What is scope 3 in simple terms?

Scope 3 covers all the CO2 emissions a company doesn't cause directly itself, but that result from its activities — for example, emissions at suppliers who provide raw materials or services. For most companies, this is the largest emissions category.

Do I need to produce my own scope 3 report as an SME supplier?

No. As an SME, you don't need to produce a CSRD report or scope 3 analysis yourself. Your client only needs your own scope 1 and 2 data (energy use, fuel consumption) to calculate their own scope 3 category 1.

Why is my energy use relevant to my client's scope 3?

Your energy use and direct emissions form the basis your client uses to calculate how much CO2 is associated with what they buy from you. If they don't get that data from you directly, their system falls back on a generic industry estimate, which is often much higher than the actual figure.

Is filling in a VSME profile the same as scope 3 reporting?

Not exactly, but a VSME profile does provide the exact data points (energy, emissions, fuel use) a client needs to substantiate their scope 3 category 1 with primary rather than estimated data.

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16 June 20266 min read

Scope 3 emissions explained: why your client is asking for this data

When a buyer asks about your energy use or CO2 emissions, it's rarely curiosity. That buyer needs those figures for their own sustainability reporting — specifically, for something called "scope 3". Once you understand what scope 3 is, it immediately becomes clear why these questions keep getting more frequent and more specific.

The three scopes of the GHG Protocol

The Greenhouse Gas Protocol, the international standard behind all CO2 accounting (including under CSRD/ESRS E1), splits emissions into three scopes. Scope 1 is direct emissions from a company's own sources, such as company vehicles or an on-site boiler. Scope 2 is indirect emissions from purchased electricity and heat. Scope 3 is all other indirect emissions across the value chain — from the raw materials a company buys to the transport, use, and disposal of its products.

Why scope 3 is so large

For most companies — especially in manufacturing, construction, logistics and retail — 70 to 90% of the total carbon footprint sits in scope 3, outside the company's own walls. Under ESRS E1, CSRD-obligated companies must report on this if it's a material category, and scope 3 almost always is. Without reliable data from suppliers, a large company simply cannot substantiate its own scope 3 figure.

Where you fit in as a supplier

Scope 3 is made up of fifteen categories. For most suppliers, category 1 (purchased goods and services) is the relevant one: your revenue from that client is, for them, a purchase — and therefore scope 3. If you provide transport, you may also fall under category 4 (upstream transportation). Your energy use, fuel consumption, and (to a lesser extent) waste and water use are the building blocks your client uses to calculate their scope 3 category 1.

What your client actually needs

There are two ways to calculate scope 3 category 1: spend-based (your invoice amount × a generic industry emission factor) or based on your own, actual emissions data. The second method is far more accurate and counts as "primary data" — the highest quality tier. Every euro a client spends with you that they can back with your own figures instead of an industry average directly improves their data quality. That's exactly why clients are increasingly asking for your VSME profile: it gives them usable, traceable scope 3 data instead of a rough estimate.

Frequently asked questions

What is scope 3 in simple terms?: Scope 3 covers all the CO2 emissions a company doesn't cause directly itself, but that result from its activities — for example, emissions at suppliers who provide raw materials or services. For most companies, this is the largest emissions category.
Do I need to produce my own scope 3 report as an SME supplier?: No. As an SME, you don't need to produce a CSRD report or scope 3 analysis yourself. Your client only needs your own scope 1 and 2 data (energy use, fuel consumption) to calculate their own scope 3 category 1.
Why is my energy use relevant to my client's scope 3?: Your energy use and direct emissions form the basis your client uses to calculate how much CO2 is associated with what they buy from you. If they don't get that data from you directly, their system falls back on a generic industry estimate, which is often much higher than the actual figure.
Is filling in a VSME profile the same as scope 3 reporting?: Not exactly, but a VSME profile does provide the exact data points (energy, emissions, fuel use) a client needs to substantiate their scope 3 category 1 with primary rather than estimated data.

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