Scope 3 Target Setting (2025 Playbook): Boundaries, pathways, supplier engagement

---## TL;DRTo set a credible Scope 3 target: define coverage across relevant categories, choose your pathway (absolute, intensity, and/or supplier engagement), calibrate ambition to SBTi criteria, and lock governance for recalculation and tracking. Build quick coverage with spend based data, then upgrade hot spots to activity- and supplier specific data on a plan.---## 1) Do you need a Scope 3 target?SBTi generally expects a Scope 3 near-term target when Scope 3 is a significant share of total emissions (commonly >40%) and requires coverage of a substantial portion of Scope 3 (often around two-thirds). If that describes you, proceed with a formal Scope 3 target; otherwise, document rationale and revisit annually.Quick check (copy/paste table)| Item | Yes/No | Evidence / link || --------------------------------------------------- | ---------- | ------------------- || Scope 3 > 40% of total emissions | | || Target will cover the majority of Scope 3 emissions | | || Baseline year and boundary documented | | || Recalculation policy in place | | |---## 2) Define Scope 3 boundary and coverageMap categories, decide inclusion, and record the calculation method you'll use at baseline vs. your planned upgrade path.Scope 3 coverage register (copy/paste)| Cat. | Name | Included? (Y/N) | Coverage basis (emissions/spend/units) | *Method now (S/A/SS\) | Upgrade plan | Notes || -------- | -------------------------------------- | ------------------- | ------------------------------------------ | ------------------------- | ---------------- | --------- || 1 | Purchased goods & services | | | | | || 2 | Capital goods | | | | | || 3 | Fuel & energy-related | | | | | || 4 | Upstream transport & distribution | | | | | || 5 | Waste generated in operations | | | | | || 6 | Business travel | | | | | || 7 | Employee commuting / WFH | | | | | || 8 | Upstream leased assets | | | | | || 9 | Downstream transport & distribution | | | | | || 10 | Processing of sold products | | | | | || 11 | Use of sold products | | | | | || 12 | End-of-life treatment of sold products | | | | | || 13 | Downstream leased assets | | | | | || 14 | Franchises | | | | | || 15 | Investments | | | | | |- S = Spend-based, A = Activity-based, SS = Supplier-specific---## 3) Pick your target pathway(s)You can set one or combine several. Record your choice and rationale.Pathway options- Absolute reduction target: Reduce covered Scope 3 emissions by [X%] by [Target Year] from a [Base Year].- Intensity target: Reduce emissions intensity (e.g., tCO₂e per revenue, per unit) by [X%] by [Target Year] from [Base Year]. Use guardrails so total emissions trend down despite growth.- Supplier engagement target: Ensure [Y%] of suppliers (by emissions or spend) covering [Z%] of purchased goods & services set SBTi aligned targets within [≤5 years].Decision matrix (copy/paste)| Pathway | Fit for | Pros | Watchouts | Use? || ------------------- | ------------------------------------------ | --------------------------------- | ---------------------------------------- | -------- || Absolute | Mature product mix, reliable activity data | Clear outcome, easy to narrate | Data hungry; sensitive to growth/M and A | || Intensity | Fast-growing output/revenue | Resilient to growth; benchmarking | Must still drive absolute decline | || Supplier engagement | Complex upstream supply, many vendors | Catalyzes systemic change | Needs robust tracking & verification | |---## 4) Establish your baseline year and data quality planUse a representative base year. If some categories are data-poor, start with spend based estimates and schedule improvements.Baseline data plan (copy/paste)| Category | Baseline method (S/A/SS) | Data source(s) | Factor library & vintage | Known gaps | Upgrade by (FY) || ------------ | ---------------------------- | ------------------ | ---------------------------- | -------------- | ------------------- || Cat.1 | | | | | || Cat.4 | | | | | || Cat.11 | | | | | |---## 5) Set ambition and calibrate to SBTiAmbition should align with SBTi criteria for your sector/pathway. Avoid arbitrary round numbers: justify with scenario ranges, peer benchmarks, and internal feasibility.Target builder (absolute or intensity)> [list], [X%], [YYYY], [YYYY], [~two-thirds]> tCO₂e per [metric], [X%], [YYYY], [YYYY], [list]---## 6) Supplier engagement target: design & trackingFor many companies, a supplier engagement target complements absolute/intensity targets by pushing primary data and reductions upstream.Design choices- Coverage definition: Suppliers by emissions (preferred) or spend.- Threshold: Top suppliers covering [≥X%] of Cat.1 and Cat.4 emissions.- Ask: Suppliers to set SBTi aligned targets within [≤5 years] and share progress annually.