Overview
As the Greenhouse Gas (GHG) Protocol continues its multi-year standards update process, the proposed revisions to the GHG Protocol Scope 3 Standard represent one of the most consequential shifts in how companies measure and manage upstream and downstream GHG emissions (“value chain emissions”). While recent updates to the Scope 2 Guidance have garnered attention for refining indirect energy emissions accounting, the Scope 3 Standard proposals signal broader structural changes that could materially affect corporate reporting practices and strategic decarbonization efforts.
What are Scope 3 Emissions?
Scope 3 emissions account for the largest share of most companies’ total GHG emissions, encompassing upstream and downstream activities broken down into 15 categories. Scope 3 captures the cradle-to-gate emissions of purchased goods and services, emissions resulting from the use of sold products, upstream and downstream transportation, and many more.
Because scope 3 emissions often represent more than 90% of a company’s total carbon footprint, the accuracy and transparency of this reporting category are critical for credible climate action and stakeholder confidence. Draft proposals submitted by survey participants for the update to the GHG Protocol’s Scope 3 Standard focus on improving the quality, comparability, and usability of scope 3 emissions data.
Key Proposed Changes
Three key themes emerging from the proposed updates to the Scope 3 Standard indicate a clear shift toward improving consistency, data quality, and decision-usefulness in scope 3 emissions reporting. Notable proposed changes include:
1. Clearer boundary setting and category definitions
- Enhanced guidance on how organizations identify, classify, and define scope 3 emissions sources across the 15 categories.
- More explicit minimum boundary requirements to improve comparability of reported GHG emissions across companies and sectors.
- Greater alignment between the Scope 3 Standard and other evolving GHG Protocol standards to reduce fragmentation in corporate GHG emissions inventories.
2. Reduced alliance on spend-based methodologies
- Proposed de-emphasis of spend-based calculation methods in favor of primary and activity-based data where feasible.
- Increased expectations for supplier-specific emissions factors and operational data that improves the accuracy of scope 3 emissions estimates.
- Recognition that improving scope 3 emissions data quality is a progressive process, with flexibility for organizations at different stages of maturity.
3. Clarification of complex emissions topics
- Improved guidance on the treatment of biogenic emissions (emissions that come from natural sources, like biomass), land-use-related emissions, and removals within scope 3 emissions accounting.
- Clearer direction on how market-based electricity data interacts with scope 3 emissions, particularly for upstream purchased energy.
- Alignment with forthcoming guidance on land sector accounting and removals to ensure consistent treatment of these emissions sources across GHG emissions inventories.
A full list of the GHG Protocol’s proposed changes to the Scope 3 Standard can be found here.
What Does this Mean for Corporate Scope 3 Carbon Accounting?
For companies working to build robust GHG emissions inventories and credible decarbonization pathways, these Scope 3 Standard revisions will be among the most important developments of the next few years. Entities should monitor the public consultation process closely and begin evaluating their current scope 3 emissions methodologies to identify areas that may require adaptation once final guidance is released.
About Full Scope Insights and Our GHG Emissions Accounting Services
Considering reporting scope 3 emissions or looking for guidance to improve your current reporting practices? Connect with our team about building a GHG Protocol-aligned scope 3 strategy that improves data quality, supplier engagement, and investor confidence. Let’s talk.
FSI Consulting delivers GHG Protocol-aligned scope 1, 2, and 3 emissions consulting, the kind that fuels real growth, ensures robust compliance, and builds enterprise value, without breaking the bank. We regularly work with companies in the middle market (public and private-equity owned) to advance GHG reporting, improve disclosure integrity, and align with regulatory and reporting standards such as California SB-253, CSRD, SASB, GRI, EcoVadis and others.
Our team brings the technical expertise, industry knowledge, and practical experience to guide you through every phase of your emissions journey, from initial boundary setting through data collection infrastructure, supplier engagement, verification readiness, and strategic reduction planning.
Ethan Krohn,
Manager, Sustainability & GHG Emissions
Full Scope Insights