Master Scope 3 Emissions: A Guide for the Public Sector
Scope 3 emissions represent the majority of a public institution’s carbon footprint, yet they remain the most complex and under-reported category in public sector carbon accounting. This guide examines what they are, why measurement is necessary, and the principal approaches to quantification and reduction.
Why Scope 3 Emissions Matter for the Public Sector
Emissions reporting in the public sector typically begins with Scope 1 and 2 emissions, which are relatively well-defined. For most government organisations, these encompass:
- Fuel used for heating offices (Scope 1)
- Fuel used in owned or controlled vehicles (Scope 1)
- Electricity consumed in buildings (Scope 2)
These categories, however, represent only a fraction of an organisation’s total climate impact. Scope 3 emissions (encompassing all other indirect emissions across the value chain) are considerably more complex and typically far larger in scale. For local governments in the UK, Scope 3 represents the majority of total emissions, usually accounting for 70-80% of their total footprint.
For most UK local authorities, Scope 3 emissions account for 70-80% of their total carbon footprint. Nevertheless, they remain the most complex and under-reported category.
What Are Scope 3 Emissions?
Scope 3 emissions are best understood as “indirect emissions that occur in an organisation’s value chain”, outside of its direct operations. These typically originate from third parties such as suppliers, contractors, and service providers.
For example, when a local authority commissions a construction project, the emissions generated by the construction company are not under the council’s direct control. However, because the project was initiated and funded by the authority, these emissions are a direct consequence of its operations, and therefore fall under Scope 3.
To standardise reporting, the Greenhouse Gas Protocol defines 15 categories of Scope 3 emissions, applicable across both private and public sectors.
Scope 3 Measurement: Challenges and First Steps
A primary challenge in Scope 3 reporting is the absence of reliable, accessible data. Therefore, before any emissions calculation can begin, organisations must undertake a critical preliminary step: mapping their value chain.
This requires identifying where emissions are likely to occur across both upstream and downstream activities, determining which of the 15 Scope 3 categories are relevant, and establishing who holds the data needed for each category.
Effective value chain mapping serves to define the boundaries of an organisation’s Scope 3 footprint, clarify data sources, and identify the most appropriate measurement methodologies. Although the process involves subjective judgements and frequently incomplete data, establishing a clear boundary is essential for credible measurement and for developing targeted reduction strategies.
Supply Chain Emissions: The Backbone of Scope 3
Of the 15 GHG Protocol categories, two consistently dominate: 1) Purchased Goods and Services, and 2) Capital Goods. Despite covering a narrow scope, these two categories frequently account for the majority of an organisation’s total emissions, not solely its Scope 3 footprint.
For local authorities specifically, capital goods (particularly construction services) are disproportionately significant contributors, given that public bodies regularly procure building and infrastructure projects that create long-term assets with substantial carbon embodied in their materials and construction operations.
The significance of supply chain emissions lies in their coverage of the cradle-to-gate lifecycle of every product or service procured, from raw material extraction through to manufacturing and delivery. These embedded emissions require measurement and active management, notwithstanding their location outside an organisation’s direct operational control.
How Spend-Based Carbon Accounting Works
Spend-based emissions rates are derived from Environmentally Extended Multi-Regional Input-Output (EE-MRIO) tables. These are complex databases that track economic transactions between sectors, measure environmental impacts across those sectors, and aggregate this into average emissions per £ spent by sector and country.
Organisations are not required to construct these tables independently. Leading providers such as Exiobase (used by City Science) have pre-calculated these rates. Free MRIO datasets are also publicly available for those wishing to undertake their own calculations.
Classifying Spend Data for Emissions Accounting
Calculating spend-based supply chain emissions requires matching transactions in a procurement ledger to an emissions factor database (a process known as classification), and then multiplying the spend by the relevant factor. Several key principles apply:
- Use all available fields (supplier name, account code, transaction description) to understand the nature of each purchase
- Align each spend item to the most appropriate classification in the emissions factor database
- When specific data is missing, use more general classifications (e.g. “manufacturing”) rather than inferring specifics
- Emissions factor databases use hierarchies (from broad to granular); apply the level of specificity that the available data supports
Important: Not all spend should be included. Exclude salaries, rents, utilities, and depreciation where emissions are either counted elsewhere or do not apply. Exclude also any items where more accurate primary data (e.g. kWh for electricity) is already in use, to avoid double counting.
