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Scope 3 Target Setting (2025 Playbook): Boundaries, pathways, supplier engagement
Growth Marketer
Howden manages Scope 3 PG&S emissions across 55 countries with DitchCarbon.
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TL;DR
To 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 Coverage
Map 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 | 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 |
| Pathway | Fit for | Pros | Watchouts | Use? |
|---|---|---|---|---|
| Absolute | Mature product mix, reliable activity data | Clear outcome, easy to narrate | Data hungry; sensitive to growth/M&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 Plan
Use 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 SBTi
Ambition 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):
| Supplier | Category | Coverage basis | % of Cat.1/4 covered | SBTi status | 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) |
6) Supplier Engagement Target: Design & Tracking
For 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) -
| 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 |
7) From Spend Based to Supplier Specific (Upgrade Path)
Move material categories along this ladder:
- 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) -
| Date | Trigger | Estimated impact (% / tCO₂e) | Decision | Approvers | Notes |
|---|---|---|---|---|---|
| Recalculate / No |
8) Guardrails, Dependencies, and Risk Controls
Bake 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 Statements
Use 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 Governance
Set 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] tCO₂e
Change log (copy/paste) -
| 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 |
RACI (example) - (See Table 8 below.)
(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.
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