Scottish Government Improvement Plan – Response to Environmental Standards Scotland Investigation – Climate Change Delivery Improvement Report

Scope 3 Emissions

Scope 3 emissions as defined in the Greenhouse Gas (GHG) Protocol^[4] are “all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.” Examples include purchased goods and services, business travel and investments.

The GHG Protocol^[5] sets out descriptions of each scope 3 category, and these can be found below.

Category 1, purchased goods and services including extraction, production, and transportation of goods and services purchased or acquired by the reporting company in the reporting year, not otherwise included in categories 1-8.

Category 2, capital goods including extraction, production, and transportation of capital goods purchased or acquired by the reporting company in the reporting year.

Category 3, fuel and energy related activities not in scopes 1 or 2, including extraction, production, and transportation of fuels and energy purchased or acquired by the reporting company in the reporting year, not already accounted for in scope 1 or scope 2, including:

a. Upstream emissions of purchased fuels (extraction, production, and transportation of fuels consumed by the reporting company)

b. Upstream emissions of purchased electricity (extraction, production, and transportation of fuels consumed in the generation of electricity, steam, heating, and cooling consumed by the reporting company)

c. Transmission and distribution (T&D) losses (generation of electricity, steam, heating and cooling that is consumed (i.e. lost) in a T&D system) – reported by end user

d. Generation of purchased electricity that is sold to end users (generation of electricity, steam, heating, and cooling that is purchased by the reporting company and sold to end users) – reported by utility company or energy retailer only

Category 4, upstream transportation and distribution which includes transportation and distribution of products purchased by the reporting company in the reporting year between a company’s tier 1 suppliers and its own operations in vehicles and facilities not owned or controlled by the reporting company.

Transportation and distribution services purchased by the reporting company in the reporting year, including inbound logistics, outbound logistics (e.g., of sold products), and transportation and distribution between a company’s own facilities in vehicles and facilities not owned or controlled by the reporting company.

Category 5, waste generated in operations including disposal and treatment of waste generated in the reporting company’s operations in the reporting year, in facilities not owned or controlled by the reporting company.

Category 6, business travel, including overnight stays including transportation of employees for business-related activities during the reporting year in vehicles not owned or operated by the reporting company. Companies may optionally include emissions from business travellers staying in hotels, where relevant.

Category 7, employee commuting including homeworking, which should include transportation of employees between their homes and their worksites during the reporting year in vehicles not owned or operated by the reporting company. Companies may include emissions from teleworking (i.e., employees working remotely) in this category where relevant.

Category 8, upstream leased assets including operation of assets leased by the reporting company (lessee) in the reporting year and not included in scope 1 and scope 2 – reported by lessee.

Category 9, downstream distribution and transportation including transportation and distribution of products sold by the reporting company in the reporting year between the reporting company’s operations and the end consumer, if not paid for by the reporting company, including retail and storage in vehicles and facilities not owned or controlled by the reporting company.

Category 10, processing of sold products including processing of intermediate products sold in the reporting year by downstream companies, e.g. manufacturers.

Category 11, use of sold products includes end use of goods and services sold by the reporting company in the reporting year.

Category 12, end-of-life treatment of sold products including waste disposal and treatment of products sold by the reporting company, in the reporting year, at the end of their life.

Category 13, downstream leased assets including operation of assets owned by the reporting company (lessor) and leased to other entities in the reporting year, not included in scope 1 and scope 2 – reported by lessor.

Category 14, franchises including operation of franchises in the reporting year, not included in scope 1 and scope 2 – reported by franchisor.

Category 15, investments including operation of investments (including equity and debt investments and project finance) in the reporting year, not included in scope 1 or scope 2.