Map your business model against the 15 GHG Protocol categories and ask 2 questions per category: does this activity exist in your business, and are the emissions likely to be significant? A screening assessment with spend data and average emission factors then ranks the categories, so you know where to collect better data first.
Scope 3 emissions are often the largest slice of a company’s carbon footprint, yet they’re also the trickiest to pin down. Unlike scope 1 and 2 emissions, which come directly from your own operations or purchased energy, scope 3 covers everything upstream and downstream: your suppliers, your customers, your products at end of life, and a lot in between. The good news is that the GHG Protocol has organized all of this into 15 defined scope 3 categories, which gives you a clear starting point. The less straightforward news? Not all 15 categories apply to every business, and figuring out which ones are relevant to yours takes a bit of methodical thinking.
This guide walks you through exactly that process, from understanding what the 15 scope 3 categories actually cover, to identifying which ones matter for your specific business, to making sure your approach aligns with the reporting frameworks you’re working toward.
The 15 scope 3 categories at a glance
The GHG Protocol divides scope 3 emissions into two groups: upstream (categories 1 through 8) and downstream (categories 9 through 15). Upstream categories cover activities related to your supply chain and business operations before your product or service reaches you. Downstream categories cover what happens after your product or service leaves your hands.
Here’s a quick overview of all 15:
- Category 1: Purchased goods and services — Emissions from producing everything you buy, from raw materials to software subscriptions.
- Category 2: Capital goods — Emissions from manufacturing the equipment, machinery, or buildings your company acquires.
- Category 3: Fuel and energy-related activities — Emissions not already counted in scope 1 or 2, such as the extraction and transportation of fuels you purchase.
- Category 4: Upstream transportation and distribution — Emissions from moving goods to your facilities, including third-party logistics.
- Category 5: Waste generated in operations — Emissions from disposing of waste produced at your sites.
- Category 6: Business travel — Emissions from flights, trains, hotels, and rental cars used by employees for work.
- Category 7: Employee commuting — Emissions from employees traveling between home and work.
- Category 8: Upstream leased assets — Emissions from assets you lease but don’t own, if not already in scope 1 or 2.
- Category 9: Downstream transportation and distribution — Emissions from moving your products to customers or retailers.
- Category 10: Processing of sold products — Emissions from the further processing of your products by third parties before they reach end users.
- Category 11: Use of sold products — Emissions generated when customers actually use what you sell, especially relevant for energy-consuming products.
- Category 12: End-of-life treatment of sold products — Emissions from disposing of your products after customers are done with them.
- Category 13: Downstream leased assets — Emissions from assets you own but lease out to others.
- Category 14: Franchises — Emissions from franchisee operations, relevant if you operate a franchise model.
- Category 15: Investments — Emissions associated with the financial investments your company holds.
Taken together, these 15 categories form a comprehensive map of a company’s indirect emissions. Some of them, like business travel or purchased goods, will almost always show up on a company’s radar. Others, like franchises or downstream leased assets, only apply in specific business models. The key insight is that scope 3 isn’t a monolith. It’s a menu, and your job is to figure out which items are actually on your plate.
How to identify which categories are relevant to your business
Relevance comes down to two things: whether a category actually applies to your business activities, and whether the emissions involved are likely to be significant. The GHG Protocol itself recommends assessing both dimensions when deciding which categories to include in your scope 3 inventory.
A practical way to approach this is to map your business model against each category and ask two simple questions: does this activity exist in our operations, and if so, is it likely to be material? A software company, for example, probably has minimal exposure to category 10 (processing of sold products), but category 11 (use of sold products) could be very significant if its software runs on energy-intensive cloud infrastructure. A manufacturer, on the other hand, might find that categories 1, 4, and 12 dominate its footprint.
It’s also worth thinking about where your company sits in its value chain. Companies with long, complex supply chains tend to find that upstream categories, particularly category 1, represent the bulk of their emissions. Service businesses often find the picture shifts toward business travel, employee commuting, and purchased goods. Neither pattern is universal, which is exactly why a tailored assessment matters more than a one-size-fits-all approach.
Conducting a scope 3 screening assessment
A screening assessment is essentially a first pass across all 15 categories to establish which ones are worth investigating further. It doesn’t need to be perfectly precise at this stage. The goal is to build a rough picture of where your emissions are concentrated, so you can prioritize your data collection efforts.