The case for measurement
Why Local Authorities Need to Measure Scope 3
A common question concerns whether Scope 3 measurement is necessary, given that these emissions originate outside an organisation’s direct control and are, to some extent, already counted elsewhere. There are four substantive reasons why measurement remains essential.
Key categories for the public sector
Understanding Scope 3 Categories
Of the 15 GHG Protocol Scope 3 categories, a small number make up the vast majority of most local authorities’ total footprint. Three deserve particular attention.
As with private sector organisations, procurement plays a major role. In the public sector, however, capital goods (particularly construction services) are disproportionately large contributors. Public bodies regularly procure building and infrastructure projects, which fall under capital goods because they create long-term assets owned by the authority.
These capital investments carry significant embedded emissions, often constituting the bulk of Scope 3. In a number of cases, they represent the majority of total organisational emissions.
An often overlooked but highly significant Scope 3 category for local government. These are buildings the council owns but leases out under financial lease agreements. Because the council does not directly control energy use or decarbonisation investments in these buildings, the associated emissions fall under Scope 3 rather than Scopes 1 or 2.
For urban councils with large property portfolios, downstream leased assets can account for over 50% of total emissions, making this a critical, if frequently misunderstood, category in public sector reporting.
Councils frequently assume that emissions from the collection and disposal of all building waste fall under Scope 3. Under the GHG Protocol, however, only waste generated from employee operations (typically limited to office waste) is included in Scope 3.
This distinction is essential for accurate reporting. Emissions from wider waste services are not included within the GHG Protocol framework, meaning that Scope 3 emissions attributable to waste are generally quite limited in the public sector context.
Full category reference
| Category | Description | Relevance |
|---|---|---|
| Purchased Goods & Services | Emissions from everything bought, including office supplies and contracted services | Very High |
| Capital Goods | Long-term assets such as buildings, IT equipment, and infrastructure | Very High |
| Fuel- and Energy-Related Activities | Emissions from extraction and transport of fuel used in Scopes 1 & 2 | Moderate |
| Waste Generated in Operations | Emissions from third-party processing of operational waste (office waste only) | Low |
| Employee Commuting & Teleworking | Staff travel to and from work, and additional energy emissions from home working | Low-Moderate |
| Business Travel | Emissions from work-related travel by employees | Low |
| Upstream Transportation | Emissions from the delivery of procured goods and services | Low-Moderate |
| Downstream Leased Assets | Emissions from council-owned buildings leased to tenants under financial agreements | Very High |
Measurement methodology
Measuring Supply Chain Emissions: Data Types
Four data types are used to measure Scope 3 supply chain emissions. These are presented below in descending order of accuracy.
From measurement to action
Reducing Scope 3: Engaging Your Supply Chain
Having established a Scope 3 baseline, the focus shifts to reduction. Because these emissions lie outside an organisation’s direct operational control, meaningful reduction requires deliberate, strategic engagement with suppliers, structured across three levels of maturity.
Basic Engagement
Establish the foundation for supply chain decarbonisation through structured outreach to strategic suppliers and the systematic collection of initial sustainability data.
- Identify high-emission and high-spend suppliers
- Gather sustainability data via structured assessments
- Benchmark supplier maturity against a carbon model
- Signal the direction of travel in procurement policy
Data Collection
Transition from industry-average estimates to supplier-specific data, improving Scope 3 measurement accuracy and enabling more targeted emissions interventions.
- Request supplier-specific emissions data and rates
- Replace spend-based estimates where better data exists
- Build a dynamic supplier emissions register
- Identify where performance beats or lags industry averages
Collaboration
Develop long-term strategic partnerships with key suppliers to jointly reduce emissions, with corresponding reductions in the council’s Scope 3 footprint.
- Support suppliers in measuring and reducing emissions
- Offer training, tools, and technical assistance
- Set expectations through procurement policy
- Provide incentives and recognition for progress
Spend-based methods use industry averages. If a supplier performs better than the average, the benefit will not be reflected in an organisation’s footprint unless actual supplier emissions data is obtained. Supplier engagement is therefore not only an emissions reduction strategy; it is also a route to more accurate reporting.
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