Scope 3: how to report the value chain without going mad
The 15 GHG Protocol categories, the relevance criterion and the calculation methods: the practical Scope 3 guide for SMEs.
Scope 3 gathers the indirect emissions of the value chain: purchases, third-party transport, business travel, waste, use of the products sold. For many companies it is over 70% of the total, and it is also the part that scares the most. The key is the relevance criterion: you don't need all 15 categories, you need the right ones done well.
The 15 categories, in two families
The GHG Protocol divides Scope 3 into upstream categories (purchased goods and services, inbound transport, waste, business travel, commuting) and downstream categories (distribution, use and end of life of the products sold). For a services SME purchases, business travel and cloud count most; for a manufacturer, raw materials and transport; for logistics, the subcarriers.
How to choose the relevant categories
The criterion is declared by the standard: you report the categories significant by size, by risk or by relevance to stakeholders. In practice: start from a rough estimate of all of them, identify those that weigh, and on those invest in quality data. The chosen boundary must be declared in the report.
Spend-based and activity-based
Two methods coexist. The spend-based converts spend amounts into emissions with average sector factors: fast, useful as a first map. The activity-based starts from physical quantities (tonnes, kilometres, kWh) with specific factors: more precise, necessary on the main categories. The best practice is hybrid: activity-based where the documents allow, spend-based on the rest.
Envify applies this approach automatically: where there are invoices with quantities it uses the physical data, elsewhere it classifies the spend.
The typical mistakes
- Chasing all the categories and finishing none.
- Asking suppliers for data before having exploited one's own documents.
- Not declaring the method used for each category.
- Comparing years calculated with different methods without flagging it.
