All 15 scope 3 categories explained
Find out what each category covers, which are most material for your business, and how to prioritize.
Scope 3 categories are the 15 distinct types of indirect value chain emissions defined by the GHG Protocol’s Corporate Value Chain (Scope 3) Standard. They cover everything outside a business’ own operations and purchased energy, from the materials suppliers extract on its behalf, to how the business’ customers dispose of its products at end of life.
For most companies, scope 3 makes up the majority of the carbon footprint. According to CDP these supply chain emissions account for approximately 70-95% of greenhouse gas emissions across sectors.
Understanding which scope 3 emissions categories apply to your business, and which are material, is the foundation of a credible scope 3 inventory.
What are scope 3 emissions categories?
The GHG Protocol, the most widely used framework for corporate greenhouse gas accounting, divides scope 3 into 15 categories. Eight are upstream (categories 1-8), covering emissions from your supply chain. Seven are downstream (categories 9-15), covering what happens after you sell.
The structure exists to give companies a consistent, auditable way to identify different types of value chain emissions. A good way of looking at it is that upstream emissions cover everything leading up to the sale of the product, while downstream emissions result from the use of that product. So, one company’s downstream scope 3 emissions are another company’s upstream scope 3 emissions.
Not every category is material for every company though. A software company will have negligible Category 10 emissions, for example, while a car manufacturer’s Category 11 will dominate its entire carbon footprint. The table below is your starting point for working out what is relevant for your business.
For a broader introduction to scope 3 and why it matters, read our scope 3 emissions guide.
The 15 scope 3 categories: complete reference table
The table below covers all 15 categories as defined by the GHG Protocol, with descriptions and examples of the types of businesses that each are most relevant to.
| # | Category | Direction | What it covers | Typically most material for |
| 1 | Purchased goods and services | Upstream | Emissions from producing all goods and services you buy | Almost every company |
| 2 | Capital goods | Upstream | Machinery, buildings, vehicles, IT equipment you purchase | Manufacturing, construction |
| 3 | Fuel- and energy-related activities | Upstream | Extraction and transmission losses not in Scope 1 or 2 | Any company using fuel or grid energy |
| 4 | Upstream transportation and distribution | Upstream | Inbound logistics, third-party warehousing | Retail, manufacturing, distribution |
| 5 | Waste generated in operations | Upstream | Disposal and treatment of operational waste | Manufacturing, construction, retail |
| 6 | Business travel | Upstream | Flights, hotels, rail for business purposes | Professional services, large corporates |
| 7 | Employee commuting | Upstream | Staff travel between home and work | Office-heavy or field-worker businesses |
| 8 | Upstream leased assets | Upstream | Assets you lease from others, not in Scope 1 or 2 | Logistics, asset-heavy businesses |
| 9 | Downstream transportation and distribution | Downstream | Outbound logistics to end customers | Manufacturers selling direct to consumers |
| 10 | Processing of sold products | Downstream | Emissions when customers process your intermediate products | Intermediate goods producers |
| 11 | Use of sold products | Downstream | Energy consumed when customers use your products | Electronics, appliances, automotive |
| 12 | End-of-life treatment of sold products | Downstream | Disposal, recycling, incineration at end of product life | Any company selling physical products |
| 13 | Downstream leased assets | Downstream | Assets you own but lease to other entities | Leasing companies, asset owners |
| 14 | Franchises | Downstream | Emissions from franchise operations | Franchise-model businesses |
| 15 | Investments | Downstream | Financed emissions from equity, debt, and project finance | Banks, asset managers, holding companies |
Upstream scope 3 categories (1-8)
The eight upstream categories cover everything that feeds into your operations: the supply chain, inbound logistics, travel, and energy that make your business run. Let’s look at each of them in more detail and find out how they could apply to your business.
Category 1: Purchased goods and services
Category 1 covers the emissions generated in producing everything your business buys: raw materials, components, office supplies, software subscriptions, and professional services. Per the GHG Protocol, it covers “extraction, production, and transportation of goods and services purchased or acquired by the company.”
