Scope 3 Supplier Engagement: What UK SMEs Need to Report

You have received an email from your largest customer's procurement team. They need your "Scope 1 and 2 emissions data" for their sustainability report. The deadline is in three weeks. You are not entirely sure what Scope 1 and 2 means, let alone how to calculate it.

Here is the thing: your emissions data is not just about you. When your customer reports under the EU's Corporate Sustainability Reporting Directive (CSRD), your carbon footprint becomes part of their Scope 3 disclosure. Understanding this relationship is the first step toward handling these requests competently and efficiently.

What Scope 3 means -- and why your data matters to your customer

The Greenhouse Gas Protocol divides emissions into three scopes:

Scope 1: Direct emissions from sources your company owns or controls. Gas boilers, company vehicles, on-site manufacturing processes.
Scope 2: Indirect emissions from purchased electricity, heat, or steam. The power station emits; you consume the energy.
Scope 3: All other indirect emissions across the value chain -- both upstream (supply chain) and downstream (product use, end-of-life).

Scope 3 is divided into 15 categories. The one that matters here is Category 1: Purchased Goods and Services. When your customer buys products or services from you, the emissions associated with producing those products -- your Scope 1 and Scope 2 -- become their Scope 3 Category 1 emissions.

This is not optional for them. Under ESRS E1 (the climate change disclosure standard within CSRD), large companies must report their full Scope 3 footprint. They cannot do that without data from suppliers like you. The same requirement appears in CDP Supply Chain questionnaires, which many multinational buyers also complete.

Put simply: your Scope 1 and 2 is their Scope 3. That is why the requests keep coming.

Why large companies are asking now

Three regulatory drivers have converged. First, the European Sustainability Reporting Standards (ESRS E1) require companies to disclose Scope 3 emissions by category, including Category 1 (purchased goods and services). Wave 1 reporters published in 2026; wave 2 companies are preparing now. Second, over 250 major purchasing organisations use the CDP Supply Chain programme to request climate data from tens of thousands of suppliers worldwide. Third, corporate net-zero commitments require ongoing measurement of supply chain emissions to track progress.

For a fuller picture of how ESRS climate requirements filter down to SME suppliers, see our ESRS for SMEs guide.

What data points are typically requested

The specific questions vary by customer and sector, but most Scope 3 supplier data requests cover the same core areas:

Energy consumption

Total electricity consumption (kWh per year)
Electricity source (grid, renewable tariff, on-site generation)
Gas consumption (kWh per year)
Other fuel use (diesel, LPG, oil -- in litres or kWh)

Greenhouse gas emissions

Scope 1 emissions (tonnes CO2e) -- from fuel combustion, company vehicles, refrigerants
Scope 2 emissions (tonnes CO2e) -- from purchased electricity and heat
Combined Scope 1+2 total
Methodology used (location-based vs market-based for Scope 2)

Business travel

Total distance by mode (car, rail, air) or total spend
Whether company vehicles are included in Scope 1 or reported separately

Waste

Total waste generated (tonnes per year)
Waste diverted from landfill (percentage or tonnes)
Hazardous waste (if applicable)

Freight and logistics

Upstream and downstream transport emissions
Whether transport is included in product-level carbon data

Contextual information

Reporting period (financial year or calendar year)
Methodology statement (which emission factors were used)
Whether figures are measured, estimated, or extrapolated
Any third-party verification or assurance

If you are preparing for a VSME-aligned data request, our VSME data checklist maps these data points to the VSME framework modules.

How to estimate emissions if you do not have exact figures

Most UK SMEs do not have a formal carbon accounting system. That is fine. Buyers know this. What they need is a reasonable estimate using a defensible methodology. There are two main approaches:

Activity-based method (preferred)

This uses actual consumption data -- your energy bills, fuel receipts, mileage logs -- and converts them to CO2e using published emission factors.

The UK Government publishes its Greenhouse Gas Conversion Factors annually (produced by the Department for Energy Security and Net Zero, DESNZ — formerly BEIS/DEFRA, and still widely referred to as the "DEFRA factors"). These give you a CO2e multiplier for virtually every energy source, vehicle type, and waste stream relevant to a UK business. The 2025 factors are freely available on GOV.UK.

A basic calculation looks like this:

Scope 1 (gas): Annual gas consumption in kWh x DEFRA natural gas emission factor = tonnes CO2e
Scope 1 (vehicles): Annual fuel in litres x DEFRA emission factor for fuel type = tonnes CO2e
Scope 2 (electricity): Annual electricity in kWh x DEFRA grid electricity factor = tonnes CO2e (location-based)

For a 50-person office-based business, this calculation takes an afternoon with your utility bills and a spreadsheet. For a manufacturing business with multiple energy sources, allow a few days.

