Methodologies for Calculating Scope 3 Emissions

Regardless of whether an organization is in the crawl, walk, or run stage of its carbon accounting journey, calculation methods and emission factors play a central role in determining the accuracy and usefulness of Scope 3 emissions data.

What are calculation methodologies?

Calculation methodologies refer to the techniques used to convert business activity data—such as spend, distance, fuel use, or quantities purchased—into greenhouse gas (GHG) emissions. These methods are primarily defined by the GHG Protocol, with additional, category-specific guidance provided by initiatives such as the Partnership for Carbon Accounting Financials (PCAF) for financed emissions.

Why methodologies differ across Scope 3 categories

Scope 3 emissions are organized into 15 categories, each representing a different type of upstream or downstream activity. Because these activities vary significantly in how emissions are generated, there is no single calculation method that applies across all categories.

For example:

Employee Commuting (Scope 3: Category 7)

Common calculation approaches include:

• Distance-based methods, using travel distance and mode
• Spend-based (commodity) methods, using travel expenses and average emission factors

These approaches are often used early on because distance or spend data is commonly available.

Use of Sold Products (Scope 3: Category 11)

Calculation methods depend on how products generate emissions during use, such as:

• Fuels and feedstocks, for products that burn fuel
• Products that directly consume energy, such as appliances or electronics

These methods focus on how products are used over their lifetime rather than how they are manufactured.

Choosing between multiple methods within a category

Many Scope 3 categories allow for multiple acceptable calculation methods. For example, Purchased Goods and Services (Scope 3: Category 1) can be calculated using:

• Average data-based methods, relying on industry-average emission factors
• Hybrid methods, incorporating supplier-reported emissions where available
• Spend-based methods (commodity or industry), using financial data and emission factors

Each approach has tradeoffs:

• Spend-based methods are easier to implement but less precise
• Average data-based methods improve accuracy but still rely on generalized data
• Supplier-specific methods provide the highest accuracy but require deeper supplier engagement

When selecting a calculation methodology, organizations should consider:

• Data availability: What data do you already have access to?
• Materiality: Which categories contribute most to your footprint?
• Effort vs. accuracy: What level of precision is feasible today?

All of these methods are considered acceptable under the GHG Protocol when applied appropriately. The goal is not to choose the “perfect” method immediately, but to start with feasible approaches and improve data quality and granularity over time as Scope 3 programs mature.

Lesson takeaway

Scope 3 calculation methodologies are designed to be flexible. By selecting methods that align with available data and business priorities, and improving those methods over time, organizations can build Scope 3 inventories that are both practical and decision-useful.