Scope 3.1 Emissions: Purchased Goods & Services Explained

When companies begin reporting their indirect emissions, one category almost always stands out: Scope 3.1 emissions. According to the GHG Protocol Scope 3 Standard, Category 1 (Purchased Goods & Services) captures the greenhouse gases embedded in everything a business buys, from raw materials to office supplies.

These emissions rarely appear on a company’s balance sheet, yet they typically represent the majority of an organisation’s upstream supply chain carbon footprint. For manufacturers, Scope 3.1 alone can account for more than 60% of total emissions.

In this blog, we’ll break down the definition of purchased goods emissions, how to measure them, and the strategies leading companies are using to work with suppliers on reductions. By the end, you’ll see why tackling Category 1 is the foundation of a credible net-zero strategy.

Why Scope 3.1 Matters in 2025

Global disclosure rules, from the EU’s CSRD to the US SEC climate disclosures, increasingly require companies to report Scope 3.1 emissions. Investors are also asking sharper questions: What share of your emissions sit in purchased goods? How do you plan to reduce them?

For industries with complex supply chains, Scope 3.1 is the elephant in the room.

• Consumer goods companies: Packaging, agricultural inputs, and chemicals.
• Automotive manufacturers: Steel, aluminum, and plastics.
• Tech firms: Semiconductors, batteries, and rare earth metals.

Related Insight: [Understanding the 15 Scope 3 Categories]

Scope 3.1 Emissions Definition

Under the GHG Protocol Scope 3 Category 1, purchased goods emissions are defined as:

“All upstream emissions from the production of goods and services purchased or acquired by the reporting company in the reporting year.”

This includes:

• Materials (steel, cement, plastics, textiles, chemicals).
• Components (electronics, automotive parts).
• Services (outsourced IT, consulting, logistics support).

Essentially, Scope 3.1 emissions reflect the embodied carbon in everything a business buys before it reaches the company’s gate.

Measurement Approaches

So, what is Scope 3 emissions in practical terms?

According to the GHG Protocol Scope 3 Standard, it refers to “all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, both upstream and downstream.”

This spans everything from raw material extraction to product end-of-life, essentially capturing the ripple effects of doing business.

Scope 3 Categories Explained

Measuring supplier carbon data for Scope 3.1 is both critical and challenging. Two main approaches are commonly used:

1. Supplier-Specific Data

• Directly collected from suppliers (via surveys, shared carbon reports, or digital platforms).
• Most accurate, especially when suppliers use primary data from their own operations.
• Limitations: Data gaps, inconsistent methodologies, and low supplier response rates.

2. Spend-Based or Secondary Data

• Uses economic input-output (EEIO) databases that estimate emissions per dollar spent on goods/services.
• Easier to calculate, especially at scale.
• Limitations: High uncertainty; doesn’t reflect supplier-specific practices.

Best practice is a hybrid approach: start with spend-based data to establish a baseline, then improve accuracy by collecting supplier carbon data from priority vendors over time.

Common Challenges

Companies tackling Scope 3.1 often face:

• Data inconsistency: Suppliers report using different standards or none at all.
• Low engagement: Many suppliers see carbon accounting as a “customer problem.”
• Resource constraints: SMEs in the supply chain lack tools or expertise.
• Allocation issues: When one supplier serves multiple customers, how should emissions be distributed?

These challenges explain why many companies initially underreport Scope 3.1, only to revise numbers upwards later when supplier data improves.

Strategies to Reduce Purchased Goods Emissions

Addressing upstream supply chain carbon footprint requires a combination of data, collaboration, and innovation. Leading approaches include:

1. Supplier Engagement Programs
   • Provide suppliers with clear reporting templates aligned with the GHG Protocol Scope 3 Category 1.
   • Offer training or digital platforms to simplify data submission.
   • Set expectations via contracts or sustainability clauses.
2. Material Efficiency
   • Optimise design to use less material per unit (lightweighting in automotive, for example).
   • Shift to recycled or low-carbon materials (e.g., green steel, bio-based plastics).
3. Supplier Incentives
   • Co-invest in clean technology.
   • Reward suppliers who provide transparent and lower-carbon alternatives with preferred status.
4. Collaborative Standards
   • Participate in industry-wide initiatives (e.g., Catena-X in automotive, Sustainable Apparel Coalition in fashion).
   • Use common frameworks like the Asset Administration Shell (AAS) for interoperability.
5. Technology and Automation
   • Deploy digital twins, IoT, and AI-powered carbon accounting tools to capture real-time supplier emissions.
   • Automate data validation to reduce errors and manual back-and-forth.

Example Case: The Automobile Industry

The auto sector illustrates why Scope 3.1 is so critical.

• A typical car is made up of thousands of parts sourced globally.
• Steel and aluminum alone account for over 50% of purchased goods emissions.
• Batteries add another major share, with mining and processing of lithium, nickel, and cobalt creating substantial embodied carbon.

Automakers tackling Scope 3.1 are focusing on:

• Partnering with steel suppliers developing hydrogen-based “green steel.”
• Reducing plastics in interiors by switching to recycled composites.
• Working with battery suppliers to ensure responsible sourcing and lower-carbon refining processes.

This is why companies like Volkswagen, BMW, and Tesla now require suppliers to provide carbon footprints at the product level, making supplier carbon data a prerequisite for long-term partnerships.ations, the first attempt at Scope 3 looks like a rough estimate rather than a perfect calculation. The goal is progress, not perfection.

Want to simplify Scope 3.1 supplier reporting? 

Real-World Results- Volkswagen case study Brief

Mavarick partnered with Volkswagen Group to enhance its Scope 3 management. By capturing and analysing upstream supplier data with our AI-powered platform:

• Volkswagen achieved a 38% reduction in Scope 3.1 emissions linked to purchased goods and logistics.
• The initiative unlocked €400,000 in annual savings through energy optimisation and smarter material sourcing.
• Suppliers were engaged more effectively, moving from generic estimates to validated, supplier-specific carbon data.

This case proves that Scope 3.1 action delivers a dual win: measurable climate impact and tangible business value.

Read the full success story →

Conclusion

Scope 3.1 emissions from purchased goods and services represent the largest, and most complex, part of many companies’ climate footprint. Yet ignoring them is no longer an option.

By combining GHG Protocol-aligned reporting, supplier collaboration, and digital automation, businesses can turn upstream supply chain carbon footprint from a compliance burden into a competitive advantage.

Addressing purchased goods emissions is not just about meeting disclosure rules, it’s about building resilient, future-proof supply chains.

FAQs