The process typically involves three steps. First, gather basic spend and activity data across your business. Financial spend data is often used as a proxy for emissions at this stage, since it’s more readily available than primary supplier data. Second, apply emission factors (publicly available databases provide these) to get rough estimates for each category. Third, rank the categories by estimated emissions magnitude and flag any that are clearly not applicable to your business model.
One important nuance: a category can be “relevant” even if you don’t yet have precise data for it. The GHG Protocol actually requires companies to include all relevant categories in their scope 3 inventory, even if the figures are estimated. Omitting a category entirely because data is hard to collect isn’t considered good practice. This is where working with a scope 3 emissions specialist can make a real difference, since they can help you identify appropriate estimation methodologies for data-sparse categories and ensure your inventory holds up to scrutiny.
Common scope 3 blind spots by industry
Even companies that take scope 3 seriously can miss categories that turn out to be surprisingly significant. A few patterns come up repeatedly across industries.
In financial services, category 15 (investments) is often underestimated or overlooked entirely. Financed emissions, meaning the emissions associated with loans, bonds, and equity investments, can dwarf a bank’s or asset manager’s operational footprint many times over. Yet because the data is complex to gather and the methodology is still maturing, many financial institutions are only beginning to address it seriously in 2026.
In the food and beverage sector, category 1 (purchased goods and services) is almost always the dominant category, but companies sometimes underinvest in supplier engagement because the data collection feels overwhelming. Agricultural supply chains in particular carry significant emissions that don’t always get the attention they deserve.
In retail and consumer goods, category 11 (use of sold products) and category 12 (end-of-life treatment) are frequent blind spots. If you’re selling products that consume energy during use, or that end up in landfill, those downstream emissions can be substantial and are increasingly scrutinized under frameworks like CSRD.
Technology companies often underestimate category 3 (fuel and energy-related activities) and category 11, particularly as cloud computing and data center energy consumption come under greater focus. The indirect emissions from powering digital infrastructure are real, even if they don’t show up in your electricity bill.
The pattern across all of these examples is the same: blind spots tend to occur where data is hard to collect, where the connection to your own operations feels indirect, or where industry norms haven’t yet caught up with best practice. Recognizing where your sector’s blind spots typically lie is a good way to stress-test your own scope 3 inventory before you finalize it.
Aligning scope 3 scope with reporting frameworks
Once you’ve identified your relevant categories, it’s worth thinking about how your scope 3 approach fits with the reporting frameworks you’re working toward. Different frameworks have different requirements, and getting your category selection right from the start saves a lot of rework later.
Under CSRD, companies subject to the directive are required to report on scope 3 emissions as part of their double materiality assessment. The categories you include need to reflect what’s material to your business, and your methodology needs to be documented and auditable. CSRD reporting doesn’t require you to include every single category, but it does require you to justify which ones you’ve included or excluded.
If you’re working toward SBTi (Science Based Targets initiative) targets, the requirements around scope 3 are specific. SBTi requires companies to set scope 3 targets if scope 3 emissions represent 40% or more of total scope 1, 2, and 3 emissions combined. For most companies, this threshold is easily met, which means getting your category selection right is directly tied to how ambitious your targets need to be.
CDP disclosure also asks companies to report on scope 3 categories, and the quality of that disclosure is increasingly scrutinized by investors and customers. CDP’s questionnaire asks you to indicate which categories are relevant, which you’ve calculated, and what methodology you’ve used, so a well-structured category assessment feeds directly into a stronger CDP response.
The practical takeaway is that your scope 3 category selection isn’t just a technical exercise. It shapes your reporting obligations, your target-setting, and how credible your climate disclosures look to external stakeholders. Getting it right the first time is worth the investment.
Ready to tackle your scope 3 inventory?
Scoping your scope 3 categories is one of those tasks that sounds straightforward until you’re actually in it. The 15 categories are well-defined, but applying them to your specific business model, value chain, and reporting requirements takes real expertise. That’s where having the right specialist in your corner makes a genuine difference.
At Dazzle, we match organizations with pre-screened scope 3 emissions specialists and sustainability reporting experts who’ve done this work across a wide range of industries. Whether you need someone to lead a full screening assessment or support your team on a specific category, we can connect you with the right person within 48 hours. There’s no lengthy procurement process or agency overhead, just flexible access to expert help when you need it. If you’re ready to get started, reach out to our team and we’ll find the right match for your project.
Building your first Scope 3 baseline?
Scope 3 in 100 Days is a free checklist in 4 phases, from spend data to a baseline you can defend. Reviewed by an independent Scope 3 expert.
