Scope 3 Category 1: How to calculate purchased goods and services emissions
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Scope 3 Category 1 covers upstream greenhouse gas emissions associated with producing the goods and services a business purchases. These emissions occur outside the organisation's direct operations but form part of its wider environmental impact.
Calculating Scope 3 Category 1 emissions involves reviewing procurement activity, selecting suitable calculation methods and gathering reliable information from suppliers.
Scope 3 Category 1 covers emissions generated during the production of goods and services purchased by a business.
These are often described as cradle-to-gate emissions because they include relevant activities from raw material extraction through to production, before the purchased product leaves the supplier's production facility.
For example, a manufacturer purchasing steel components may need to account for emissions associated with raw material extraction, processing and manufacturing.
An office-based business may need to consider emissions associated with purchased consumables and professional services.
The category helps organisations understand the environmental impact of their purchasing decisions beyond their own premises and activities.
Category 1 can include emissions associated with:
However, not every business purchase belongs in Category 1.
Capital goods, such as certain machinery, buildings and equipment, are reported separately under Scope 3 Category 2. Other purchases and activities may also fall within different Scope 3 categories.
Businesses should therefore establish clear reporting boundaries before calculating emissions to avoid allocating purchases to the wrong category.
The calculation involves identifying relevant purchases, collecting activity data and applying appropriate emissions factors.
The exact method depends on the information available.
A business with detailed product-level emissions data from suppliers can calculate emissions differently from an organisation that only has procurement expenditure records.
There are four recognised approaches:
Businesses can use different methods across purchasing categories, provided the approach is appropriate and clearly documented.
The supplier-specific method uses emissions information relating to the actual products or services purchased.
For example, a supplier may provide a product carbon footprint showing the cradle-to-gate emissions associated with each unit supplied.
The purchasing business can multiply the quantity purchased by the relevant product-specific emissions factor.
This approach can provide a more representative calculation because it reflects the particular product or service rather than relying entirely on industry averages.
However, the data must cover the relevant lifecycle stages and should be checked for quality, completeness and consistency.
A supplier's total organisational carbon footprint should not automatically be treated as the emissions associated with the goods purchased from that supplier.
The hybrid method combines supplier-specific information with secondary emissions data.
For example, a supplier may provide information about the energy, materials or processes involved in producing a particular product.
Where information is missing, suitable secondary data can be used to estimate the remaining relevant emissions.
This approach can be useful when suppliers have some reliable information but cannot provide a complete product-level carbon footprint.
Businesses need to ensure that the different data sources cover the appropriate activities without leaving gaps or counting the same emissions more than once.
The average-data method uses the quantity of goods or services purchased alongside appropriate industry-average emissions factors.
For example, a business may know how many tonnes of a particular material it purchased during the reporting year.
That quantity can be multiplied by a relevant emissions factor expressed per tonne of material.
This can provide a useful estimate when supplier-specific emissions data is unavailable.
The accuracy of the result depends on how closely the selected emissions factor represents the actual product or service purchased.
The spend-based method estimates emissions using the amount spent on purchased goods and services.
Procurement expenditure is multiplied by an appropriate emissions factor expressed per unit of monetary value.
For example, an organisation might use annual expenditure on a particular purchasing category to estimate the associated emissions.
This method can be a practical starting point when detailed quantity or supplier data is unavailable.
However, changes in prices can affect spend-based estimates even when the physical quantity purchased remains unchanged.
Businesses should therefore consider improving significant spend-based estimates with more representative activity or supplier-specific information over time.
Green Economy identifies procurement records, supplier expenditure, purchasing quantities and supplier-specific emissions information as useful inputs for purchased goods and services calculations.
Businesses should begin by gathering:
Finance and procurement teams will often hold much of the information needed to establish an initial picture.
Before calculating emissions, businesses should check that records cover the chosen reporting period and that purchases have been classified appropriately.
Not every supplier will contribute equally to Category 1 emissions.
Businesses should identify purchasing categories likely to have a significant environmental impact, considering factors such as materials, production processes and purchasing volumes.
High expenditure can help identify areas worth investigating, but spending alone does not always indicate the highest emissions.
For example, a relatively inexpensive material purchased in large quantities may have a substantial carbon impact.
A phased approach to Scope 3 measurement can help businesses concentrate on significant suppliers and activities before expanding data collection.
This allows organisations to direct their time towards information that is most likely to improve their carbon footprint.
Much of the information required for Category 1 sits outside the reporting organisation.
Engaging suppliers is therefore an important part of improving calculation quality.
Businesses can start by asking whether suppliers already measure emissions associated with the products or services they provide.
Useful requests may include:
Requests should be proportionate to the supplier and the significance of the purchasing activity.
Where detailed information is unavailable, businesses can explain what is needed and establish a process for improving reporting over time.
Accurate category boundaries are essential when calculating Scope 3 emissions.
Category 1 should not include purchases that belong in another Scope 3 category, such as capital goods.
Businesses should also distinguish the emissions associated with producing purchased goods from separately reported transportation activities where relevant.
When combining supplier-specific and secondary information, check whether the emissions factors already include particular lifecycle stages.
The aim is to capture the full relevant emissions without including the same activity twice within the organisation's Scope 3 inventory.
Documenting calculation methods, assumptions and category boundaries makes the results easier to review.
Incomplete supplier information is a common challenge when businesses begin calculating Scope 3 emissions.
Organisations can start with available procurement information and improve their calculations as better data becomes accessible.
Where supplier-specific data is missing, suitable average-data or spend-based methods can help establish an initial estimate.
Businesses should record which estimates have been used and identify where information needs improving.
This creates a practical starting point while maintaining transparency about the limitations of the calculation.
Over time, more detailed information from significant suppliers can make the footprint more representative of actual purchasing activity.
Calculating purchased goods and services emissions helps businesses understand which parts of their procurement activity may contribute most to their carbon footprint.
This information can support decisions about supplier engagement, purchasing specifications and opportunities to reduce emissions associated with particular materials or services.
Businesses may identify opportunities to purchase fewer materials, reduce waste, improve resource efficiency or work with suppliers to understand lower-carbon alternatives.
The most appropriate action will depend on the organisation's operations, purchasing requirements and supply chain.
Category 1 data should therefore support practical procurement decisions rather than being treated solely as a reporting exercise.
Businesses should calculate Category 1 emissions consistently across their chosen carbon reporting periods.
Annual reporting can help organisations monitor changes in purchasing activity and identify whether their emissions profile is changing.
However, comparisons need to account for changes in calculation methods, emissions factors and data quality.
For example, replacing a spend-based estimate with supplier-specific data may change the reported emissions figure even if purchasing activity has remained similar.
Businesses should document these changes so that improvements in measurement are not mistaken for actual emissions reductions.
Green Economy's carbon footprinting support helps businesses understand and measure Scope 1, Scope 2 and Scope 3 emissions, including those associated with their supply chains.
Its guide to measuring Scope 3 emissions provides practical advice on identifying relevant emissions sources, engaging suppliers and improving data collection.
Businesses can also explore Green Economy's guidance on the data needed for a business carbon footprint to understand which purchasing records and supplier information can support their calculations.
For organisations looking to act on their results, its advice on carbon reduction requirements for suppliers explains how to set proportionate expectations and incorporate environmental information into procurement decisions.
Understanding Category 1 emissions is an important step towards making purchasing decisions that support wider carbon reduction objectives.
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