From Source to System: Understanding Scope 1, 2, and 3 Emissions - Part 3
- Kevin Bolland
- Jun 25
- 6 min read
Scope 3 Emissions: The Hidden Majority of Corporate Emissions
In Part 1, we explored Scope 1 emissions—the greenhouse gases released directly from sources owned or controlled by an organization. In Part 2, we examined Scope 2 emissions, which account for the indirect emissions associated with purchased electricity, heating, cooling, and steam.
Together, Scope 1 and Scope 2 provide valuable insight into an organization's operational footprint. However, for many companies, these categories represent only a fraction of their total environmental impact.
The largest share of emissions often exists beyond company facilities, vehicle fleets, and utility bills. These emissions occur throughout the value chain—in the extraction of raw materials, the transportation of goods, employee travel, product use, and eventual disposal.
These are known as Scope 3 emissions.
Scope 3 emissions are often the most difficult to measure, the most difficult to influence, and the most significant contributor to an organization's overall greenhouse gas footprint. Yet they are also where some of the most meaningful opportunities for improvement can be found.
What Counts as Scope 3 Emissions?
Definition
According to the Greenhouse Gas Protocol, Scope 3 emissions are all indirect emissions that occur throughout an organization's value chain and are not included in Scope 2.
These emissions occur both upstream and downstream of a company's direct operations.
Upstream Activities
Examples include:
Purchased goods and services
Raw material extraction
Supplier operations
Transportation and distribution
Business travel
Employee commuting
Waste generated during operations
Capital goods and infrastructure
Downstream Activities
Examples include:
Product transportation
Product use
Product maintenance
Product disposal
End-of-life treatment
Franchises and investments
Because Scope 3 encompasses activities that often occur outside a company's ownership or direct control, measurement can be significantly more complex than Scope 1 or Scope 2 reporting.
Why Scope 3 Is Often the Largest Category
Most organizations occupy only a small portion of the systems that enable their products and services to exist.
A company may operate a single manufacturing facility, but that facility relies on suppliers, transportation networks, infrastructure, customers, maintenance providers, and disposal systems that extend far beyond the organization's property lines.
As a result, Scope 3 emissions frequently account for the majority of a company's reported greenhouse gas footprint.
For some organizations, Scope 3 emissions can represent more than 70%, 80%, or even 90% of total emissions.
This does not necessarily mean companies are intentionally ignoring emissions. Rather, it reflects the reality that modern products and services exist within interconnected systems that span industries, regions, and continents.
Industry Example 1: Gardening, Landscaping, and Nurseries
At first glance, landscaping and nursery operations may appear relatively localized. However, many of their environmental impacts originate within larger supply chains.
Common Sources
Examples of Scope 3 emissions include:
Production of fertilizers and soil amendments
Manufacturing of lawn equipment
Production of irrigation materials
Employee commuting
Transportation of plants and nursery stock
Delivery of mulch, soil, and hardscape materials
Disposal of landscaping waste
Customer transportation to garden centers
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Real-World Scenario
A nursery may purchase thousands of plants from growers located hundreds of miles away. Those plants require transportation, packaging materials, water, fertilizers, greenhouse operations, and supporting infrastructure before they ever arrive at the nursery.
While the nursery does not directly control those activities, they contribute to the overall emissions associated with the products being sold.
Similarly, customers may drive significant distances to purchase landscaping materials, creating downstream emissions associated with the nursery's business activities.
How These Emissions Are Measured
Organizations may use:
Supplier emissions disclosures
Transportation records
Procurement data
Waste management reports
Employee commuting surveys
Industry-average emissions factors
Opportunities for Improvement
Potential strategies include:
Sourcing locally grown materials
Reducing transportation distances
Improving supplier engagement
Encouraging carpooling and alternative commuting
Selecting lower-impact materials
Reducing waste generation
Industry Example 2: Air Travel and Aviation
The aviation industry provides one of the clearest examples of how extensive Scope 3 emissions can become.
Common Sources
Examples include:
Aircraft manufacturing
Raw material extraction
Airport construction
Supplier transportation networks
Employee commuting
Business travel
Catering services
Passenger transportation to and from airports
Aircraft decommissioning and recycling
Real-World Scenario
An airline's Scope 1 emissions include the fuel burned during flight operations. However, the aircraft themselves are manufactured from materials extracted, processed, transported, assembled, and maintained through global supply chains.
