Written by Field Name
Report Date
5 min read
Written by Fair Supply
February 5, 2026
5 min read
For most organisations, Scope 3 emissions represent the largest share of total greenhouse gas emissions, often accounting for 70–90% of the overall footprint. They are also the most complex to calculate, as they span upstream suppliers, logistics providers, customers and end users.
Unlike Scope 1 and Scope 2 emissions, Scope 3 emissions rely heavily on external data, estimates and assumptions. This makes them harder to measure, validate and audit yet increasingly critical as investors, regulators and customers expect transparency across the full value chain.
This guide explains how to calculate Scope 3 emissions in practice. It sets out the main calculation methods, when to use each, common mistakes to avoid, and a clear step-by-step workflow aligned with the GHG Protocol. It also explains why Fair Supply’s system delivers more reliable and defensible Scope 3 results.
Why Calculating Scope 3 Emissions Matters
Calculating Scope 3 emissions is no longer optional for many organisations.
- Scope 3 emissions typically make up the majority of a company’s carbon footprint
- Investors and lenders increasingly expect value chain emissions disclosure
- Customers and procurement partners require supply chain transparency
- Net-zero strategies are incomplete without Scope 3 coverage
- Regulatory reporting regimes require Scope 3 emissions to be included.
Beyond compliance, Scope 3 calculations enable practical decision-making such as prioritising supplier engagement, informing procurement choices, and identifying emissions hotspots across the value chain.
Core Principles Before You Calculate
Before selecting any calculation method, organisations should align on a few core principles:
- Use the GHG Protocol as the baseline standard for Scope 3 accounting
- Prioritise data quality, using primary data where feasible
- Be consistent year-to-year to enable trend analysis
- Document assumptions and methodologies to support audit and assurance
Scope 3 accounting is an iterative process. The goal is not perfection in year one, but continuous improvement over time.
Scope 3 Categories That Need Calculation
The GHG Protocol defines 15 Scope 3 emissions categories, covering upstream and downstream activities. These include:
- Purchased goods and services
- Capital goods
- Fuel- and energy-related activities
- Transportation and distribution (upstream and downstream)
- Waste generated in operations
- Business travel and employee commuting
- Use and end-of-life treatment of sold products
- Leased assets, franchises and investments
In practice, organisations should focus first on the categories that represent the largest share of their emissions, rather than attempting to calculate all categories at the same level of detail.
Methods for Calculating Scope 3 Emissions
There is no single method for calculating Scope 3 emissions. Most organisations use a combination of approaches depending on data availability, supplier maturity and reporting timelines.
1. Supplier Data (Primary Data)
What it is
Emissions data reported directly by suppliers, typically covering Scope 1, 2 and sometimes Scope 3 from the supplier’s perspective.
When to use it
High spend or high impact suppliers where data access is feasible.
Pros
- Most accurate and company-specific
- Supports supplier engagement and reductions
Cons
- Data availability varies
- Requires supplier maturity and coordination
Example
A furniture manufacturer collects emissions data directly from its timber and metal suppliers.
2. Spend-Based Method
What it is
Estimates emissions by applying emission factors to financial spend data.
When to use it
When supplier- specific data is unavailable or incomplete.
Pros
- Scalable and widely applicable
- Mandated and accepted under the GHG Protocol
Cons
- Less precise than primary data
- Reflects averages rather than actual supplier performance
Example
$1 million spent on office supplies is multiplied by an industry emission factor to estimate associated emissions.
3. Average-Data (Secondary) Method
What it is
Uses published industry averages (e.g. life cycle databases, national statistics).
When to use it
Where spend does not align neatly with supplier or activity data.
Pros
- More representative than generic spend factors
- Useful for specific materials
Cons
- Not supplier-specific
- Limited differentiation
Example
Using average emissions per tonne of steel for purchased materials.
4. Activity Data × Emission Factors
What it is
Calculates emissions based on physical activity data, such as distance travelled or energy consumed.
When to use it
Logistics, freight, business travel and fuel-related activities.
Pros
- More accurate than spend-based for transport
- Intuitive and transparent
Cons
- Data collection can be manual
- Requires consistent tracking
Example
Kilometres travelled by freight × emissions factor per kilometre.
5. Hybrid (Tiered) Approach
What it is
A combination of supplier data, spend-based and average-data methods.
When to use it
Most real world business scenarios.
Pros
- Accuracy where it matters most
- Practical and scalable
Cons
- Requires judgement and governance
Example
Primary data from the top 20 suppliers, with spend based estimates for remaining suppliers.
Choosing the Right Method for Your Business
The appropriate calculation method depends on several factors:
- Organisation size and complexity
- Availability and quality of supplier data
- Supplier maturity
- Reporting deadlines and assurance requirements
- Internal capability and budget
In practice:
- If you have reliable supplier data, use primary data
- If not, apply spend-based or average-data methods
- Most organisations adopt a hybrid approach
Step-by-Step Practical Workflow
A practical Scope 3 calculation workflow typically follows these steps:
- Map your value chain
Identify suppliers, customers and relevant Scope 3 categories. - Set data sources and owners
Assign responsibility across finance, procurement and sustainability teams. - Collect supplier data where possible
Focus on high-impact suppliers first. - Assign emission factors
Use recognised, regularly updated factor libraries. - Calculate emissions using selected methods
Apply consistent methodologies across categories. - Review and validate results
Identify anomalies and emissions hotspots. - Document assumptions
Maintain clear records for audit and assurance. - Report and improve next cycle
Refine data quality year-on-year.
Common Mistakes and Best Practices
Common mistakes
- Relying on a single method for all categories
- Treating Scope 3 as a one off exercise
- Failing to document assumptions
- Ignoring downstream emissions
Best practices
- Start broad, then refine hotspots
- Use hybrid methods
- Engage suppliers early
- Design for audit from day one
How Fair Supply Helps with Scope 3 Calculation
Fair Supply supports organisations to calculate Scope 3 emissions in line with the GHG Protocol using a systematic, audit-ready approach.
Fair Supply combines:
- A purpose-built Scope 3 data reporting platform and carbon emissions accounting software
- Spend-based and revenue-based screening methods
- Supplier engagement workflows for primary data collection
- Regularly updated emission factor libraries
- Hybrid calculation support across methods
- Expert consultants to apply judgement and governance
Fair Supply is not just a calculator. It is a complete system combining technology, data and expert support designed to produce reliable Scope 3 results that stand up to scrutiny.
Conclusion
Calculating Scope 3 emissions is complex, but it is manageable with the right methods and systems. By selecting appropriate calculation approaches, documenting assumptions and improving data quality over time, organisations can build credible, decision-ready Scope 3 inventories.
Accurate Scope 3 calculation enables meaningful decarbonisation action across the value chain. Fair Supply supports organisations at every step from initial screening to supplier engagement and audit-ready reporting.
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