- Verification: Evidence of target validation or public commitment.Tracking worksheet (copy/paste)| Supplier | Category | Coverage basis (emissions/spend) | % of Cat.1/4 covered | SBTi status (none/committed/validated) | Next milestone | Notes || ------------ | ------------ | ------------------------------------ | ------------------------ | ------------------------------------------ | --------------------------------- | --------- || Supplier A | Cat.1 | Emissions | 18% | Committed | Submit target for validation (Q3) | || Supplier B | Cat.4 | Spend | 9% | None | Onboard to data request (Q2) | |---## 7) From spend based to supplier specific (upgrade path)Move material categories along this ladder:1. Spend-based coverage → 2) Hybrid activity (e.g., ton-km, kWh, mass) → 3) Supplier-specific factors or primary data → 4) Verified initiative impacts (e.g., recycled content, renewable energy, fuel switching).Upgrade tracker (copy/paste)| Category | Current method | Next method | Prerequisites | Owner | Due || ------------ | ------------------ | ----------------- | ---------------------- | --------- | ------- || Cat.1 | Spend | Activity | BOMs for top SKUs | | || Cat.4 | Activity | Supplier-specific | Carrier energy mix | | || Cat.11 | Activity | Supplier-specific | Field performance data | | |---## 8) Guardrails, dependencies, and risk controlsBake these into your policy so targets remain credible and reproducible:- Double-counting controls: Distinguish Cat.3 vs. Scope 1/2 energy; Cat.1 vs. Cat.2 CapEx; Cat.4 vs. internal logistics.- Certificates & market instruments: State treatment (acceptance criteria, geography matching, vintage).- Data vintage/geography: Keep factor vintages consistent within a category; document exceptions.- Scenario analysis: Provide min/mid/max pathways to accommodate demand or product mix changes.- Change management: Align commercial terms (e.g., contract language) to support data sharing and decarbonization requirements without naming specific teams.---## 9) Ready-to-paste target statementsUse these as starting points and replace bracketed fields.Absolute target (example template)> [1, 3, 4, 11], [X%], [FYYYYY], [FYYYYY], [~two-thirds]**Intensity target (example template)> tCO₂e per [revenue/unit], [list], [X%], [FYYYYY], [FYYYYY]Supplier engagement target (example template)> [YYYY+≤5], [≥X%], [1 and 4], SBTi aligned targets---## 10) Monitoring, recalculation, and governanceSet thresholds and a cadence so you can adjust fairly and transparently.Recalculation triggers (text-ready)- Significant structural changes (M and A, outsourcing and insourcing)- Methodology or factor updates that materially shift base year totals- Material data corrections- Boundary changes (entities/facilities newly under control)Materiality thresholds (pick and fix in policy)- Relative: ≥ 5 to 10% change to base year Scope 3 total- Absolute: ≥ [X,000] tCO₂eChange log (copy/paste)| Date | Trigger | Estimated impact (% / tCO₂e) | Decision | Approvers | Notes || -------- | ----------- | -------------------------------- | ---------------- | ------------- | --------- || | | | Recalculate / No | | |RACI (example)| Activity | Sustain. | Finance | Ops | Commercial | Legal | IT/Data | Exec || ---------------------------- | ------------ | ----------- | ------- | -------------- | --------- | ----------- | -------- || Set Scope 3 target | R | A | C | C | C | C | I || Data sourcing & QA | A | R | C | C | | R | I || Supplier engagement tracking | A | C | C | R | | C | I || Recalculation decision | A | R | C | C | C | C | I |(A = Accountable, R = Responsible, C = Consulted, I = Informed)---## 11) FAQs (brief)Can I mix absolute and supplier engagement targets? Yes, many combine an absolute or intensity target with a supplier engagement target to accelerate upstream action without over-relying on modeled data.What if my data quality is weak? Start with spend based coverage, disclose assumptions, and publish an upgrade plan with dates.Do I need FLAG (land-sector) targets? If material to your value chain, plan separately for FLAG in scope and ambition.---## How DitchCarbon helps- Coverage → precision: Rapidly map AP/GL to Scope 3, then upgrade hot spots to activity and supplier specific data on a clear plan.- Supplier engagement tracking: Attribute emissions to top suppliers, track SBTi commitment/validation status, and roll up coverage against your target.- Version-locked factor library: Curated, region-aware factors with vintages and provenance for audit-ready workpapers.- Target & change guardrails: Side-by-side comparisons, materiality thresholds, and a built-in baseline/target change log.- SBTi-ready exports: Paste-ready target statements, factor registers, and methods memos aligned to reviewer expectations.