Understanding the full carbon footprint of your organisation means looking far beyond your own walls. For most companies, the majority of emissions are not found in on-site operations or electricity use, but in the supply chain — classified as Scope 3 emissions. Within Scope 3, two key categories dominate: upstream and downstream emissions.
As regulatory pressure increases and net zero targets approach, distinguishing between these two can make or break your sustainability strategy. In this article, we unpack the differences between upstream and downstream emissions, why they matter, and how your business can get to grips with managing them.
What Are Scope 3 Emissions?
Scope 3 emissions are indirect greenhouse gas emissions that occur throughout a company’s value chain — both before and after its own operations. They are categorised separately from Scope 1 (direct emissions) and Scope 2 (indirect emissions from purchased electricity, steam, heating or cooling).
According to the GHG Protocol, Scope 3 is divided into 15 categories, ranging from purchased goods to the end-of-life treatment of products. For most companies, Scope 3 accounts for more than 70% of total emissions — which is why understanding and managing them is critical to a credible net zero strategy.
Understanding Upstream Emissions
Upstream emissions refer to those generated in the production and delivery of goods and services before they reach your organisation. This includes:
- Purchased goods and services
- Capital goods
- Fuel- and energy-related activities
- Upstream transportation and distribution
- Waste generated in operations
- Business travel
- Employee commuting
- Upstream leased assets
These emissions typically sit within your suppliers’ operations. While you may not directly control them, your purchasing choices and supplier engagement play a major role in reducing them.
Understanding Downstream Emissions
Downstream emissions are those generated after your product or service leaves your hands. These include:
- Downstream transportation and distribution
- Processing of sold products
- Use of sold products
- End-of-life treatment of sold products
- Downstream leased assets
- Franchises
- Investments
These emissions depend heavily on how your products are used and disposed of. They’re particularly important for companies in consumer goods, electronics, or transportation, where usage and disposal can have a large carbon footprint.
Difference Between Upstream and Downstream Emissions
| Aspect | Upstream Emissions | Downstream Emissions |
| When They Occur | Before the product/service reaches your company | After the product/service leaves your company |
| Examples | Raw materials, manufacturing, inbound logistics | Product use, end-of-life disposal, outbound logistics |
| Who Controls Them | Suppliers, contractors | Customers, end users, franchisees |
| Business Levers | Procurement policies, supplier engagement | Product design, consumer guidance, circularity |
| Reporting Challenge | Data from multiple suppliers | Predicting consumer use and disposal behaviours |
Understanding this distinction helps companies focus their efforts — whether that’s redesigning procurement to favour low-carbon suppliers or rethinking packaging and product lifespans for circular economy alignment.
Why the Distinction Matters
Making a clear distinction between upstream and downstream emissions enables smarter decision-making and targeted emissions reduction:
- Strategic Planning: Helps prioritise areas of greatest impact based on the nature of your business.
- Stakeholder Engagement: Demonstrates transparency and credibility in reporting.
- Regulatory Compliance: Supports alignment with evolving ESG disclosure frameworks and net zero reporting expectations.
Companies that understand where their emissions come from can act more decisively — and demonstrate leadership in sustainability.
How to Manage and Reduce Scope 3 Emissions
- Map Your Value Chain: Identify all activities contributing to upstream and downstream emissions.
- Engage Suppliers and Customers: Collaborate to collect data, share expectations, and drive improvement.
- Set Clear Targets: Define measurable reduction goals aligned with science-based targets.
- Track and Report: Use platforms like ClearVUE.Zero to capture, analyse, and report emissions over time.
- Design for Low Carbon: Consider end-to-end emissions in your product design, from materials to end-of-life treatment.
Conclusion
Scope 3 emissions represent both the biggest challenge and the greatest opportunity in climate action. By breaking down upstream and downstream categories, businesses gain a clearer understanding of where carbon is created — and where it can be cut.
In a world where supply chain transparency and accountability are becoming non-negotiable, grasping the full picture of emissions is no longer optional — it’s essential.
Frequently Asked Questions (FAQ)
What are Scope 3 emissions?
Scope 3 emissions are indirect greenhouse gas emissions produced across a company’s value chain. They occur outside the organisation’s own operations and include both upstream and downstream activities.
What is the difference between upstream and downstream emissions?
Upstream emissions occur before a product or service reaches the business. Downstream emissions happen after it has been sold or passed on to the customer.
What are examples of upstream emissions?
Upstream emissions can come from purchased materials or supplier operations. They may also include emissions linked to inbound transport and employee travel.
What are examples of downstream emissions?
Downstream emissions can be produced while a customer uses a product or when it reaches the end of its life. Outbound distribution can also form part of a company’s downstream footprint.
How can businesses reduce upstream and downstream emissions?
Businesses can work with suppliers to improve the quality of their emissions data and encourage lower-carbon practices. They can also reduce downstream emissions by improving product design and considering how products will be used or disposed of.
