Based on the GHG Protocol Scope 3 Calculation Guidance
Scope 3 greenhouse gas (GHG) emissions refer to indirect emissions that occur as a result of an organization's activities but are not directly owned or controlled by that organization. These emissions are associated with the entire value chain of a product or service, including activities such as the extraction and production of raw materials, transportation, use of products, and disposal. Here is a summary of the 15 categories of Scope 3 GHG emissions:
Category 1: Purchased Goods and Services: These emissions are generated from the production, transport, and disposal of goods and services purchased by the organization. This includes raw materials, components, and finished products. Example: Paint, cleaning supplies, paper, pens, feedstock
Category 2: Capital Goods: Emissions in this category are a result of the production, transport, and disposal of capital goods, such as buildings, machinery, and infrastructure, that are purchased or leased by the organization. Examples: Equipment, machinery, buildings, facilities, and vehicles.
Category 3: Fuel- and Energy-Related Activities: These emissions arise from activities not included in Scope 1 or Scope 2 emissions, such as the extraction, production, and transportation of fuels and energy used by the organization. Examples: Upstream emissions from purchased fuels, electricity, T&D losses, and sold electricity not accounted for in Scope 1 and 2.
Category 4: Upstream Transportation and Distribution: Emissions in this category are associated with the transportation and distribution of products and materials from suppliers to the organization, including shipping, logistics, and freight. Example: Products purchased by the reporting company, between a company’s tier 1 suppliers and its own operations (in vehicles and facilities not owned or controlled by the reporting company).
Category 5: Waste Generated in Operations: Category 5 emissions result from the waste generated during the organization's operations, including solid waste, wastewater, and hazardous waste. Examples: Disposal in a landfill, disposal in a landfill with landfill-gas-to-energy, recovery for recycling, incineration, composting, waste-to-energy (WTE) or energy-from-waste (EfW), and wastewater treatment.
Category 6: Business Travel: Business travel emissions are produced by employees' business travel, including air travel, road transport, taxi, and rail travel. Examples: Air travel, rail travel, bus travel, automobile travel (e.g., business travel in rental cars or employee-owned vehicles other than employee commuting to and from work), and other modes of travel. Companies may optionally include emissions from business travellers staying in hotels.
Category 7: Employee Commuting: These emissions arise from employees' commuting to and from work, whether by car, public transportation, or other means. Additionally, companies may include emissions from teleworking (i.e., employees working remotely) in this category. Example: Automobile travel, bus travel, rail travel, air travel, and other modes of transportation (e.g., subway, bicycling, walking).
Category 8: Upstream Leased Assets: Emissions in this category are associated with the production, transport, and disposal of assets that the organization leases, such as vehicles or equipment. Example: Transportation and distribution in vehicles and facilities leased by and operated by the reporting company (and not already included in scope 1 or scope 2)
Category 9: Downstream Transportation and Distribution: These emissions occur due to the transportation, storage, and distribution of products from the organization to end-users or customers of sold products in vehicles/facilities not owned by the reporting company. Example: Warehouses and distribution centres, retail facilities, air transport, rail transport, road transport, and marine transport.
Category 10: Processing of Sold Products: Category 10 emissions are generated from the processing of products sold by third parties (i.e. manufacturers) subsequent to sale by the reporting company. Example: Sugar processed into candy.
Category 11: Use of Sold Products: These emissions are a result from the use of products sold by the organization by end-users, including energy consumed during operation or maintenance. Companies are required to report direct use-phase emissions, but indirect use-phase emissions are optional to report on. Direct use-phase example: Products that directly consume energy during use (engines, motors, lighting, data centres). Indirect use-phase example: Products that indirectly consumer energy during use (apparel, food, pots and pans).
Category 12: End-of-Life Treatment of Sold Products: Emissions in this category arise from the disposal or treatment of products sold by the organization once they reach the end of their useful life, including recycling, landfilling, or incineration. Example: End-of-life treatment methods (e.g., landfilling, incineration, and recycling) are described in category 5 and apply to both category 5 and category 12. Calculating emissions from category 12 requires assumptions about the end-of-life treatment methods used by consumers.
Category 13: Leased Assets: This category includes emissions from the operation of assets that are owned by the reporting company (acting as lessor) and leased to other entities in the reporting year that are not already included in scope 1 or scope 2. The GHGP acknowledges that it may not be valuable to differentiate assets that are leased (category 13) and sold (category 11) to customers. In this case, the GHGP recommends reporting these emissions under category 11 instead of category 13 to avoid double-counting. Example: A company that leases vehicles may need to request fuel or mileage data from lessees in order to calculate emissions.
Category 14: Franchises: Category 14 includes emissions from the operation of franchises not included in scope 1 or scope 2. A franchise is a business operating under a licence to sell or distribute another company’s goods or services within a certain location. This category is applicable to franchisors (i.e., companies that grant licences to other entities to sell or distribute its goods or services in return for payments, such as royalties for the use of trademarks and other services). Example: Franchisors should account for emissions that occur from the operation of franchises (i.e., the scope 1 and scope 2 emissions of franchisees) in this category.
Category 15: Investments: This category includes scope 3 emissions associated with the reporting company’s investments in the reporting year, not already included in scope 1 or scope 2. This category is applicable to investors (i.e., companies that make an investment with the objective of making a profit) and companies that provide financial services. It also applies to investors that are not profit driven (e.g. development banks). For purposes of GHG accounting, this standard divides financial investments into four types: Equity investments, Debt investments, Project finance, Managed investments and client services. For more information on this category, please refer to the GHG Protocol Scope 3 Calculation Guidance.
It's important to note that the relevance and significance of each category of Scope 3 emissions may vary depending on the industry, organization, and specific context depending on operational activities and value chain.