Upstream and Downstream Sources

Once an organization has determined what data to collect, the next step is to begin gathering activity or emissions data for relevant Scope 3 categories directly from suppliers and other value-chain partners. Because Scope 3 emissions occur outside an organization’s direct operations, effective data collection depends on identifying, prioritizing, and engaging the right upstream and downstream stakeholders.

Identifying upstream and downstream partners

Upstream partners are typically those involved in the production and delivery of goods and services the organization purchases. These may include:

• Contract manufacturers
• Materials and parts suppliers
• Capital equipment suppliers
• Fuel and energy suppliers
• Third-party logistics providers

By clearly communicating climate goals, reporting expectations, and how the data will be used, organizations can collaborate with upstream partners to collect both primary data (supplier-specific or activity-based) and secondary data (industry averages or proxy data) for Scope 3 emissions.

Downstream partners are those involved after a product or service leaves the organization. These may include:

• Waste management providers
• Transportation and distribution partners
• Customers
• Tenants or end users

For organizations with material downstream emissions—such as emissions from product use, end-of-life treatment, or distribution—transparent communication and engagement can help encourage data sharing and support emissions-reduction efforts across the value chain.

Using supplier tiers to prioritize engagement

Because supply chains can span hundreds or thousands of organizations, most companies take a tiered approach to Scope 3 data collection, focusing effort where influence and data availability are highest.

Tier 1 suppliers

Tier 1 suppliers are companies with which the organization has a direct commercial relationship. These suppliers typically provide the greatest leverage for data requests, as expectations can be embedded into procurement processes, contracts, or supplier programs. As a result, Tier 1 suppliers are usually the starting point for Scope 3 data collection.

Tier 2 suppliers

Tier 2 suppliers are suppliers to Tier 1 companies. Direct engagement with Tier 2 suppliers is often more challenging, as there is no contractual relationship. Organizations typically improve visibility into Tier 2 emissions by:

• Asking Tier 1 suppliers to share upstream data
• Encouraging Tier 1 suppliers to engage their own suppliers
• Using secondary data to estimate emissions where supplier-specific data is unavailable

Tier 3 suppliers

Tier 3 suppliers are further upstream in the value chain and supply goods or services to Tier 2 companies. For most organizations, direct engagement with Tier 3 suppliers is uncommon due to limited visibility and influence.

Instead, organizations typically account for Tier 3 emissions by:

• Relying on secondary data and industry averages
• Improving estimates as better data becomes available upstream
• Supporting broader supplier programs that cascade expectations through the value chain

This approach allows organizations to include Tier 3 emissions in their inventories without requiring direct data requests that may not be feasible.

Example: Applying a Tiered Approach in Consumer Electronics

Agora manufactures consumer electronics and works with hundreds of suppliers across its value chain. To begin collecting Scope 3 data, Agora first focuses on its Tier 1 suppliers, including component manufacturers and assembly partners, using a standardized survey to request emissions data, methodologies, and assumptions.

For Tier 1 suppliers that cannot yet provide emissions data, Agora uses secondary data to estimate emissions while communicating that supplier-specific data will be expected in future reporting cycles.

As its program matures, Agora asks its largest Tier 1 suppliers to engage their Tier 2 suppliers, gradually improving upstream visibility. For Tier 3 suppliers—such as raw material producers—Agora relies on secondary data and industry-average emission factors, recognizing that direct engagement is not practical at this stage.

This phased, tiered approach allows Agora to improve Scope 3 data quality over time without overwhelming suppliers or internal teams.

Example: Applying a Tiered Approach in the Wooden Furniture Industry

A company that designs and sells wooden furniture sources finished products from contract manufacturers. To collect Scope 3 data, the company applies a tiered approach to supplier engagement.

• Tier 1 suppliers include furniture manufacturers that assemble and finish tables, chairs, and cabinets. The company engages these suppliers directly, requesting data on energy use, manufacturing emissions, and material inputs used to produce finished furniture.
• Tier 2 suppliers include sawmills and wood processing facilities that supply lumber, plywood, or veneers to the furniture manufacturers. While the company does not have a direct relationship with these suppliers, it works with Tier 1 partners to encourage upstream data sharing or uses secondary data to estimate emissions associated with processed wood products.
• Tier 3 suppliers include forestry operations and raw material producers that harvest timber. Because direct engagement at this level is often impractical, the company relies on secondary data and industry-average emission factors to account for emissions associated with timber harvesting and land-use activities.

By starting with Tier 1 suppliers and progressively improving visibility upstream, the company is able to include emissions from the full value chain in its Scope 3 inventory while improving data quality over time.

Continuous improvement over time

Not all suppliers will have emissions data available at the outset, and that is expected. Where supplier-specific data is unavailable, organizations should rely on secondary data while encouraging suppliers to develop GHG inventories over time. As supplier maturity increases, organizations can progressively replace estimates with higher-quality data.

By taking a tiered, pragmatic approach to supplier engagement, starting with Tier 1 and extending influence upstream, organizations can improve Scope 3 data quality in a way that is scalable, practical, and aligned with long-term climate goals.

In some cases, organizations may also seek information related to Tier 2 suppliers, which are suppliers to Tier 1 companies. Where supplier-specific data is unavailable or incomplete, organizations should use secondary data to estimate emissions. Suppliers that do not yet have emissions data can be encouraged to develop GHG inventories over time, supporting continuous improvement in Scope 3 data quality.