This is the largest scope 3 category for the majority of companies, but for different reasons. An electronics manufacturer that Normative works with found that Category 1 accounted for 84% of its total emissions, a number driven by third-party assembly services and component manufacturing. Meanwhile for a fast-fashion retailer we support, the challenge was assigning emission factors across 572 unique materials, including multi-material products like footwear. Digital businesses face a less obvious variant: an online marketplace we work with found that digital advertising and server infrastructure alone accounted for almost 50% of its total scope 3, because of the electricity intensity of ad technology.
Companies in food and agriculture should note the FLAG (Forest, Land and Agriculture) subset embedded within Category 1. The SBTi requires companies where land-related emissions exceed 20% of total scope 3 to set dedicated FLAG targets.
Because Category 1 is where supplier data has the greatest impact on accuracy, it is also the primary focus of supplier engagement programmes.
For practical guidance on collecting primary emissions data from your suppliers, read our guide to supplier engagement for scope 3.
Category 2: Capital goods
Category 2 covers the cradle-to-gate emissions of machinery, buildings, vehicles, and IT equipment you purchase, as opposed to lease. The GHG Protocol defines it as “extraction, production, and transportation of capital goods purchased or acquired by the company.”
It’s important to note though, that the full emissions of a capital asset are recorded in the year of acquisition, they are not depreciated over its useful life. Businesses should also be aware that reclassification between Category 1 and Category 2 is common. A customer of Normative’s for instance, saw a 110% year-on-year increase in Category 2, partly from a factory project, but also partly due to correcting prior-year miscategorization.
Category 3: Fuel- and energy-related activities
Category 4: Upstream transportation and distribution
Category 4 covers transportation and inbound logistics – the movement of goods and materials into a business’ operations using vehicles it does not own. This also includes upstream storage in warehouses, distribution centers and retail facilities. The GHG Protocol defines it as “transportation and distribution of products purchased by the company, as well as inbound logistics, outbound logistics, and transportation between company facilities.”
Mode of transport is the key variable in this category. At Normative, we’ve seen a customer reduce its Category 4 emissions by approximately 50% by shifting its freight mix away from air (which had accounted for 91% of transport emissions) toward sea freight. Another business found that 98% of its upstream transport emissions came from a single large supplier, an example of why targeted supplier engagement is so effective.
Category 5: Waste generated in operations
Category 5 covers the “disposal and treatment of waste generated in the company’s operations, in facilities not owned or controlled by the company,” as the GHG Protocol defines it.
Data requirements are relatively straightforward: waste type and quantity, treatment method, and supplier name. The category is growing in regulatory relevance though as the Corporate Sustainability Reporting Directive (CSRD) requires granular physical waste disclosures. This includes total weights broken down by treatment type, under ESRS E5 (Resource use and circular economy), while the associated greenhouse gas emissions must be accounted for under ESRS E1 (Climate change) under ESRS E1. Be conscious that year-on-year spikes can occur for isolated reasons, such as when Category 5 emissions increase following flood damage that sends large quantities of goods to landfill.
Category 6: Business travel
Category 6 covers emissions from employee travel for business purposes, in vehicles not owned by the company.
Data quality is the central challenge in this category. Spend-based business travel data fluctuates with ticket prices, not actual distance travelled, making year-on-year comparisons unreliable. Switching to activity-based data (distance and class of service, obtained from a travel agency) can stabilize the calculation.
Emission factor precision is also really important here: a generic business travel factor can be nearly five times higher than a hotel-stay-specific factor, so accurate sub-categorization should not be treated as a minor detail.
Category 7: Employee commuting
Category 7 captures the emissions from employees travelling between home and their regular workplace in vehicles not owned by the company.
Most companies collect this data via an annual staff survey and extrapolate across the full workforce. This category is evolving, given the rise of hybrid working, with home working energy consumption now optionally included.
