While Scope 1 2 3 emissions together provide a complete picture of organisational impact, for almost all organisations, Scope 3 emissions account for the largest share of their carbon footprint. They capture indirect emissions across the value chain, from purchased goods and services through to product use and end-of-life treatment.
Yet Scope 3 is also the most complex area of greenhouse gas (GHG) reporting, largely because it relies on a wide range of activity data and emissions factors within the broader context of UK carbon reporting requirements.
This guide explains the key Scope 3 categories, what each category covers, and the types of emissions factors typically used to support consistent, defensible reporting.
What are Scope 3 Emissions?
Scope 3 emissions are defined by the GHG Protocol as all indirect emissions that occur in an organisation’s upstream and downstream value chain, excluding those already reported in Scope 1 and Scope 2.
To standardise reporting, Scope 3 is divided into 15 categories, grouped into upstream and downstream activities. Each category uses different data sources and emissions factors, often drawing on DEFRA conversion factors, industry datasets, or supplier specific information.
Upstream Scope 3 Emissions Categories (1–8)
1 Purchased Goods and Services
What it covers:
Emissions from the extraction, production and supply of goods and services purchased by the organisation.
Typical emissions factors:
- Spend based factors (e.g. emissions per £ spent)
- Activity based factors (e.g. emissions per tonne or unit of material)
- Supplier specific product carbon footprints.
Examples:
Raw materials, IT equipment, professional services, catering, facilities management.
2 Capital Goods
What it covers:
Emissions associated with the manufacture and construction of long term assets.
Typical emissions factors:
- Construction material factors (steel, concrete, glass)
- Capital expenditure based factors
- Asset lifecycle emission factors.
Examples:
Buildings, plant and machinery, vehicles, major IT infrastructure.
3 Fuel and Energy Related Activities (not included in Scope 1 or 2 Emissions)
What it covers:
Upstream emissions linked to fuels and electricity already reported in Scope 1 and Scope 2.
Typical emissions factors:
- Well to tank fuel factors
- Electricity transmission and distribution losses
- Upstream fuel production factors.
4 Upstream Transportation and Distribution
What it covers:
Emissions from transporting and storing goods purchased by the organisation between tier 1 suppliers and the reporting organisation, as well as third-party transportation and distribution services purchased by the organisation, where these emissions are not already included in Scope 1 or Scope 2 emissions.
Typical emissions factors:
- Freight factors by transport mode (road, rail, sea, air)
- Distance or tonne kilometre based factors.
5 Waste Generated in Operations
What it covers:
Emissions from the treatment and disposal of operational waste.
Typical emissions factors:
- Waste treatment factors (recycling, landfill, incineration)
- Factors by waste type and weight.
6 Business Travel
What it covers:
Emissions from employee travel undertaken for business purposes in vehicles not owned or operated by the reporting organisation, such as flights, rail, buses, taxis and rental cars.
Typical emissions factors:
- Passenger travel factors (air, rail, car, taxi)
- Distance or spend based travel factors.
Good to know:
Companies may also choose to include emissions from hotel stays within this category.
7 Employee Commuting
What it covers:
Emissions from employees travelling to and from their place of work.
Typical emissions factors:
- Mode specific commuting factors
- Average distance or survey based assumptions.
Good to know:
Companies may also include emissions associated with employee homeworking within this category.
8 Upstream Leased Assets
What it covers:
Emissions from leased assets not already included in Scope 1 or Scope 2.
Typical emissions factors:
• Building energy intensity factors
• Asset specific fuel and electricity factors.
Examples:
Emissions associated with leased buildings where heating and cooling are outside the organisation’s operational control.
Downstream Scope 3 categories (9–15)
9 Downstream Transportation and Distribution
What it covers:
Emissions from transportation and storage of sold products after the point of sale, where the reporting organisation does not purchase the transport service and does not own or operate the transport or storage assets.
Typical Emissions Factors:
- Logistics and freight factors
- Distance and weight based assumptions.
10 Processing of Sold Products
What it covers:
Emissions from further processing of intermediate products sold by the organisation.
Typical emissions factors:
- Industry specific processing factors
- Energy intensity benchmarks.
Examples:
Emissions from the further processing of sold intermediate products by third parties after sale.
11 Use of Sold Products
What it covers:
Emissions generated during the use phase of sold products.
Typical emissions factors:
- Lifetime energy consumption factors
- Use phase assumptions based on product design and behaviour.
Examples:
Emissions related to electricity consumption of a sold product
12 End of Life Treatment of Sold Products
What it covers:
Emissions from disposal, recycling or recovery of products at end of life.
Typical emissions factors:
- Waste treatment factors by material type
- End of life scenario assumptions.
13 Downstream Leased Assets
What it covers:
Emissions from assets owned by the organisation but leased to third parties.
Typical emissions factors:
- Energy consumption factors
- Asset specific emission intensities.
Examples:
Emissions from the operation of buildings, vehicles or equipment owned by the organisation and leased to third parties.
14 Franchises
What it covers:
Emissions from franchise operations not included elsewhere.
Typical emissions factors:
- Energy and fuel use factors
- Sector specific averages.
15 Investments
What it covers:
Emissions associated with financial investments.
Typical emissions factors:
- Financed emissions factors
- Asset class emission intensity data.
Choosing the right emissions factors for Scope 3
Most organisations apply a data hierarchy when calculating Scope 3 emissions:
- Supplier specific data (most accurate)
- Activity based emissions factors
- Spend based emissions factors (least precise, but scalable)
The right approach depends on materiality, data availability, reporting objectives and organisational maturity. Many organisations start with high level estimates and refine their methodology over time.
Why Scope 3 Emissions Factors Matter
Using the right emissions factors is essential for:
- Identifying emissions hotspots across the value chain
- Supporting credible carbon reduction plans
- Meeting reporting and disclosure requirements
- Building transparency with stakeholders and regulators.
Scope 3 reporting is not about achieving perfect data from day one. It is about establishing a robust, transparent methodology that improves year on year.
For further guidance around Scope Emissions and Emission Reporting, see:
Written by Tim Holman – Head of Consultancy, MSc, MEng, CEng, MEI
Tim directs TEAM’s consultancy practice, applying 25+ years in strategy, audits, metering, and compliance to deliver robust, audit-ready results for customers. A Chartered Energy Engineer and Member of the Energy Institute, Tim holds an MSc in Energy Conservation and the Environment from Cranfield University and an MEng in Mechanical Engineering from the University of Salford.