Spend-based method (fallback)

If you genuinely cannot obtain activity data, you can estimate emissions using expenditure. DEFRA and the GHG Protocol provide spend-based emission factors that convert pounds spent on specific categories (e.g. "electricity," "business travel by air") into approximate CO2e.

Spend-based estimates are less accurate than activity-based ones. They are acceptable as a starting point, but your customer will prefer activity-based figures. State clearly which method you used.

Which emission factors to use

For UK businesses, use the DEFRA GHG Conversion Factors for the reporting year in question. These are updated annually and are the standard reference for UK emissions calculations. The key principle is consistency: use the same source and methodology each year so trends are meaningful.

Common mistakes SMEs make

Having reviewed hundreds of supplier emissions responses, certain errors appear repeatedly:

Confusing Scope 1, 2, and 3

Your customer asks for your Scope 1 and 2. You include the emissions from your own suppliers (your Scope 3). This inflates your reported figure and creates double-counting. Report only what you control (Scope 1) and the energy you purchase (Scope 2). Leave your own supply chain emissions out unless specifically asked.

Using wrong or outdated emission factors

The DEFRA factors change annually. Using 2022 factors for a 2025 reporting period introduces inaccuracy and signals that you have not done the work properly. Always match factors to the reporting year.

Not stating your methodology

A number without context is almost useless. Always state: (a) whether figures are measured or estimated, (b) which emission factors you used, (c) what reporting period the data covers, and (d) what is included and excluded. A customer receiving "42 tonnes CO2e" with no methodology statement cannot use that figure confidently.

Mixing reporting periods

Your financial year might run April to March. Your customer reports January to December. If you provide April-March data for a January-December request without noting the mismatch, you create confusion. State your reporting period clearly and offer to pro-rata if needed.

Reporting zero when you mean "not measured"

Zero emissions and unmeasured emissions are not the same thing. If you have not calculated a particular scope, say so. Reporting zero implies you have measured and found no emissions, which is almost never true for an operating business.

Building your Scope 3 response capability

Rather than treating each data request as a one-off exercise, invest a small amount of time in building a reusable emissions dataset:

Gather 12 months of energy bills. Electricity, gas, and any other fuels. This is your raw data.
Calculate Scope 1 and 2 using DEFRA factors. Document your workings so you can update them next year.
Write a methodology statement. Two to three paragraphs explaining what you measured, what factors you used, and what is excluded.
Store the output as a reusable fact. The next customer who asks for Scope 1 and 2 data gets the same figure, the same methodology note, and the same evidence. Consistency builds trust.
Set an annual refresh. Update your calculations when new DEFRA factors are published each year.

This is exactly the kind of repeatable data management that a centralised fact library is designed for. Answer once, reuse many times.

How AnswerVault will help

AnswerVault will allow you to store your emissions data as structured facts within your vault, linked to supporting evidence such as utility bills, DEFRA factor references, and methodology statements. When a customer questionnaire includes Scope 1 and 2 questions, the suggestion engine will surface your pre-approved emissions facts automatically.

You will also be able to track which customers received which version of your data, ensuring consistency across multiple questionnaires.

Try AnswerVault free to get started.

Sources

GHG Protocol Corporate Standard — World Resources Institute and World Business Council for Sustainable Development. A Corporate Accounting and Reporting Standard, Revised Edition 2015. Defines Scope 1, 2, and 3 categories.
GHG Protocol Scope 3 Standard — Corporate Value Chain (Scope 3) Accounting and Reporting Standard, 2011. Defines the 15 categories of Scope 3 emissions, including Category 1: Purchased Goods and Services.
UK Government GHG Conversion Factors 2025 — published by the Department for Energy Security and Net Zero (DESNZ; formerly BEIS/DEFRA). Government Greenhouse Gas Conversion Factors for Company Reporting, 2025. Available at gov.uk.
ESRS E1: Climate Change — Commission Delegated Regulation (EU) 2023/2772, Annex A. Requires disclosure of Scope 1, 2, and 3 emissions including upstream supply chain data.
CSRD Directive — Directive (EU) 2022/2464 of the European Parliament and of the Council, 14 December 2022. Official Journal of the European Union, L 322.

This article provides general guidance for UK SMEs preparing supplier emissions data for customers' Scope 3 reporting. It is not accounting, audit, or legal advice. Specific calculation methodology (boundary-setting, factor selection, dual reporting for Scope 2) should be reviewed against your customer's stated requirements and, where the numbers will be externally assured, with your accountant or auditor. The GHG Protocol Corporate Standard and DEFRA's published conversion factors are the definitive references.