Calculating Scope 3 Emissions GHG Category 1 Purchased Goods and Services
Category description – Category 1 Purchased Goods and Services includes all upstream (i.e., cradle-to-gate) emissions from the production of products purchased or acquired by the reporting company in the reporting year. Products include both goods (tangible products) and services (intangible products).
This guidance page for Category 1 Purchased Goods and Services serves as a companion to the Scope 3 Standard to offer companies practical guidance on calculating their scope 3 emissions. It provides information not contained in the Scope 3 Standard, such as methods for calculating GHG emissions for each of the 15 scope 3 categories, data sources, and worked examples.
Category 1 includes emissions from all purchased goods and services not otherwise included in the other categories of upstream scope 3 emissions (i.e., category 2 through category 8). Specific categories of upstream emissions are separately reported in category 2 through category 8 to enhance the transparency and consistency of scope 3 reports.
Emissions from the transportation of purchased products from a tier one (direct) supplier to the reporting company (in vehicles not owned or controlled by the reporting company) are accounted for in category 4 (Upstream transportation and distribution).
Companies may find it useful to differentiate between purchases of production-related products (e.g., materials, components, and parts) and non-production-related products (e.g., office furniture, office supplies, and IT support). This distinction may be aligned with procurement practices and therefore may be a useful way to more efficiently organize and collect data (see box 5.2 of the Scope 3 Standard).
Summary of methods for calculating emissions from purchased goods and services
Companies may use the methods listed below to calculate scope 3 emissions from purchased goods and services. The first two methods – supplier-specific and hybrid – require the reporting company to collect data from the suppliers, whereas the second two methods – average-data and spend-based – use secondary data (i.e. industry average data). These methods are listed in order of how specific ( See Box 1.1 for further explanation of the data specificity and data accuracy) the calculation is to the individual supplier of a good or service. However, companies need not always use the most specific method as a first preference (see figure 1.1 and box 1.1).
- Supplier-specific method – collects product-level cradle-to-gate GHG inventory data from goods or services suppliers.
- Hybrid method – uses a combination of supplier-specific activity data (where available) and secondary data to fill the gaps. This method involves:
- collecting allocated scope 1 and scope 2 emission data directly from suppliers;
- calculating upstream emissions of goods and services from suppliers’ activity data on the amount of materials, fuel, electricity, used, distance transported, and waste generated from the production of goods and services and applying appropriate emission factors; and
- using secondary data to calculate upstream emissions wherever supplier-specific data is not available.
- Average-data method – estimates emissions for goods and services by collecting data on the mass (e.g., kilograms or pounds), or other relevant units of goods or services purchased and multiplying by the relevant secondary (e.g., industry average) emission factors (e.g., average emissions per unit of good or service).
- Spend-based method – estimates emissions for goods and services by collecting data on the economic value of goods and services purchased and multiplying it by relevant secondary (e.g., industry average) emission factors (e.g., average emissions per monetary value of goods).
Read more