Scope 3 is the most comprehensive and often the most significant category of greenhouse gas emissions under ESRS E1. These emissions are not produced by the entity and do not result from purchased energy, but occur throughout the entire value chain - from the production of raw materials to the use and disposal of products.

Definition of Scope 3 within ESRS E1

According to paragraph 44 of ESRS E1, Scope 3 includes all other indirect emissions that occur in the entity's upstream and downstream activities. These emissions are divided under the GHG Protocol into 15 distinct categories such as:

procurement of goods and services

upstream transport and distribution

utilisation of products sold

end-of-life disposal

business travel

investments held.

The standard requires full assessment of these emissions to the extent that they are significant in terms of impact and materiality.

Scope 3 reporting obligations

According to RD E1-6, entities must provide:

• screening of Scope 3 categories relevant to own work
• the volume of emissions in each significant category expressed in tCO₂e
• methodology used for estimation, data sources and level of granularity
• proportion of primary data vs. estimates
• frequency of updating the Scope 3 inventory - at least every 3 years or whenever there are significant changes in the business model.

Steps in drawing up the inventory Scope 3

Identification and classification of categories - the organisation assesses each of the 15 categories for relevance and materiality

Data collection - supply chain data, product life cycle data, commercial contracts and standardised estimation tools are used

Application of calculation methodologies - GHG Protocol guidelines, sectoral methodologies and material and process carbon footprint databases can be used

Consolidation and documentation of estimates - indicate exactly which categories have been included, what methods have been used and what are the limitations in terms of reliability.

Reporting under ESRS E1

Scope 3 reporting should be clear, justified and proportionate to the significance of the emissions. It is recommended to structure the information by categories, mention sources of uncertainty, relate the results to the organisation's transition plans, explain deviations from previous years, to the extent that they are relevant.

Example of Scope 3 reporting

Sustainability report Coca-Cola HBC Romania's 2023 includes a description of Scope 3 emissions, showing a reduction of 12% compared to the previous year, while the emission intensity for Scope 1 and 2 increased slightly. Estimates according to the GHG Protocol are presented, as well as the percentage from primary and estimated data. The report also includes a section dedicated to the value chain, explaining the materiality rationale and the frequency of inventory updates.