- What Counts (and What Doesn't) in Your Scope 3 Emissions for SBTi?
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Mastering Scope 3: Navigating SBTi Compliance with GGS Impact
For most global organizations, the true climate challenge lies beyond their direct control. Scope 3 emissions—those generated across the value chain—often represent 70% to 90% of a company’s total footprint. At GGS Impact, we help businesses cut through the complexity of the Science Based Targets initiative (SBTi), ensuring your decarbonization strategy is scientifically robust, globally compliant, and ready for investor scrutiny
Defining the Global Benchmark: Science-Based Targets (SBTi)
Science-based targets provide a clearly defined pathway for companies to reduce greenhouse gas emissions in line with the 1.5°C limit of the Paris Agreement. With over 9,000 companies globally committed as of 2025, the SBTi framework is the definitive standard for corporate climate action.
- The SBTi Corporate Net-Zero Standard centre’s on two core components:
- Near-term Targets: Immediate, aggressive reductions over 5–10 years.
Long-term Net-Zero Targets: Achieving a minimum 90% absolute reduction by 2050, with only residual emissions neutralized through carbon removals.
Scope 3 in Practice: Beyond Your Four Walls
Scope 3 encompasses 15 categories of indirect emissions occurring both upstream and downstream. For manufacturers and service providers alike, the heaviest hitters usually include:
- Upstream: Purchased goods and services, capital goods, and fuel/energy-related activities.
- Downstream: The use of sold products, end-of-life treatment, and distribution.
At GGS Impact, we specialize in transforming these complex categories into a decision-ready inventory that meets the rigorous requirements of the GHG Protocol.
The SBTi Rules: What is Expected?
To achieve SBTi validation, your Scope 3 strategy must meet three critical criteria:
- The 40% Rule: If Scope 3 accounts for 40% or more of your total emissions (which is true for the vast majority of companies), setting a Scope 3 target is mandatory.
- Coverage Thresholds: Near-term targets must cover at least 67% of relevant Scope 3 emissions. Long-term Net-Zero targets must address 90%.
- Data Evolution: While you may start with spend-based estimates, the SBTi expects a shift toward high-quality, supplier-specific primary data over time.
What "Counts" Toward Your Target?
SBTi is strict about what constitutes a valid reduction.
- Full Value Chain Boundary: You must include all purchased services (IT, marketing, professional services), not just raw materials.
- Downstream Impacts: For energy-intensive products, the “use phase” is non-negotiable and often represents the largest portion of the footprint.
- Supplier Engagement: A key strategy involves requiring your Tier-1 suppliers to set their own science-based targets.
What Does NOT Count?
To maintain scientific integrity, the SBTi excludes certain shortcuts:
- Avoided Emissions: While low-carbon products are great for the planet (the “handprint”), they cannot be used to offset your actual Scope 3 inventory (the “footprint”).
- Carbon Credits: Offsets cannot be used to meet interim reduction targets. They are only permitted to neutralize the final 10% of residual emissions once deep decarbonization is achieved.
- Double Counting: Intra-group transactions within a corporate structure must be neutralized to show a consolidated, accurate footprint.
The Strategic Path Ahead
In the global marketplace, Scope 3 is where corporate credibility is won or lost. As regulators and investors demand higher transparency, treating value-chain emissions as a strategic priority is essential for risk management and innovation.
GGS Impact provides the technical expertise and scientific rigor to help you model reduction pathways and design Scope 3 strategies that meet the world’s highest standards.
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