From Zero to Data Hero: Help Suppliers start reporting emissions

The GHG Protocol breaks Scope 3 emissions into 15 subcategories, covering everything from purchased goods to employee commuting. While companies often talk about Scope 3 as a whole, each subcategory has its own drivers, data sources, and reduction opportunities.

This post explores Scope 3.2 (capital goods), 3.3 (fuel- and energy-related activities), and 3.4 (upstream transportation and distribution), three categories particularly relevant to manufacturing, construction, and logistics-heavy industries.

Quick Note on Scope 3.1: Purchased Goods and Services

Before diving into 3.2–3.4, it’s worth acknowledging Scope 3.1, which typically accounts for the largest share of upstream emissions. This category covers the production of all raw materials, components, and services a company buys to operate.

• Examples: steel, plastics, textiles, IT services.
• Why it matters: For most companies, Scope 3.1 is the single biggest hotspot, often exceeding 50% of their total carbon footprint.
• Connection to 3.2–3.4: While 3.1 deals with consumables and services, 3.2–3.4 zoom in on capital goods, energy upstream emissions, and logistics, making the full picture more precise.

To know more on it dive into our earlier blog "Scope 3.1 Emissions: Purchased Goods & Services Explained"

Scope 3.2: Capital Goods Emissions

Capital goods include machinery, equipment, and infrastructure purchased by a company. Unlike day-to-day raw materials, these are long-term investments with high embodied carbon.

• Examples: factory machinery, office IT systems, construction cranes.
• Why it matters: In manufacturing or construction, capital goods often represent a large chunk of the embedded carbon footprint.
• Measurement approaches:
  • Supplier-specific data (preferred, if lifecycle assessments are available).
  • Industry average emission factors for equipment categories.

Real-world lens: A construction company investing in new cement mixers may find that capital goods account for up to 20% of their upstream emissions, highlighting the need for low-carbon alternatives.

Scope 3.3: Fuel- and Energy-Related Activities (Not in Scope 1 or 2)

This category covers the indirect emissions from the production, processing, and delivery of fuels and electricity a company purchases, but before it reaches the company’s door.

• Examples: extraction and refining of crude oil before purchase, electricity transmission losses, upstream emissions from natural gas pipelines.
• Why it matters: Even if a company buys “green power,” the upstream emissions of that energy mix must be considered.
• Measurement approaches:
  • National grid emission factors.
  • Fuel lifecycle databases (e.g., GREET model).

Real-world lens: An automotive plant running largely on grid electricity in India will find that Scope 3.3 can be 10–15% of its footprint, driven by coal-heavy generation upstream.ng the need for low-carbon alternatives.

Scope 3.4: Upstream Transportation and Distribution

Scope 3.4 includes third-party logistics, warehousing, and transport of purchased goods before they arrive at a company’s facility.

• Examples: shipping raw materials from overseas, trucking parts to assembly plants, outsourced warehousing energy use.
• Why it matters: Logistics emissions scale with globalised supply chains, particularly in energy-intensive industries like electronics or automotive.
• Measurement approaches:
  • Primary data from carriers (fuel usage, distance traveled).
  • Default emission factors by mode (air, sea, road, rail).

Real-world lens: A manufacturer sourcing steel from China may find ocean freight adds millions of tonnes CO₂e annually, making low-carbon shipping routes or supplier relocation attractive reduction levers.

How to Measure These Categories Effectively

• Start broad: Use industry averages and secondary databases (e.g., DEFRA, ecoinvent) when supplier data isn’t available.
• Get specific over time: Engage suppliers for lifecycle assessment (LCA) data on machinery, fuels, and logistics.
• Leverage digital tools: Platforms like Mavarick automate data collection, validation, and category-level reporting to align with GHG Protocol requirements.

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Why the Breakdown Matters?

Each Scope 3 category, from 3.2 capital goods to 3.4 transportation, reveals unique hotspots in a company’s upstream emissions profile. Treating Scope 3 as one big “black box” hides critical opportunities for decarbonisation.

By tracking each category individually, businesses can:

• Build more accurate GHG inventories.
• Identify supplier-specific reduction plans.
• Strengthen compliance with CSRD, CDP, and other frameworks.

To map your upstream emissions categories with precision, explore how Mavarick’s Scope 3 platform supports category-level reporting and reduction strategies.

FAQs

What are Scope 3.2, 3.3, and 3.4 emissions?

Scope 3.2 (Capital Goods): Emissions from producing machinery, buildings, and equipment a company uses.

Scope 3.3 (Fuel- and Energy-Related Activities): Upstream emissions from producing the fuels and energy a company purchases (not already counted in Scope 1 or 2).

Scope 3.4 (Upstream Transportation & Distribution): Emissions from transporting goods purchased by the company, including third-party logistics.

How are these categories different from Scope 3.1 (Purchased Goods & Services)?

Scope 3.1 covers everyday materials and services a company buys (e.g., raw materials, IT services). By contrast, 3.2–3.4 highlight more specific areas: capital investments, upstream energy, and logistics. Together, they give a fuller picture of upstream emissions.

Why do these subcategories matter for net zero?

Scope 1: Direct emissions from owned operations.

Scope 2: Indirect emissions from purchased energy.

Even if Scope 3.1 is the largest, ignoring 3.2–3.4 means underestimating the carbon footprint. For example, transport and distribution alone can account for significant hidden emissions in global supply chains.

How can companies measure Scope 3.2–3.4 emissions effectively?

Start with industry averages when supplier data isn’t available.

Gradually build supplier-specific reporting systems.

Use hybrid approaches that blend both methods for accuracy and scalability.