Category 8: Upstream leased assets
Category 8 covers the operational emissions of assets a company leases from another party, where those emissions are not already in the company’s scope 1 or 2 inventory.
The boundary distinction is precise: leased assets belong in Category 8; purchased assets belong in Category 2. In practice, this category is most relevant when leased buildings or vehicles fall outside your operational boundary (for example, when you do not purchase the fuel or electricity directly), so the emissions need to be reported in scope 3 instead.
Downstream scope 3 categories (9-15)
The seven downstream categories cover what happens to your products and services after they leave your operations, from outbound logistics to the energy customers consume, and end-of-life disposal.
Category 9: Downstream transportation and distribution
Category 9 is the downstream counterpart to Category 4, covering the emissions from transporting a business’ finished products to end customers, via logistics networks it does not own. This includes downstream emissions from storage in warehouses, retail facilities and distribution centers. It is most material for manufacturers and distributors using third-party delivery networks. Companies that sell ex-works where customers collect directly, may find this category is not applicable.
Category 10: Processing of sold products
Category 10 applies only to companies that sell intermediate products, goods that another business transforms before they reach a consumer. The GHG Protocol defines it as “processing of intermediate products sold by downstream companies.” It does not apply to companies selling finished goods or services directly to end users.
Category 11: Use of sold products
Category 11 covers the direct use emissions consumed by customers using a business’ products over their lifetime.
For example, businesses can calculate Category 11 for Bluetooth headsets by estimating total units sold multiplied by expected lifespan and battery energy capacity per charge cycle.
Take note: the stakes of including this category for the first time can be significant: when a customer of Normative’s in the technology space added Category 11 following SBTi requirements, its reported footprint increased by approximately 20,000 tonnes of CO₂e compared with its previously published figure.
Category 12: End-of-life treatment of sold products
Category 12 covers how products you sell are eventually disposed of, be that landfill, recycling, incineration, or refurbishment, once they reach the end of their useful life.
It is consistently cited by practitioners as one of the hardest categories to calculate with precision. There are smart approaches a business can take though. For example, a business we work with noted that products have very long lifecycles in commercial environments and that internal systems cannot easily report the weight of materials sold. So the team used the weight of purchased goods as a proxy for the eventual weight of products requiring disposal.
Category 13: Downstream leased assets
Category 13 covers the operational emissions of assets that a business owns and leases out to other parties. It is the downstream inverse of Category 8.
There can be scope for crossovers between categories here though. For example, if a business leases refrigerated trailers to customers this would create reporting obligations under both Category 13 and Category 11, given the energy consumed by refrigeration units during customer operations. It’s worth noting that these boundary decisions depend on whether the asset is leased (Category 13) versus sold (Category 11).
Category 14: Franchises
Category 14 covers the scope 1 and scope 2 emissions of any franchise operations for which the franchisor carries reporting responsibility. It applies only to franchise-model businesses and is not applicable to most organizations.
Category 15: Investments
Category 15 covers the emissions associated with a company’s investments: equity, debt, and project finance. For financial institutions, it is typically the defining category. The Partnership for Carbon Accounting Financials (PCAF) provides the primary methodology for financed emissions calculation.
The scale of Category 15 can make all other scope 3 categories appear marginal. An investment platform we work with saw its total scope 3 decrease by 19% in one year, something that was driven entirely by a fall in Category 15 (investment emissions). In the same period, its operational scope 3 (travel, commuting, purchased goods) increased by 18%. Without separating Category 15 from the rest of the inventory, the underlying operational trend would have been invisible.
How to prioritize which scope 3 categories to measure
Not every category requires equal effort. The categories of scope 3 emissions that are most significant for your business depend on what you make, buy, and sell. The GHG Protocol recommends prioritizing categories that are likely to be significant. For instance, a business could focus on any category that may represent more than 5% of its total scope 3 emissions.
