Scope 3 emissions: The supply chain challenge for construction manufacturers

What are Scope 3 emissions?

According to the Greenhouse Gas Protocol, emissions are categorised into three scopes. Scope 1 covers direct emissions from owned facilities/vehicles, Scope 2 covers indirect emissions from purchased energy, and Scope 3 includes all other indirect emissions up and down the value chain — everything from the carbon footprint of raw materials and supplier operations to the use of sold products and their disposal. In construction, this includes the CO2 from producing cement and steel, transporting products to site, and even the end-of-life processing of materials. These often invisible emissions are critical: over half of the 50 million tonnes CO2 from UK construction activity is linked to product and materials production (e.g. cement, steel). In other words, for a concrete, steel, insulation or HVAC manufacturer, tackling Scope 3 means tackling the bulk of your carbon impact.

Addressing Scope 3 is not just about corporate responsibility — it’s increasingly a market and compliance issue. Large clients and developers are now assessing the embodied carbon of buildings, which includes the emissions from manufacturing your products. While these may be your Scope 1 and 2 emissions, they form part of your clients’ Scope 3 — and that’s driving demand for low-carbon materials and transparent data like EPDs. Industry initiatives like the proposed Part Z building regulations will require whole-life carbon assessments for projects, meaning manufacturers must provide accurate product carbon data. The UK Green Building Council’s roadmap and the new UK Net Zero Carbon Building Standard already favour projects using environmental product declarations (EPDs) to disclose product impacts. In short, if you supply construction projects, your customers will increasingly ask for your product’s carbon footprint — effectively your Scope 3 emissions from their perspective.

UK policy is shifting to supply chain carbon transparency

Government policy in the UK is pushing suppliers to address Scope 3 emissions. A key example is Procurement Policy Note 06/21 (PPN 06/21), which requires suppliers bidding on large government contracts (>£5m) to publish a Carbon Reduction Plan with their current emissions and net-zero pledge. Notably, PPN 06/21 mandates reporting of Scope 1 and 2 emissions, and a subset of Scope 3 — signalling that even indirect emissions must be measured. The official guidance acknowledges that Scope 3 emissions often represent the majority of an organisation’s total GHG emissions, so it’s logical that future requirements may expand to full Scope 3 reporting. In fact, the UK’s Department for Energy Security and Net Zero ran a call for evidence in 2023 on Scope 3 reporting, exploring making it a mandatory part of carbon disclosures. This aligns with international moves like the upcoming IFRS S2 sustainability standard, which will require companies to report Scope 3 emissions. In practice, construction manufacturers should start preparing for more rigorous reporting — both to comply with possible regulations and to remain competitive.

Beyond regulations, industry standards guide the way. PAS 2080 (BSI’s specification for carbon management in infrastructure) is widely adopted on UK infrastructure projects and emphasises engaging the supply chain to reduce carbon. It shows how collaborative efforts between contractors and material suppliers can yield significant carbon savings — for example, early supplier involvement in design led to a 21% CO2 reduction in a road project by optimising material use. This kind of collaboration often relies on suppliers providing detailed carbon data for their products (another reason to quantify your Scope 3). Many manufacturers are also setting Science-Based Targets, which nearly always entail tackling Scope 3, since you cannot claim to be on a net-zero path while ignoring  upstream and downstream emissions.

How manufacturers can tackle Scope 3 emissions

For construction product manufacturers, addressing Scope 3 emissions means managing the carbon impacts that occur across your entire value chain — beyond your direct operations. This involves two key steps: measuring emissions and implementing strategies to reduce them.

Step 1: Measure your Scope 3 emissions

Begin by mapping where emissions occur throughout your upstream and downstream activities. The GHG Protocol Scope 3 Standard outlines 15 categories of Scope 3 emissions. Not all will be relevant to every company, but construction manufacturers should focus on:

• Purchased goods and services (e.g. cement, steel, insulation materials)
• Fuel- and energy-related activities not already captured in Scope 2
• Upstream transportation and distribution
• Downstream use and end-of-life processing of your products

Tools such as life-cycle assessment (LCA) software can help quantify these emissions. For example, a steel fabricator may calculate:

• The embedded carbon in purchased steel (often available via an environmental product declaration (EPD))
• Emissions from transporting that steel to the factory
• Emissions related to the installation and disposal of the product

According to the UK government’s conversion factor guidance, companies should select calculation methods based on materiality and data availability, focusing on their most significant sources first.

Step 2: Reduce emissions across your supply chain

Once you have mapped your footprint, the next step is to implement targeted reduction strategies. This typically involves collaboration with suppliers, logistics partners, and customers. Effective approaches include:

• Sourcing lower-carbon materials such as cement with reduced clinker or recycled steel
• Optimising transport logistics to reduce freight emissions
• Designing products to use less material and generate less waste
• Offering end-of-life collection or recycling services to customers
• Selecting suppliers committed to their own carbon reduction plans

Many major contractors expect manufacturers to support decarbonisation efforts. Supply chain engagement is a key focus of the UK Construction Playbook, which recommends early collaboration to identify efficiency and carbon-saving opportunities. Manufacturers that can demonstrate measurable reductions — for example, by using bio-based feedstocks or innovative, lower-impact designs — will be better positioned to win contracts and comply with tightening regulations.

Tools and reporting frameworks to help

Managing Scope 3 can be complex, but there are frameworks and tools to assist. On the reporting side, protocols like the GHG Protocol Scope 3 Standard and ISO 14064-1 give guidance on accounting methods. Many companies use CDP (Carbon Disclosure Project) questionnaires to disclose supply chain emissions, and platforms like the Supply Chain Sustainability School provide resources for construction suppliers to improve sustainability literacy. Critically, digital tools can ease the data crunching: for example, One Click LCA’s software streamlines product carbon footprint calculations, enabling manufacturers to quantify cradle-to-gate impacts for their products efficiently. Such tools often have databases of emission factors (e.g. DEFRA conversion factors or EPD datasets) to help estimate categories like transport or material production. By integrating these tools into design or procurement processes, manufacturers can quickly model the impact of alternative materials or suppliers on their Scope 3 footprint.

Finally, transparency is key. Leading manufacturers now publish EPDs for their products (which are basically verified carbon footprints and environmental data), or include Scope 3 details in sustainability reports. This not only prepares you for compliance, but also meets the growing demand from architects and builders for credible, comparable product data. With initiatives like Part Z potentially making whole-life carbon disclosure a requirement, providing an EPD or carbon data could soon be as routine as providing a CE marking or test certificate. 

In summary, tackling Scope 3 emissions is becoming an integral part of being a responsible — and successful — construction product supplier in the UK. By measuring, reporting, and reducing these value chain impacts, manufacturers can meet regulatory demands, win more business, and contribute to the industry’s net-zero ambition.