Scope 3 in Plain English

What it is, why it's hard, and how to do it without getting stuck

Scope 3, Made PracticalCoreGuide12 min

What you'll accomplish

  • Understand what Scope 3 is (and isn't) in plain English
  • Learn the only approach that works in the real world: screen → focus → improve
  • Know which categories matter most for real estate
  • Avoid common mistakes (paralysis, double counting, proxy forever)
  • Have templates for a Scope 3 starter plan and a data quality ladder

Who this is for

Sustainability teams

Starting Scope 3

Finance and Ops teams

Supporting data collection

Procurement teams

Engaging suppliers

Anyone

Overwhelmed by "15 categories"

When to use this

Use this when:

  • •Leadership asks for Scope 3 and you don't know where to start
  • •You need a beginner-safe explanation for internal stakeholders
  • •You want a plan that produces value in weeks, not quarters

The simplest definition

Scope 3 = emissions that happen in your value chain (upstream and downstream), outside your direct Scope 1 and Scope 2.

In real estate, Scope 3 often includes:

  • Cat 1Service vendors and purchased services
  • Cat 2Capital projects
  • Cat 3Upstream fuel/energy activities
  • Cat 4Transport of goods (sometimes smaller)
  • Cat 5Waste
  • Cat 8 & 13Leased assets (depending on your role)

Beginner rule: Your first Scope 3 deliverable is a prioritized shortlist, not "perfect emissions."

The only approach that works: screen → focus → improve

1

Screen

2 weeks

Use spend/activity proxies to estimate which categories/suppliers likely matter most.

Output:

  • •Top categories (2–4)
  • •Top suppliers (top 10–25)
  • •A plan to improve data quality
2

Focus

next 30–90 days

Pick 2 categories to improve first and 5–10 suppliers to engage.

3

Improve

ongoing

Upgrade data quality over time: spend-based → activity data → supplier-specific methods.

The data quality ladder (be honest, then improve)

Measured

Direct activity data (kWh, gallons, tons, miles) with evidence

Allocated

Derived from a known total using documented rules

Proxy

Estimates using averages or spend factors (temporary)

Unknown

You don't have enough to estimate (log it)

Beginner rule: Proxy is allowed at the start — but you must track a plan to replace it.

Templates included

Template 1 — Scope 3 Starter Plan (copy/paste)

Scope 3 Starter Plan

Goal for the next 2 weeks:
- Produce a screening shortlist: top categories + top suppliers

Inputs we will use:
- AP spend by vendor (last 12 months)
- Vendor categories (service type / capex / waste)
- Utility dataset (for Cat 3 support)
- Lease/tenant utility responsibility map (for leased assets)

Outputs:
- Top 3 categories by estimated impact
- Top 10 suppliers by impact and feasibility
- 90-day improvement plan

Risks:
- Missing vendor categorization
- Tenant utility data access
- Evidence link gaps

Owners:
- Screening owner:
- Procurement owner:
- Data owner:

Template 2 — Data Quality Tracker (copy/paste)

| Category | Supplier | Current quality (Measured/Allocated/Proxy/Unknown) | What data we need next | Owner | Target date |
|---|---|---|---|---|---|

Common pitfalls

  • ✗Trying to collect perfect data for all categories at once
  • ✗Starting supplier engagement without a vendor inventory
  • ✗Confusing Scope 2 data quality problems with Scope 3 scope problems
  • ✗Double counting tenant energy and allocations
  • ✗Never improving proxies (proxy forever)

How to prove impact

Shortlist in 2 weeks

You produced a prioritized list quickly

1–2 categories improved in 90 days

Moved from proxy to better data

Proxy share shrinks

Quarter over quarter improvement

Supplier response rate

Increases over time

Evidence and Confidence

Confidence:High(framework is stable)

Assumptions: You can access AP spend and basic vendor categorization.

Where this can fail: If you skip screening and jump straight into data collection.

Change log

v1.0 (2026-01): Latest release