Scope 3: Other Indirect GHG Emissions

Introduction

Scope 3 includes all other indirect emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions. Scope 3 emissions are often the largest share of an organization’s total GHG emissions.

Categories in Scope 3

Upstream Emissions:

1. Purchased Goods and Services: Emissions from the production of goods and services that the organization purchases, such as raw materials, office supplies, and outsourced activities.

   • What is included: All relevant goods and services, such as raw materials and office supplies.
   • When does it apply: Applies to all organizations purchasing goods and services.
   • How to work with it: Collect data activity-based or with Environmental Product Declarations (EPDs). If not possible, use spend-based collection from invoices.
   • BeWo: The category has a separate section for water usage to help structure your data.

2. Capital Goods: Emissions from the production of capital goods purchased by the organization, including machinery, buildings, and equipment.

   • What is included: Machinery, buildings, equipment.
   • When does it apply: Applies to organizations investing in capital goods.
   • How to work with it: Track capital expenditures for the types of capital goods purchased.

3. Fuel- and Energy-Related Activities: Emissions related to the extraction, production, and transportation of fuels and energy purchased by the organization, not included in Scope 1 or Scope 2.

   • What is included: Extraction, production, and transportation of purchased fuels.
   • When does it apply: Relevant for organizations purchasing fuels and energy.
   • How to work with it: Calculate upstream emissions for fuels used in Scope 1 and Scope 2. Use fuel supplier data or standardized emission factors.
   • BeWo: This data is calculated automatically on the platform, based on your Scope 1 and 2 data.

4. Upstream Transportation and Distribution: Emissions from the transportation and distribution of goods purchased by the organization, including inbound logistics and warehousing.

   • What is included: Transportation modes, distances, and logistics.
   • When does it apply: Relevant for organizations with significant logistics operations.
   • How to work with it: Collect data on transportation modes and distances. Sometimes transportation services can provide GHG emissions calculations.

5. Waste Generated in Operations: Emissions from the disposal and treatment of waste generated in the organization’s operations, including waste to landfill, recycling, and wastewater treatment.

   • What is included: Waste quantities, disposal methods.
   • When does it apply: Applies to all organizations generating waste.
   • How to work with it: Track waste quantities and disposal methods.

6. Business Travel: Emissions from employee travel for business purposes, including flights, car rentals, and hotel stays.

   • What is included: Flights, car rentals, hotel stays.
   • When does it apply: Applies to organizations with business travel activities.
   • How to work with it: Record all business travel activities. Calculate emissions using travel distance and mode of transport.
   • BeWo: This category is split into 'Business Travel' and 'Business Travel Accommodation'.

7. Employee Commuting: Emissions from employees commuting to and from work, including personal vehicle use, public transportation, and carpooling.

   • What is included: Personal vehicle use, public transportation, carpooling.
   • When does it apply: Relevant for organizations with commuting employees.
   • How to work with it: Conduct surveys or use statistical data to estimate mode of transport and travel distances.
   • BeWo: The platform has a separate category for 'Remote Working', which calculates the GHG emissions when employees work remotely.

8. Upstream Leased Assets: Emissions from the operation of assets leased by the organization from other entities, not included in Scope 1 or Scope 2.

   • What is included: Leased assets' energy use.
   • When does it apply: Applies to organizations leasing assets.
   • How to work with it: Identify leased assets and their energy use. Calculate emissions using data from lessors.

Downstream Emissions:

1. Downstream Transportation and Distribution: Emissions from the transportation and distribution of sold products, including outbound logistics, warehousing, and retail activities.

   • What is included: Outbound logistics, warehousing, retail activities.
   • When does it apply: Relevant for organizations with distribution activities.
   • How to work with it: Track distribution activities and distances. Request GHG emissions data from distributors.

2. Processing of Sold Products: Emissions from the processing of intermediate products sold by the organization, such as components used by other companies to manufacture final products.

   • What is included: Intermediate product processing.
   • When does it apply: Applies to organizations selling intermediate products.
   • How to work with it: Engage with customers to obtain emission data or estimate based on industry standards for processing activities.

3. Use of Sold Products: Emissions from the use phase of products sold by the organization, such as fuel combustion in cars or electricity consumption in electronic devices.

   • What is included: Product usage emissions.
   • When does it apply: Relevant for organizations selling products with significant usage emissions.
   • How to work with it: Estimate product usage patterns and apply emission factors based on product type and usage.

4. End-of-Life Treatment of Sold Products: Emissions from the disposal and treatment of products sold by the organization at the end of their life, including recycling, landfill, and incineration.

   • What is included: Disposal methods and quantities of sold products.
   • When does it apply: Applies to all organizations with products that have an end-of-life phase.
   • How to work with it: Track the disposal methods and quantities of sold products.

5. Downstream Leased Assets: Emissions from the operation of assets leased to other entities, such as buildings, vehicles, or equipment.

   • What is included: Energy use in leased assets.
   • When does it apply: Relevant for organizations leasing assets to others.
   • How to work with it: Collect data on energy use and activities in leased assets.

6. Franchises: Emissions from the operation of franchises, where the organization grants the right to use its business model and brand.

   • What is included: Operational data from franchisees.
   • When does it apply: Applies to organizations with franchising operations.
   • How to work with it: Gather operational data from franchisees.

7. Investments: Emissions associated with the organization’s investments, including equity and debt investments, and managed funds.

   • What is included: Carbon footprint of portfolio companies or projects.
   • When does it apply: Relevant for organizations with significant investments.
   • How to work with it: Analyze the carbon footprint of portfolio companies or projects.

Application of Scope 3 Categories

When does Scope 3 apply to my organization?

Scope 3 applies to any organization with emissions occurring in its value chain, both upstream and downstream. The relevance and significance of Scope 3 emissions vary widely depending on the industry and the extent of the value chain activities.

Examples of Data for Estimation

Data Line	Where to Find the Data	Estimation Approach	Benefit
100 kg of reused steel beams	Invoice lines, inventory tracking, or bill of materials	Activity-based	High accuracy, activity-based approach provides reliability.
Travel distance for business trips	Travel records, booking data	Distance-based	Accurate estimation based on actual travel distances.
Employee commuting patterns	Surveys, statistical data	Survey-based	Provides detailed insights into commuting behaviors.
Energy use in leased assets	Data from lessors	Activity-based	Accurate data based on actual energy consumption.

How BeWo Handles Scope 3 Categories

The BeWo platform provides detailed categorization and automated data collection for Scope 3 emissions through ERP integration, making it easier for organizations to manage and report their indirect emissions.

Conclusion

Addressing Scope 3 emissions is crucial for organizations looking to understand and mitigate the full extent of their environmental impact. Given the complexity and breadth of Scope 3 emissions, a comprehensive approach involving detailed data collection, supplier engagement, and process optimization is necessary. Utilizing platforms like BeWo to automate data gathering and reporting helps organizations manage these indirect emissions effectively, fostering transparency and supporting their long-term sustainability goals.