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Scope 3 greenhouse gas emissions – the 15 categories

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Scope 1 and 2 emissions are much easier to calculate than Scope 3 emissions as they are directly controlled by a company. To effectively measure Scope 3 emissions, companies need to dive deeper into their value chain. The Greenhouse Gas Protocol lists 15 different categories of Scope 3 emissions detailed below.

Emissions from upstream activities

An upstream activity is an operational point that occurs early on in a given process. These activities can be further categorised, as detailed below.

  1. Business travel: travel by air, rail, taxis, and buses and private vehicles.
  2. Employee commuting: emissions released from employees commuting to work.
  3. Waste generation: waste disposal in landfills and wastewater treatments.
  4. Purchased goods and services: all the upstream emissions (cradle to gate) from the production of goods and services. It is important to distinguish between products and goods that are production-related (e.g. materials, equipment, and components), and products and goods that are non-production-related (e.g. furniture and IT systems).
  5. Transportation and distribution: supplier and customer transportation, by land, sea, and air. This category also includes third-party warehousing.
  6. Fuel and energy-related activities: energy related to the production of fuel, and the energy purchased and consumed by the reporting organisation that’s not already accounted for in scopes 1 and 2.
  7. Capital goods: purchased goods that are used to manufacture a product, provide a service, or are used for storing, selling, and delivering merchandise need to have their emissions accounted for.
  8. Upstream leased assets: emissions from the operation of assets that are leased by the reporting company, in the reporting year, and not already included in the reporting company’s scope 1 or 2 inventories.

Emissions from downstream activities

Downstream emissions are those that occur in the final steps of a given process. Downstream emissions are categorised further as follows.

  1. Investments: according to GHG accounting, investments comprise: Equity investments, debt investments, project finance, managed investment, and client services. This category is mainly relevant to larger financial institutions, but other organisations involved in investment opportunities should report on this.
  2. Downstream distribution and transportation: emissions that occur from the transportation and the distribution of sold products in vehicles and facilities not owned or controlled by the reporting company.
  3. Processing of sold products: emissions from the processing of sold intermediate products by third parties. Intermediate products are those that require further processing, transformation, and inclusion in another product before use.
  4. Franchises: companies that operate under a franchise (paying a fee to the franchisor) should consider reporting emissions associated with the franchisor’s operations (i.e. Scope 1 and 2 emissions of the franchisor).
  5. Downstream leased assets: emissions from the operation of assets that are leased, and not already included in the reporting company’s Scope 1 or 2 inventories.
  6. Use of sold products: products that are sold to the consumer, and includes emissions that result from product usage. These emissions may vary considerably.
  7. End of life retirement: this is reported similarly as waste generated from operations. To report emissions from end-of-life retirement, companies must assess how products are disposed of.
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