Passengers also travel to and from airports using personal vehicles, buses, trains, rideshare services, and taxis.
Although these activities occur outside the airline's direct control, they contribute to the broader emissions associated with air travel.
How These Emissions Are Measured
Organizations often rely on:
Supplier reporting
Transportation data
Passenger travel estimates
Procurement records
Economic input-output models
Opportunities for Improvement
Potential approaches include:
Sustainable procurement programs
Supplier emissions reduction initiatives
More durable aircraft designs
Coordination with transportation providers
Investments in lower-carbon supply chains
Industry Example 3: Fashion and Apparel
The fashion industry is frequently cited as an example of a sector where Scope 3 emissions dominate the overall footprint.
Common Sources
Examples include:
Cotton cultivation
Synthetic fiber production
Textile manufacturing
Dye production
Global shipping and logistics
Retail distribution
Consumer transportation
Product washing and drying
Product disposal and landfill impacts
Real-World Scenario
A shirt may be designed in one country, manufactured in another, assembled in a third, shipped across oceans, distributed through multiple warehouses, purchased by a consumer, washed dozens of times throughout its life, and eventually discarded.
Many of the emissions generated throughout this lifecycle occur outside the direct ownership of the brand selling the product. Yet they remain part of the product's overall environmental footprint.
Some brands are about slow-fashion and heirloom pieces that stand the test of time. For instance, some clothing designers like Rebecca Bolland of REDxRB intentionally limit profitability and scalablity to prioritize luxury and heirloom grade construction from local sources of fabric, or rescued material. By using deadstock fabrics, REDxRB significantly cuts down manufactuing waste.
How These Emissions Are Measured
Common approaches include:
Supplier disclosures
Lifecycle assessments
Transportation records
Consumer use assumptions
Product material inventories
End-of-life modeling
Opportunities for Improvement
Organizations may pursue:
Sustainable material sourcing
Circular economy initiatives
Durable product design
Reduced packaging
Improved recycling programs
Supplier sustainability requirements
Why Scope 3 Matters
Scope 3 emissions encourage organizations to think beyond their immediate operations and examine the systems that support their products and services.
Unlike Scope 1 and Scope 2 reporting, Scope 3 accounting begins asking broader questions:
Where do materials come from?
How far do products travel?
How are products used?
What happens when products are discarded?
What supporting systems make business operations possible?
These questions reveal connections that are often invisible when evaluating only direct emissions.
A landscaping company depends on growers, equipment manufacturers, transportation providers, and customers.
An airline depends on manufacturers, airports, infrastructure providers, maintenance networks, and travelers.
A fashion brand depends on farmers, textile producers, shipping companies, retailers, and consumers.
The further one follows these connections, the larger the system becomes.
The Challenge of Measuring Consumption
Scope 3 reporting also introduces a difficult question:
Where does responsibility end?
Consider a clothing manufacturer that produces a durable, efficient, and responsibly sourced product. If consumers purchase far more clothing than they need, should those emissions be attributed entirely to the manufacturer, entirely to consumers, or somewhere in between?
Similarly, an airline may improve efficiency while passenger demand continues to increase.
A nursery may sell drought-tolerant plants that reduce water consumption while customers continue expanding water-intensive landscapes elsewhere.
These examples illustrate a fundamental challenge in sustainability reporting: products and services exist within patterns of human consumption that are difficult to quantify and even more difficult to control.
Reducing emissions is often possible.
Fully accounting for the behaviors those products enable is far more complex.
Key Takeaway
Scope 3 emissions include the vast network of upstream and downstream activities that support products and services throughout their lifecycle. For many organizations, these emissions represent the largest portion of their overall greenhouse gas footprint and the most challenging category to measure.
By examining suppliers, transportation networks, customer behavior, product use, and end-of-life impacts, Scope 3 reporting provides a broader understanding of how organizations interact with the systems around them.
Yet even Scope 3 has limits.
Some impacts remain difficult—or impossible—to capture through greenhouse gas accounting alone.
Noise, odors, habitat disruption, worker well-being, community resilience, local economic health, and countless other factors may influence sustainability outcomes without appearing in a carbon inventory.
In Part 4, we'll explore why Scope 1, 2, and 3 emissions are valuable tools, but not complete measures of sustainability, and why understanding real-world impact often requires moving beyond carbon accounting toward systems thinking.
