5 min. read
Last updated Jun 3, 2025
Key takeaways
Scope 3.1 emissions, purchased goods and services, can account for up to 67% of a company’s total carbon footprint, making them a critical category for measurement and action.
Companies can reduce risk, meet stakeholder demands, and strengthen supply chain resilience by proactively managing scope 3.1 emissions.
Carbon Direct empowers organizations to take meaningful action on scope 3.1 through science-based measurement, practical emissions management strategies, and deep supplier engagement.
What are scope 3 emissions and why do they matter?
Scope 3 emissions include all indirect greenhouse gas (GHG) emissions that occur across a company’s value chain. While scope 1 emissions are from directly owned or controlled activities, and scope 2 are indirect emissions from the generation of purchased electricity, heat, or steam, scope 3 emissions encompass upstream and downstream activities throughout the value chain.
Within scope 3, there are 15 categories, including activities such as raw material extraction, purchased services, shipping, business travel, product use, and end-of-life treatment. Critically, scope 3 emissions often make up the majority of a company’s total carbon footprint, in some cases over 85% of overall emissions.
Category 3.1 (purchased goods and services) is often the largest contributor. For many organizations, it can be as much as 67% of their total corporate footprint. Despite being outside a company’s direct operational control, scope 3 emissions are increasingly scrutinized by regulators, investors, and customers alike, making them essential to measure, manage, and reduce.
What is included in scope 3.1 emissions?
Scope 3.1 emissions captures all cradle-to-gate emissions associated with products and services procured by an organization. These include emissions from the extraction of raw materials, energy usage, manufacturing processes, waste, and transport and travel up to the point of delivery to the reporting company. As such, the types of activities within this category are quite extensive and disparate.
Examples of scope 3.1 items include:
Raw materials (e.g., limestone, copper ore, lumber)
Intermediate products (e.g., steel, electronic components, platform chemicals)
Packaging materials
Office supplies and equipment
Professional services
Cloud computing and software services
The size of scope 3.1 emissions varies widely by industry. For example, a consumer goods manufacturer sourcing large volumes of physical products may see a larger share of emissions in this category than the supplier providing the raw materials. For many organizations that are service-based or contract out manufacturing, scope 3.1 can be the most significant emissions category.
What is the strategic value of scope 3.1?
While scope 3.1 emissions fall outside a company’s direct operational control, they are not beyond its influence. Addressing emissions from purchased goods and services may open up a range of strategic benefits:
Innovation opportunities through lower-carbon materials and production processes.
Enhanced supplier relationships and engagement on shared sustainability goals.
Improved resilience and risk mitigation across supply chains.
By assessing and acting on scope 3.1 emissions, companies can drive meaningful reductions and catalyze change throughout the entire supply chain.
What are the methods for calculating scope 3.1 emissions?
There are three methods to calculate scope 3.1 emissions based on the data collected. Each offers a different balance of speed, accuracy, and scalability.
Spend-based method
This approach multiplies the amount of money spent on a good or service by an economic emissions factor (e.g., kg CO₂e per dollar spent). Most companies use this approach as a starting point but transition to more accurate methods as they advance in their sustainability journey.
Spend-based method for calculating scope 3.1 emissions | |
Advantages | Limitations |
Fast and scalable across categories | Lower accuracy, especially during periods of inflation or economic volatility |
Useful for initial hotspot identification | Cannot reflect actual emissions reductions by suppliers |
Helps fill data gaps when activity data is unavailable | Misalignment between price and emissions (e.g., high-cost items may not be high-emission) |
Average data method
This method uses average emissions factors for goods or services, based on industry datasets. For instance, industry life cycle assessments (LCAs) might be used to estimate the emissions associated with a kilogram of steel purchased.
Average data method for calculating scope 3.1 emissions | |
Advantages | Limitations |
More accurate than spend-based | Lack of raw data granularity |
Suitable for companies refining emissions data to enable targeted reductions | Geographic variation limited |
Supplier-specific method
The supplier-specific method is the most accurate approach and involves collecting actual emissions data directly from suppliers. This includes LCAs, environmental product disclosures (EPDs), product carbon footprints (PCFs), supplier emissions reports, or Environmental, Social, and Governance (ESG) reports.
Supplier-specific method for calculating scope 3.1 emissions | |
Advantages | Limitations |
High accuracy and granularity | Challenging to scale across many suppliers |
Builds engagement with suppliers | Data may be confidential, inconsistent, or incomplete |
Enables tracking of supplier improvements over time | Requires continuous updating of supplier information |
Hybrid approach
Adopting a hybrid approach allows many companies to maximize their data collection efforts by applying the supplier-specific method for high-impact purchases and using average or spend-based methods elsewhere. This tiered approach enables efficient use of resources while maintaining data quality for critical emission sources.
