Scope 3.1: Purchased goods and services

Learn how the Greenhouse Gas (GHG) Protocol defines Scope 3.1 emissions, how the protocol recommends calculating them and how they are actually calculated in Climate Reporting

How are Scope 3.1 emissions defined in the GHG Protocol?

Scope 3.1 covers all upstream (i.e., cradle-to-gate) emissions from the production of goods and services purchased by the reporting company in the reporting year. It includes all emissions from the extraction of raw materials, processing, manufacturing, and transport of purchased goods and services up to the point they arrive at the reporting company.

Typical examples of Scope 3.1 purchases are: office supplies and consumables (paper, printed materials, stationery, etc.), raw materials and production inputs (metals, plastics, chemicals, etc.), equipment and tools (small tools, uniforms, small devices etc.), and purchased services (IT and software services, cloud hosting, consulting, etc.)

​​How does the GHG Protocol recommend calculating Scope 3.1 emissions?

Companies may use any of the methods listed below to calculate Scope 3.1 emissions. The first two methods (supplier-specific and hybrid), require the reporting company to collect data from the suppliers, whereas the second two methods (average-data and spend-based), use industry average data. The methods are listed in order of how specific the calculation is to the individual supplier of a good or service. However, companies need not always use the most specific method as a first preference.

1. Supplier-specific method
   • This method involves collecting product-level GHG inventory data from suppliers.
   • Possible activity data includes:
     1. Quantity of goods and services purchased
   • Possible data sources can include:
     1. Questionnaire sent to relevant supplier
   • Emission factors:
     1. Cradle-to-gate emission factor for the relevant good and service, obtained directly from the supplier
2. Hybrid method
   • This method involves using supplier-specific data, and supplementing it with secondary data where supplier data is unavailable.
   • Possible activity data includes:
     1. Allocated Scope 1 and Scope 2 data for the relevant product or service OR
     2. Mass or volume of inputs (material, fuel), and and distance from the origin of the raw material inputs to the supplier OR
     3. Quantities of waste emitted
   • Possible data sources can include:
     1. Internal data systems (bill of materials, freight distance of raw materials) of suppliers
     2. Public GHG inventory reports
   • Emission factors needed:
     1. Cradle-to-gate emission factors for materials used by a supplier to produce goods
     2. Life cycle emission factors for fuel used by incoming transport of input materials to supplier
     3. Emission factors for waste outputs supplier to produce purchased goods
3. Average-data method
   • This method involves multiplying physical activity data (mass in kilograms, or other relevant units) by relevant industry-average emission factors
   • Possible activity data includes:
     1. Mass or number of units of purchased goods or services for a given year (e.g., kg, hours spent)
   • Possible data sources can include:
     1. Internal data systems (e.g. bill of materials)
     2. Purchasing records
   • Emission factors needed:
     1. Cradle-to-gate emission factors of the purchased goods or services per unit of mass or unit of product (e.g., kg CO2e/kg or kg CO2e/hour spent).
4. Spend-based method
   • This method involves multiplying the amount spent on purchased goods and services by the relevant spend-based emission factor (expressed as grams or kilograms of CO2-equivalent per unit of currency).
   • Possible activity data includes:
     1. Amount spent on purchased goods or services, by product type, in local currency
   • Possible data sources can include:
     1. Accounting systems, enterprise resource planning systems (ERP)
     2. Bills of materials
     3. Purchasing records
   • Emission factors needed:
     1. Cradle-to-gate emission factors of the purchased good or services per unit of economic value (e.g. kg CO2e/NOK)

How are Scope 3.1 emissions calculated in Climate Reporting?

In Climate Reporting, Scope 3.1 emissions are currently calculated using the spend-based method. Transactions in ledger account series 4000–4999 (purchases of goods and services) and 6000–6999 (operating expenses) together represent a large share of these emissions. Relevant transactions from these account series are identified and extracted, then multiplied by appropriate spend-based emission factors to determine the resulting CO₂-equivalent emissions.

Calculation logic

• The customer’s financial data is made available to Climate Reporting, where relevant information for calculating greenhouse gas emissions is extracted. This includes transactions from relevant accounts, together with the following data fields for each transaction
  • Account ID (as defined in the ERP)
  • SAF-T Account ID and version
  • Amount (in a defined currency)
  • The date the purchase was made
• Climate Reporting maintains a mapping between SAF-T accounts and GHG Scope categories. All financial accounts mapped to Scope 3.1 are identified, and the transactions mapped to these accounts are extracted.
• For each SAF-T account, the net monthly amount is calculated by summing all relevant transactions. Each account is also linked to a specific emission factor based on the type of purchases recorded in that account. For example, SAF-T account 6700 (“Accountancy and consultancy services, etc.”) is associated with an emission factor for consultancy services.
• The aggregated transaction values are then multiplied by the relevant emission factors to calculate greenhouse gas emissions. Finally, the calculated emissions are aggregated into custom-defined subcategories.

How are Scope 3.1 emissions displayed in Climate Reporting ?

App

In the app, total Scope 3.1 emissions are displayed in the dashboard under the “Emissions by category” card and reported in tonnes CO2e per year. More detailed Scope 3.1 emissions breakdowns are planned for future releases.

Report

In the report, Scope 3.1 emissions are presented as a monthly breakdown in the “Emissions by Scope” tab and reported in tonnes CO2e. Additional detailed Scope 3.1 emissions data is currently under development and will be available in an upcoming release.