Glossary · ESG
Scope 3 Emissions
Indirect greenhouse gas emissions occurring in an organization's value chain, including both upstream suppliers and downstream product use.
Full definition
Scope 3 emissions represent all indirect emissions not included in Scope 2 (purchased energy), typically constituting 70-90% of a company's total carbon footprint. These include purchased goods and services, business travel, employee commuting, transportation and distribution, waste, use of sold products, and end-of-life treatment. Measuring Scope 3 requires extensive supply chain data collection and estimation methodologies, creating both measurement challenges and significant risk management implications. Regulatory and investor pressure increasingly demands Scope 3 disclosure and reduction targets. An automobile manufacturer's Scope 3 emissions from vehicle use over their lifetime dwarf manufacturing emissions (Scope 1 and 2), driving product strategy toward electrification to meet climate commitments and address regulatory risks in markets implementing stringent emissions standards.
ESGclimate-risksupply-chaincarbon-accounting