Where can you find scope 3.1 data?
Data for scope 3.1 emissions typically resides in procurement and finance functions. Purchase orders, invoices, and supplier contracts often contain critical information such as volume, product category, and spend. However, collecting, organizing, and analyzing this data can be resource-intensive, especially for companies with complex and global supply chains. Data type and availability play a key role in determining the method used for calculating emissions, impacting the accuracy and ability to reduce emissions.
What are the challenges in measuring scope 3.1 emissions?
As most organizations will attest, measuring scope 3.1 has many challenges, from resource constraints to data availability. As organizations intensify their climate commitments, they are increasingly confronted with a range of technical, logistical, and strategic barriers that make accurate measurement and consistent reporting difficult. Understanding these roadblocks is critical to developing more resilient and impactful scope 3.1 measurement practices.
Data availability and quality: Collecting high-quality data is often a bottleneck, with many organizations lacking the systems to track product-level or supplier-specific emissions. Without the proper tracking in place, emissions calculations rely on less accurate methods, making it difficult to reflect or meet reduction efforts.
Supplier inconsistencies and allocation complexities: Even when suppliers share emissions data, the methodologies, boundaries, and underlying assumptions across them will vary widely. This adds an extra layer of difficulty to data aggregation. Additionally, the allocation of supplier emissions may vary based on the supplier’s chosen method, such as economic (based on spend and supplier revenue / emissions) or service-level (based on units purchased and supplier output / emissions). These inconsistencies can significantly affect reported totals, making it challenging to compare suppliers.
Complex, multi-tiered supply chains: Upstream emissions can span multiple suppliers across different geographies and industries. Visibility often becomes cloudier beyond Tier 1 suppliers, making it difficult to account for emissions generated deeper in the value chain.
Timing and synchronization: Aligning procurement, emissions calculation, and reporting cycles can be challenging. Delays in supplier disclosures or emissions factor updates can create reporting lags and misalignment.
Top 5 strategies to reduce scope 3.1 emissions
Reducing scope 3.1 emissions requires balancing precise measurement with targeted action. This means identifying high-impact categories, collaborating with key suppliers, and harnessing available emissions data to improve accuracy and accountability. Here are five strategies organizations can use to start driving impact:
Prioritize key categories and suppliers: Not all purchases contribute equally to emissions. Conduct a hotspot analysis to identify the highest-emitting goods or services and prioritize the top suppliers for engagement. Consider prioritizing the share of emissions, the share of procurement spend, and the current methodology type.
Engage suppliers and set expectations: Encourage suppliers to measure and disclose their emissions, invest in LCAs or PCFs, and set their own science-based targets. Collaborative initiatives, such as supplier engagement programs, can support progress.
Leverage readily available supplier reports: Many electronic companies, cloud providers, and industrial products provide detailed emissions data through EPDs, LCAs, and specific service emissions reports. For example, AWS and Google offer detailed emissions reports for data hosting and services. Leveraging these can help reduce uncertainty and improve accounting accuracy in software-heavy organizations.
Identify opportunities for low-carbon inputs: The same reports that help improve reporting accuracy can also provide more detail on the material inputs of purchased goods. This level of information can enable organizations to pursue opportunities for lower-carbon inputs to reduce emissions.
Invest in centralized data systems: A centralized platform for carbon accounting data management can streamline emissions tracking, improve visibility, and enable scenario modeling. Several of the other strategies cannot be as effective without the right tools in place to manage this key information.
Turning complexity into opportunity
Tackling scope 3.1 emissions may feel daunting, but it’s also where some of the biggest climate opportunities lie. By investing in better data, fostering supplier collaboration, and integrating sustainability into procurement practices, companies can unlock innovation, resilience, and long-term value. Organizations that lead on scope 3.1 will not only meet emerging disclosure standards but will shape the low-carbon supply chains of the future.
Take action with Carbon Direct
At Carbon Direct, we help organizations move from measurement to impact. Our Measure platform pairs advanced technology with deep scientific expertise to deliver precise, actionable, and compliant carbon accounting, built for real-world complexity. Through our Supplier Engagement solution, streamline scope 3 data collection and improve emissions measurement to take action on your decarbonization plan.
Ready to reduce scope 3.1 emissions with confidence?
Contact us to learn how Carbon Direct can help you measure, manage, and reduce your scope 3.1 emissions.
