability.

Understanding Scope 3 Categories: A Detailed Breakdown
Photo by Vlad Hilitanu / Unsplash

When discussing Scope 3 emissions, the term "category" often comes up. But what does it mean, and how does it help businesses navigate their sustainability journey?

1. The Concept of Scope 3 Categories: Scope 3 emissions are divided into categories to help companies identify and address specific areas of their value chain. These categories provide a structured approach to measuring and reducing indirect emissions.

2. The 15 Categories: There are 15 recognized categories of Scope 3 emissions, covering both upstream and downstream activities.

  1. Purchased Goods and Services
  2. Capital Goods
  3. Fuel- and Energy-Related Activities (not included in Scope 1 or Scope 2)
  4. Upstream Transportation and Distribution
  5. Waste Generated in Operations
  6. Business Travel
  7. Employee Commuting
  8. Upstream Leased Assets
  9. Downstream Transportation and Distribution
  10. Processing of Sold Products
  11. Use of Sold Products
  12. End-of-Life Treatment of Sold Products
  13. Downstream Leased Assets
  14. Franchises
  15. Investments

Scope 3 categories with descriptions

1. Purchased Goods and Services: Emissions from the production of goods and services purchased or acquired by the reporting company.

2. Capital Goods: Emissions from the production of capital goods purchased or acquired by the reporting company.

3. Fuel- and Energy-Related Activities (not included in Scope 1 or Scope 2): Emissions related to the production of fuels and energy that the company consumes but does not directly emit.

4. Upstream Transportation and Distribution: Emissions from the transportation and distribution of goods and services in vehicles and facilities not owned or controlled by the reporting company.

5. Waste Generated in Operations: Emissions from the disposal and treatment of waste generated in the reporting company's operations.

6. Business Travel: Emissions from the transportation of employees for business-related activities in vehicles not owned or controlled by the reporting company.

7. Employee Commuting: Emissions from the transportation of employees between their homes and their worksites.

8. Upstream Leased Assets: Emissions from the operation of assets that are leased by the reporting company (where the reporting company is the lessee and does not report Scope 1 or Scope 2 emissions for the same assets).

9. Downstream Transportation and Distribution: Emissions from the transportation and distribution of goods sold by the reporting company in vehicles and facilities not owned or controlled by the reporting company.

10. Processing of Sold Products: Emissions from the processing of goods sold by the reporting company.

11. Use of Sold Products: Emissions from the use of goods and services sold by the reporting company.

12. End-of-Life Treatment of Sold Products: Emissions from the disposal and treatment of goods sold by the reporting company at the end of their life.

13. Downstream Leased Assets: Emissions from the operation of assets owned by the reporting company and leased to others (where the reporting company retains the obligation to report Scope 1 and Scope 2 emissions).

14. Franchises: Emissions from the operation of franchises not owned or controlled by the reporting company.

15. Investments: Emissions from the operation of investments not owned or controlled by the reporting company, for which the reporting company does not report Scope 1 or Scope 2 emissions.

3. Importance of Categories: By categorizing Scope 3 emissions, companies can prioritize areas with the highest emissions and develop targeted strategies for reduction. It also allows for better benchmarking and comparison with industry peers.

4. The Challenge: While categorization provides clarity, it also demands comprehensive data collection across various business activities. Collaborating with suppliers and partners becomes essential to gather accurate data.

Conclusion: Scope 3 categories offer a roadmap for businesses to navigate their sustainability efforts. By understanding and addressing each category, companies can achieve a more holistic and impactful emissions reduction strategy.