Scope 3 emissions for small businesses
8 min read · Updated 5 July 2026
Scope 3 is the part of carbon reporting that makes small businesses nervous. It is the biggest category in principle, it sits outside your direct control, and the full standard runs to fifteen sub-categories. The good news is that a Carbon Reduction Plan does not ask you to measure all of it. PPN 006 names a manageable subset, and for most SMEs those can be estimated with data you already have. This guide shows what you actually need and how to approach it without getting overwhelmed.
Quick answer
For a PPN 006 Carbon Reduction Plan, SMEs report five Scope 3 categories rather than all fifteen. Use the best activity data you have, state assumptions clearly, and improve the data in later annual updates.
What Scope 3 is
Scope 3 covers emissions that happen because of your business but from sources you do not own or control: your suppliers, your staff travelling, the waste you produce, the goods moving to and from you. It sits alongside Scope 1 and Scope 2, which cover what you burn directly and the energy you buy. Scope 3 is where most of a typical company’s real-world impact lives, which is why it gets so much attention, but you do not have to boil the ocean to satisfy a plan.
The categories PPN 006 asks for
Rather than all fifteen categories, a compliant plan requires five that most suppliers can reasonably work out:
- Business travel, such as flights, rail and mileage claims for staff using their own cars.
- Employee commuting, the daily journeys to and from work.
- Waste generated in operations, split by how it is disposed of.
- Upstream transportation and distribution, goods coming in to you.
- Downstream transportation and distribution, goods you send out.
Focus your effort here. The other Scope 3 categories can be noted as out of scope for now, which is a normal and acceptable position for a smaller organisation.
A workflow that stops the anxiety
Data gaps stop feeling like a crisis once you treat each category as the same five-step exercise. You are not trying to reach perfect numbers this year; you are building a documented method you can improve annually.
The last step matters more than it looks. A plan that says “commuting estimated from headcount and average distance; a staff travel survey is planned for next year” reads as a business in control of its data. It also makes next year’s update dramatically easier, because the method is already written down.
What each category looks like in practice
Business travel
Everything staff do in vehicles you do not own: flights, rail, taxis, hire cars and grey-fleet mileage claims. Your accounts system already holds most of it. Pull a year of expense claims, total the mileage claims separately from the ticketed travel, and convert each mode with its own factor. A ten-person consultancy might land somewhere around a few tonnes a year, dominated by one or two flights.
Employee commuting
The daily journeys to and from your normal workplace. The pragmatic method: one-way distance and usual mode per person, doubled, multiplied by working days, adjusted for home working. A five-question survey lifts this from assumption to evidence. Remember hybrid patterns: two office days a week roughly cuts the commuting figure by 60 percent compared with full-time attendance.
Waste generated in operations
What leaves your bins, split by route: landfill, recycling, incineration, food waste. Waste contractors can usually produce a tonnage report on request; if not, bin count, size, collection frequency and a typical fill level give a defensible estimate. For an office this is often the smallest figure in the plan; for trades and manufacturing it can be significant.
Upstream transportation and distribution
The movement of goods into your business by vehicles you do not own: supplier deliveries, inbound couriers, materials to site. Count the deliveries, estimate the typical distance and vehicle type, and convert. If suppliers deliver to many customers on one round, a share of the journey is a fair basis; say that is what you did.
Downstream transportation and distribution
The same idea in the other direction: goods you sell or send onward via couriers, hauliers or postal services. Parcel counts from your courier account plus average distance and mode is a sound starting method. If you sell services only and ship nothing, this category is genuinely not applicable, and you should say so rather than inventing a number.
Getting the data as a small business
You almost certainly already hold most of what you need:
- Expense claims and travel bookings give you business travel.
- A short staff survey, or postcodes and typical travel modes, gives you commuting.
- Waste transfer notes or your waste contractor’s reports give you waste.
- Delivery and courier records, or supplier information, give you transport.
