If Scope 1 and 2 emissions are the warm-up exercises of carbon accounting, Scope 3 is the marathon — sprawling, messy, and often responsible for 70–95% of a company’s total emissions. And for SMEs, it’s typically where the real impact lies.

With investor expectations rising and frameworks like the GHG Protocol, EcoVadis and CSRD demanding greater transparency, Scope 3 reporting is no longer optional — it’s essential.

This guide breaks down the categories that matter most, shows you how to use spend data to simplify calculations, and links to our related Emerald Power blogs, including How to Improve Your EcoVadis Score, How to Set Science-Based Targets, and Creating Your First Sustainability Report.

Why Scope 3 Emissions Matter for SMEs

Scope 3 includes all indirect emissions in your value chain — everything you buy, everything you waste, and the travel done on your behalf.

Why they matter:

They make up the majority of your footprint (per the GHG Protocol Scope 3 Standard).

They’re central to your EcoVadis Environmental score.

To set a science-based target, SBTi requires most companies to measure and reduce Scope 3.

They help identify major cost-saving opportunities in travel, materials, and waste.

If you're planning sustainability reporting or future compliance (CSRD, SECR, or investor ESG), Scope 3 is the foundation.

(See: Creating Your First Sustainability Report)

The Key Scope 3 Categories SMEs Should Focus On

While the GHG Protocol outlines 15 categories, most SMEs only need to calculate four to capture the bulk of their emissions.

1. Purchased Goods & Services (Category 1)

This is usually the largest Scope 3 category for SMEs — covering everything you buy, from IT equipment to raw materials to marketing services.

How to calculate using spend data

The spend-based method (endorsed by EPA and aligned with GHG Protocol) is the fastest and simplest approach.

Steps:

Export yearly supplier spend from your accounting system.

Categorise suppliers (IT, packaging, consultancy, raw materials).

Apply spend-based emission factors (e.g., € spent × kg CO₂e per €).

Prioritise the largest categories.

This approach provides a strong baseline for SMEs and aligns with best practices outlined by CDP.

(For more on establishing baselines, see our blog Creating Your First Sustainability Report.)

2. Business Travel (Category 6)

Flights, trains, taxis, hotel stays — every trip carries emissions and requires consistent tracking.

How to calculate it

Use exports from your travel provider, receipts, or booking systems. You'll need:

Distance travelled

Travel mode (flight, rail, car)

Hotel nights

You can use emissions factors from:

DEFRA (UK)

EPA (US)

IEA (global)

Business travel is also one of the easiest places to reduce emissions — incentivising train travel, reducing flights, and using video conferencing all have immediate impact.

3. Employee Commuting (Category 7)

A significant, often overlooked category — especially for office-based firms, agencies, tech companies, and on-site teams.

How to calculate it

Use an anonymous employee survey to gather:

Home-to-work distance

Number of commuting days

Transport mode (car, bus, rail, bike, walk, EV)

Multiply distance × frequency × emissions factor.

Commuting reductions also make brilliant sustainability content — EV schemes, bike-to-work, hybrid work policies, etc.

4. Waste (Category 5)

Not usually the biggest category, but required for reporting standards and essential for a full emissions picture.

How to calculate it

Request data from your waste contractor:

Waste volume

Waste type

Treatment method (recycling, landfill, incineration)

Use emissions factors from EPA Waste Factors or DEFRA.

When data isn’t available, estimate based on office size and employee count — a common approach endorsed in the GHG Protocol Waste Guidance.

How to Pull Everything Together

Once you’ve calculated these major categories:

Consolidate them into a single emissions inventory

Convert each activity into CO₂e (using recognised factors)

Establish your baseline year

Build your reduction plan

Improve accuracy over time by requesting supplier-specific emissions data

If you’re already thinking about publishing performance, our blog Creating Your First Sustainability Report walks you through the entire process.

How Scope 3 Supports Long-Term Sustainability Strategy

Accurate Scope 3 data empowers you to:

Set credible Science Based Targets (see How to Set Science-Based Targets)

Improve your EcoVadis score (see How to Improve Your EcoVadis Score)

Prepare for CSRD, SECR, and other investor-driven disclosures

Identify cost-saving operational improvements

Engage suppliers and demonstrate leadership

Scope 3 isn’t just a reporting requirement — it’s strategic.

FAQ: Calculating Scope 3 Emissions

1. What are Scope 3 emissions?

Scope 3 emissions are the indirect emissions in your value chain, as defined by the GHG Protocol

2. What categories matter most for SMEs?

Purchased Goods & Services, Business Travel, Employee Commuting, and Waste — these usually represent the majority of SME emissions.

3. How do I calculate supplier emissions?

Start with spend-based calculations (endorsed by GHG Protocol and CDP). Over time, request supplier-specific emissions reports or sustainability data.

4. Do I need Scope 3 to publish a sustainability report?

Yes — modern frameworks and investors expect it. For guidance, see our blog Creating Your First Sustainability Report.

5. Will Scope 3 help improve my EcoVadis score?

Absolutely. EcoVadis heavily weights carbon measurement and reduction planning.

(See: How to Improve Your EcoVadis Score.)

6. Do I need Scope 3 to set Science Based Targets?

Yes. SBTi requires Scope 3 measurement and target-setting when it represents more than 40% of a company’s footprint.

(See: How to Set Science-Based Targets.)