Scope 3 Assessment

WifOR’s Scope 3 analyses provide companies with a comprehensive overview of their indirect greenhouse gas emissions across the value chain and help close data gaps. The results offer deeper insights into emission drivers and highlight the areas with the greatest impact.

Research Sustainability Scope 3 Assessment

What are Scope 3 emissions?

The  GHG Protocol  divides greenhouse gas emissions into three categories, known as scopes. Scope 3 is usually the most comprehensive category and includes all indirect greenhouse gas emissions along a company’s value chain, except indirect emissions from energy use. Since Scope 3 emissions are not directly caused by a company, measuring them is complex and requires comprehensive analysis.

Overview of the different scopes as defined in the GHG Protocol:

Scope 1 – direct emissions from company-owned sources
Scope 2 – indirect emissions from energy use
Scope 3 – remaining indirect emissions along the entire value chain

The GHG Protocol provides internationally accepted and widely used standards for measuring, reporting, and assessing CO₂, methane, as well as other greenhouse gas emissions. It supports companies and organizations in reducing negative environmental impacts and achieve their climate goals.

Overview of GHG Protocol scopes and emissions across the value chain

Categories of Scope 3 emissions

The GHG protocol differentiates between upstream and downstream GHG emissions. While upstream Scope 3 relates to emissions in the supply chain, downstream contains those GHG emissions that occur after an organization’s products or services have been sold, for example through product use or consumption.

Upstream emissions

Upstream Scope 3 emissions encompass all indirect emissions that occur along a company’s supply chain, but are not directly owned or controlled by the organization. These upstream emissions can include a wide range of sources, depending on the nature of the organization and its operations.

Sources of upstream Scope 3 emissions

Purchased goods and services
Capital goods
Fuel- and energy-related activities which are not included in Scope 1 or Scope 2
Upstream transportation and distribution
Waste generated in operations
Business travel
Employee commuting
Upstream leased assets

Downstream emissions

Downstream Scope 3 emissions are another category of greenhouse gas emissions that fall under the broader framework of Scope 3 as defined by the GHG Protocol. These emissions are also indirect and caused by the use or disposal of an organization’s products and services.

Sources of Downstream Scope 3 emissions

Transportation and distribution
Processing of sold products
Use of sold products
End-of-life treatment of sold products
Downstream leased assets
Franchises
Investments

In most cases, downstream emissions remain difficult to reduce because companies have limited direct control over emissions related to the products they sell. Therefore, effectively managing downstream emissions requires stronger customer engagement and more sustainable product design wherever applicable.

Why should organizations measure Scope 3 emissions?

Measuring Scope 3 emissions is primarily of legal relevance: The EU Corporate Sustainability Reporting Directive (CSRD) requires companies above a certain size to report their Scope 3 emissions – according to EU estimates, nearly 50,000. The metrics are therefore particularly important for sustainability reporting, as they help companies to meet their accountability obligations.

This not only improves transparency for communication with external stakeholders but is also particularly valuable for internal decision-making. After all, Scope 3 usually accounts for the majority of emissions generated by companies. Therefore, this area often also offers the greatest opportunities for improving an organization’s carbon footprint in order to achieve climate targets. Scope 3 analysis creates a scientific basis by identifying environmental hotspots and reduction potentials along the supply chain.

How can organizations reduce Scope 3 emissions?

Analyzing the value chain is a key step in order to identify which areas of a company generate the highest Scope 3 emissions. Therefore, the screening and identification of the most relevant Scope 3 categories is essential for measuring emissions.

Once the relevant categories are identified, both upstream and downstream, the next step is to quantify the emissions resulting from these categories. The outcome of this analysis can be adapted according to the requirements of the company – for example, by geographic region, sector, business unit, commodity, department, or supplier – and disaggregated at various value chain levels. This hotspot analysis allows supplier lists to be adjusted, purchasing decisions to become targeted, and an uplift in innovation.

How can WifOR support companies?

WifOR’s Scope 3 Assessment is based on the methodology recommended by the GHG Protocol. The approach is broken down into three steps: identifying relevant Scope 3 categories for an organization or industry, quantifying the emissions throughout the global value chain, and adapting results according to the customers’ needs to provide relevant insights.

To calculate global impacts, WifOR uses an environmentally extended input-output model. These results are then refined to provide insights at the country, product, department or, depending on the data, supplier level. Therefore, WifOR has the ability to provide results at any required granularity level.

This offers a variety of benefits for organizations and industries:

Establishing a scientific basis for holistically managing environmental sustainability
Providing insights into environmental hotspots and reduction potentials in the value chain
Opening new channels of dialogue with stakeholders across society and supporting informed communication
Enhancing non-financial reporting based on reliable data

Learnings from our Scope 3 Masterclass with Insights from Takeda and Evonik

Collaboration across the value chain is essential to move from isolated decarbonization efforts to improved impact. This was one of the key takeaways from WifOR Institute’s Scope 3 Masterclass, moderated by Paulina Rossnagel. Together with Jessica Vieira, PhD (Takeda) and Ranjan Fletcher (Evonik), the session explored perspectives from both the manufacturer and supplier sides – and what it takes to translate net-zero targets into coordinated progress.

Watch the session recording here.

“To make Scope 3 actionable, companies need to identify hotspots, prioritize the right suppliers, and translate insights into concrete actions – rather than waiting for perfect data.”

Jessica Vieira, Head of Environmental Sustainability Operations and Business Excellence  at Takeda

“Primary data remains one of the biggest challenges in Scope 3, especially upstream. That’s why it’s essential to focus on hotspots, understand what is under your sphere of influence, and take action where it matters most.”

Ranjan Fletcher, Manager Sustainability Development Health Care  at Evonik