What are Scope 3 emissions?
Scope 3 emissions are the indirect emissions from a company’s value chain, including:
- Purchased goods and services
- Transportation and logistics
- Use of sold products
- End-of-life treatment of products
For many companies, Scope 3 accounts for 70–90% of total emissions, making it a critical focus for sustainability reporting and ESG compliance.
How circular economy practices help
Circular economy principles aim to keep materials in use longer, minimize waste, and reuse resources. Implementing these practices can significantly reduce Scope 3 emissions.
Key strategies include:
1. Material recycling
- Using recycled metals, plastics, or other materials reduces the need for virgin production.
- Example: Recycling steel for construction instead of sourcing new iron ore.
2. Product redesign & lifecycle extension
- Designing products for repair, reuse, or recycling ensures materials stay in circulation.
- Reduces emissions from raw material extraction and production.
3. Supply chain collaboration
- Working with suppliers to adopt circular practices reduces emissions across the value chain.
- Examples: take-back programs, refurbished products, second-life batteries.
The business case for Scope 3 reduction
- Lower operational risks and more resilient supply chains
- Improved ESG and CSRD reporting metrics
- Competitive advantage with environmentally conscious customers
Companies adopting circular economy practices not only reduce emissions but also cut costs and future-proof their operations.
Case study example
A European electronics company implemented a take-back program for used devices.
- Recycled metals were used in new products → raw material demand dropped
- Scope 3 emissions decreased by 20%
- Costs reduced due to lower material purchases
Steps for companies to get started
- Map your supply chain emissions (Scope 3 hotspots)
- Identify circular opportunities: recycling, repair, refurbishment
- Partner with verified sustainability service providers
- Example: Metal Recycling Companies
- Example: Battery Storage Partners
- Track and report improvements for ESG disclosures
Conclusion
Scope 3 emissions are challenging but critical for any company serious about sustainability. By leveraging circular economy principles, companies can:
- Reduce emissions across the value chain
- Lower dependence on virgin materials
- Build a more resilient, cost-effective supply chain
Partnering with verified sustainability companies through our directory makes these solutions actionable and measurable.
👉 Explore our sustainability partners today to start reducing your Scope 3 emissions.
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