Indirect Emissions
Indirect emissions are greenhouse gases that result from an organisation's activities but occur at sources owned or controlled by another entity. Under the GHG Protocol, they are divided into Scope 2 (purchased energy) and Scope 3 (all other value chain emissions).
What is Indirect Emissions?
Indirect emissions are greenhouse gases caused by an organisation's activities but released at a location or source outside its ownership or operational control. They are distinguished from direct (Scope 1) emissions, which occur at the organisation's own facilities.
The GHG Protocol divides indirect emissions into two scopes. Scope 2 indirect emissions come from the generation of purchased electricity, steam, heating, and cooling. The emissions occur at the power station or energy facility, not at the organisation's premises, but the organisation is responsible because its energy demand drives the generation. Scope 3 indirect emissions cover everything else in the value chain — from the extraction of raw materials by suppliers through to the use and disposal of sold products by customers.
For most organisations, indirect emissions far exceed direct emissions. A typical office-based company might find that Scope 1 represents 5–10% of its total footprint, Scope 2 represents 10–20%, and Scope 3 represents 70–85%. Even for energy-intensive manufacturers, Scope 3 (particularly purchased goods and services) often dominates.
The challenge with indirect emissions is data access. Scope 2 is relatively straightforward — electricity and energy bills provide the activity data, and grid emission factors are published annually. Scope 3 is far more complex because the data sits with suppliers, customers, employees, and logistics providers. Organisations typically start with spend-based estimates and progressively improve data quality.
Indirect emissions are increasingly subject to mandatory reporting. Scope 2 is required under SECR, the GHG Protocol, CSRD, CDP, and ISSB. Scope 3 is required under CSRD, PPN 06/21 (for relevant categories), and SBTi target-setting. Even where not legally mandated, investors and customers increasingly expect comprehensive indirect emissions disclosure.
Practical Examples
A company's Scope 2 indirect emissions come from 2,000,000 kWh of grid electricity consumed annually — the CO₂ is emitted at the power station, not at the company's offices, but the company reports it because its demand drives the generation.
A retailer's Scope 3 indirect emissions include the embedded carbon in every product it sells (Category 1), the freight transport to its distribution centres (Category 4), and the emissions from customers driving to its stores (Category 9).
An IT company finds that 90% of its total footprint is indirect: Scope 2 from data centre electricity and Scope 3 from purchased hardware, cloud hosting, employee commuting, and end-of-life disposal of sold devices.
How Climatise Helps
Climatise calculates both categories of indirect emissions — Scope 2 from your energy data and Scope 3 across all 15 categories from procurement, travel, and operational data. The platform clearly separates direct and indirect emissions in your reports for transparent disclosure.
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