Identifying Relevant scope 3 categories for your business

Scope 3 emissions cover indirect emissions that result from your company's activities, extending beyond direct operations and energy purchases. These emissions are often complex to calculate and manage because they occur outside of your company’s direct control. To help you prioritize which Scope 3 categories to track, we’ve prepared a guide based on the GHG Protocol’s recommendations. Each of the following 5 criteria can help you identify your highest-priority categories.

1. Materiality

Identify categories that are material—those that contribute significantly to your company’s total GHG emissions or align with your sustainability goals. For example:

An e-commerce company might prioritize logistics emissions.

A consultancy might focus on business travel emissions.

A useful way to identify material categories is by analyzing your company’s expenses. Generally, the higher your expenses for a specific category, the higher the associated emissions are likely to be. To help you map expenses to Scope 3 categories, we’ve prepared the following table of example expenses. If your company has significant expenses in a particular category, it’s likely material and should be accounted for.

Upstream Scope 3 Categories	Example Expenses
3.1 Purchased Goods and Services	Production-related products (materials, components, packaging).
	Non-production-related products (office furniture, supplies).
	Services (accounting, IT support, R&D, construction).
3.2 Capital Goods	Equipment (IT hardware, machinery).
	Buildings, facilities, and vehicles (if purchased, not leased).
3.3 Fuel- and Energy-Related Activities	Extraction, production, and transportation of fuels and energy not already included in Scope 1 or 2.
3.4 Upstream Transportation and Distribution	Transportation services (inbound/outbound logistics, third-party distribution).
	Warehousing and storage of purchased products.
3.5 Waste Generated in Operations	Waste disposal and treatment (landfill, recycling, incineration, composting, wastewater).
3.6 Business Travel	Employee travel for business (air, rail, bus, rental cars, hotels).
3.7 Employee Commuting	Employee travel to and from work (public transport, personal vehicles).
3.8 Upstream Leased Assets	Leased assets (buildings, vehicles, equipment) not included in Scope 1 or 2.

Downstream Scope 3 Categories	Example Expenses
3.9 Downstream Transportation and Distribution	Transportation of sold products (outbound logistics, third-party distribution).
	Warehousing and storage of sold products.
3.10 Processing of Sold Products	Processing of intermediate products sold to other companies (e.g., refining, manufacturing).
3.11 Use of Sold Products	Emissions from the use of products sold (e.g., energy consumption of electronics, vehicles).
3.12 End-of-Life Treatment of Sold Products	Disposal, recycling, or incineration of products at the end of their life cycle.
3.13 Downstream Leased Assets	Leased assets (e.g., buildings, vehicles) used by customers or other downstream entities.
3.14 Franchises	Emissions from franchise operations (if applicable).
3.15 Investments	Emissions associated with investments (e.g., equity, debt, project finance).

2. Engagement and Influence

Focus on categories where your company can directly influence emissions reductions through business relationships. For example:

A retail corporation with significant supply chain emissions could work with key suppliers to reduce their emissions.

A manufacturer could collaborate with customers to improve the energy efficiency of sold products.

3. Stakeholder Interests

Consider the interests of stakeholders such as investors, customers, and regulatory bodies. For example:

Conduct surveys or collect feedback from customers, investors, employees, and local communities to understand their priorities.

Align your Scope 3 tracking with regulatory requirements or industry standards.

4. Data Availability and Quality

Prioritize categories where you can access reliable data. For example:

Business travel data is often readily available through internal records or travel agencies.

Supply chain emissions (e.g., Category 3.1) are more challenging due to data opacity and the involvement of multiple players.

5. Benchmarking

Compare your Scope 3 tracking with industry peers or sector benchmarks to understand prevalent practices. For example:

Analyze how competitors prioritize Scope 3 categories and align your strategy accordingly.

Use industry benchmarks to identify gaps and opportunities for improvement.

By following these criteria, you can effectively identify and prioritize the most relevant Scope 3 categories for your business. If you need further assistance, our team is here to help!