Streamlined Energy and Carbon Reporting (SECR) provides organisations with a standardised framework for reporting carbon emissions. Scope 1 and Scope 2 emissions are now well understood by most businesses and, aside from a few grey areas, are generally straightforward to calculate and disclose.
Scope 3 emissions, however, are a different story. Methodologies are less consistent, data can be hard to come by, and guidance often stops short of telling organisations how to do it in practice. This blog explores what Scope 3 emissions are, why they matter, and how organisations can develop meaningful and practical Scope 3 reporting under SECR.
What are Scope 3 emissions?
Scope 3 emissions are indirect emissions that occur across an organisation’s value chain. There are 15 sub-categories, which can broadly be grouped into two areas:
- Emissions from the products and services an organisation uses
For example, the CO₂ emitted during the manufacture of materials or goods that your organisation purchases. - Emissions from the products and services an organisation provides
For instance, if you lease out property, the emissions generated by those buildings fall into your Scope 3 footprint.
It’s worth noting that emissions reported as Scope 1 and Scope 2 by your suppliers may well be categorised as Scope 3 emissions for your own organisation.
For many businesses, Scope 3 emissions represent the largest proportion of their overall carbon footprint. That is precisely why evaluating them, and developing a plan to address them, is so important.
How to estimate Scope 3 emissions
Unlike Scope 1 and Scope 2 emissions, many Scope 3 categories do not have standard conversion factors. While there is extensive guidance available, it often lacks the practical detail needed to apply it consistently. The key is to focus on primary data that is repeatable, transparent, and meaningful.
One common request is to assess emissions across the supply chain. Our preferred approach is to engage directly with suppliers by surveying them and asking them to report the emissions that are attributable to your organisation. This has two major benefits:
- It improves data quality over time.
- It signals to suppliers that emissions performance matters to you as a client, encouraging them to take action to reduce their own footprint.
An alternative approach is to estimate emissions by multiplying spend with each supplier by an industry-specific conversion factor. While this method is quicker and easier to implement, it does not engage the supply chain and can be highly inaccurate.
Until clear, sector-wide standards for Scope 3 calculation are established, using data that is consistent and defensible is the best available option. Whatever methodology is chosen, Scope 3 estimates should always be supported by a clear audit trail that explains how figures have been derived.
What to do with your Scope 3 emissions data
Collecting Scope 3 emissions data is only the starting point. The real value comes from analysing it at a granular level. With sufficient detail, organisations can benchmark performance, identify hotspots, and focus effort where it will have the greatest impact.
For example:
- Sub-contractors: Reviewing emissions intensity (such as CO₂ per £ of contract value) can highlight poor-performing suppliers. Are higher emissions driven by inefficient fuel use, and does this also increase your costs? These insights create opportunities for constructive engagement and improvement.
- Leased assets: Identifying which properties perform worst can help manage compliance risks, improve asset value, and reduce the likelihood of tenant dissatisfaction or vacancy.
Next steps
Scope 3 emissions may be complex, but they also offer some of the biggest opportunities for carbon reduction and long-term risk management.
If you would like support with SECR reporting, including Scope 3 emissions, please get in touch at [email protected] or via our contact page.