For most companies, Category 1 is the first and largest focus. Categories 6 and 7 are typically material for service businesses. Meanwhile, downstream categories, particularly 11 and 12, become significant for physical product manufacturers and are increasingly required by both CSRD and SBTi.
The SBTi requires near-term targets to cover at least 67% of scope 3 emissions. In practice, most companies can reach the 67% scope 3 coverage threshold by prioritizing Category 1 (Purchased goods and services) and a small number of other material scope 3 categories. However, to demonstrate compliance and build a credible baseline scope 3 inventory, a company still needs to screen, measure, or estimate emissions across all 15 scope 3 categories in the baseline year, even if some categories are later assessed as not relevant or not material.
Scope 3 categories under CSRD and SBTi
Two major frameworks now drive formal scope 3 reporting requirements.
Under CSRD (Corporate Sustainability Reporting Directive), in-scope companies must disclose scope 3 emissions in line with ESRS E1. This requires: a breakdown by significant category, transparent exclusion rationale for non-applicable categories, and a description of methodology and data sources used. While spend-based estimates are permitted, data quality is expected to improve year on year.
Under SBTi, companies must set scope 3 reduction targets when scope 3 represents 40% or more of total emissions, a threshold most companies exceed. Near-term targets must cover at least 67% of scope 3 emissions.
The common thread is that both frameworks require consistent methodology across reporting years. It’s worth noting that where a methodology change causes more than a 5% variance or more in your base year emissions, a restatement of the baseline year may be required by SBTi.
Note on GHG Protocol updates: The GHG Protocol and ISO announced a strategic partnership in September 2025 to harmonize carbon accounting standards globally. The 15 Scope 3 categories are expected to remain intact, but methodology guidance may be updated. Check ghgprotocol.org for the latest before publishing category-level disclosures.
Frequently asked questions about scope 3 categories
No, but you must report all categories that are material to your business and justify any exclusions transparently. The GHG Protocol does not require companies to report on categories that are clearly not relevant to their operations, but it does require that excluded categories are disclosed and the reasoning explained. Under CSRD, material categories must be reported with methodology details and data quality disclosures.
Category 1 (purchased goods and services) is the largest for the majority of companies, such as those in the Agricultural Commodities sector where it comprises 63% of total emissions. Category 15 (investments) dominates for financial institutions, while Category 11 (use of sold products) is typically the largest downstream category for consumer electronics and automotive manufacturers.
Start with a materiality screen using a spend-based estimate across all relevant categories. This produces a rough first footprint that reveals which categories are significant enough to warrant more granular measurement. The GHG Protocol recommends identifying categories that are likely to represent a meaningful share of total scope 3 based on your business model and industry. As a working rule: prioritize any category likely to exceed 5% of your total inventory.
Upstream categories (1-8) cover emissions from the supply chain feeding into your operations such as: extraction of raw materials, manufacturing of purchased goods, inbound logistics, and employee travel. Downstream categories (9-15) cover what happens after you sell: outbound logistics, customer use of your products, and eventual disposal. The distinction matters for target-setting: SBTi requires that near-term targets must collectively cover at least 67% of total reported and excluded scope 3 emissions, regardless of whether those emissions sit upstream or downstream.
Under CSRD’s ESRS E1 standard, companies must disclose all scope 3 categories that are significant to their business, not necessarily all 15, but every material category must be reported with methodology details and data quality disclosures. Non-applicable categories must be explicitly excluded with a written justification. The standard also requires disclosure of the percentage of scope 3 emissions covered by reduction targets, and year-on-year consistency of methodology. Indefinite reliance on spend-based estimates is not considered sufficient.
Ready to measure scope 3 with confidence?
Normative’s carbon accounting platform covers all 15 scope 3 categories to GHG Protocol standards, with a named, GHG Protocol-certified Climate Strategy Advisor on every account, and co-founder representation on the GHG Protocol Scope 3 Technical Working Group that writes the standard.