Where exact figures are hard to find, a reasonable estimate is acceptable as long as you say it is an estimate and explain how you arrived at it. Honesty about method matters more than false precision.
Business travel
Ideal: booking records with distances
Good enough: expense claims and mileage totals for the year
Employee commuting
Ideal: a staff travel survey
Good enough: headcount, average one-way distance and typical travel mode, times working days
Waste
Ideal: contractor tonnage reports by route
Good enough: number and size of bins, collection frequency, typical fill level
Upstream transport
Ideal: supplier delivery data
Good enough: count of deliveries, typical distance and vehicle type
Downstream transport
Ideal: courier or haulier records
Good enough: parcels or consignments sent, average distance and mode
When a category genuinely does not apply
Some businesses have real nils. A fully remote software company may have no commuting in the usual sense and no goods moving in either direction. The rule is simple: never leave the row blank. Write a short statement of why the category does not apply, for example “all staff work from home and the company has no premises, so employee commuting is not applicable”, and revisit it each year in case the answer changes. A stated nil with a reason is compliant. A blank invites the assessor to assume you forgot.
Estimate, do not agonise
The single most useful mindset for Scope 3 in a small business is to estimate sensibly and move on. A plan that reports the required categories with clearly stated assumptions is compliant. A plan that leaves a required category blank because the data was not perfect is not. Assessors understand that a small supplier cannot measure its supply chain to three decimal places; what they want is a genuine, methodical attempt.
A better estimate beats a blank
If a required category applies to your business, do not leave it empty because the data is imperfect. Use a reasonable method, label it as estimated, and keep the note so you can improve the same category next year.
Frequently asked questions
Do small businesses need all 15 Scope 3 categories?
No. For a PPN 006 Carbon Reduction Plan, only five Scope 3 categories are required: upstream transportation and distribution, waste generated in operations, business travel, employee commuting, and downstream transportation and distribution. The other ten can be noted as out of scope, which is a normal position for an SME.
Can Scope 3 be estimated?
Yes. Estimation is expected, not just tolerated, especially for commuting and transport. The requirement is that estimates are reasonable and the method is stated: what data you used, what you assumed, and how you converted it. A labelled estimate is compliant; an unexplained number or a blank is what fails.
What if a Scope 3 category does not apply?
Say so explicitly rather than leaving it blank. A one-line statement such as "The company sells services only and ships no physical goods, so downstream transportation and distribution is not applicable" shows the assessor you considered the category. A blank looks like an omission; a stated nil looks like a decision.
How do I estimate employee commuting?
The simplest defensible method: ask each employee, or assume from postcodes, their one-way distance and usual travel mode. Multiply distance by two, by working days per year (usually 220 to 230, less for hybrid working), then by the conversion factor for that mode. Sum across staff. A five-question survey makes this considerably more accurate.
What records help with business travel and transport?
For business travel: expense claims, mileage claim forms, rail and flight booking confirmations, hire car invoices and fuel receipts. For transport: courier and haulier invoices, delivery notes, parcel counts from your postage account, and supplier delivery schedules. Most of this already sits in your accounts system.
Turning activity into figures
Once you have the activity data, each item is converted to emissions using the current UK Government conversion factors, the same way as Scope 1 and 2. This is where an automated tool earns its keep, because it holds the right factors and applies them for you. Carbon Sorted asks plain questions about your travel, commuting, waste and transport, computes the Scope 3 figures from your answers, and folds them into the plan alongside everything else. You can start from the compliant template and preview a section free on your own data, or follow the full step-by-step writing guide to see where these figures land in the finished plan.
Practical next step
Use this checklist to gather the five Scope 3 categories PPN 006 asks SMEs to report.
Download the Scope 3 data checklistReviewed for accuracy
Written by the Carbon Sorted editorial team and reviewed against current UK procurement and carbon-reporting guidance. Last reviewed 5 July 2026.
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