Scope 3 Category 1: Purchased Goods
Category 1 (purchased goods and services) is typically the largest Scope 3 category for manufacturers, retailers, and food companies — often representing 50–80% of total corporate emissions. It is also the hardest to measure accurately and the most demanding in terms of supplier engagement.
Category 1 (purchased goods and services) is typically the largest Scope 3 category for manufacturers, retailers, and food companies — often representing 50–80% of total corporate emissions. Category 1 covers the cradle-to-gate emissions associated with all goods and services purchased by the reporting company — everything from raw materials and components to professional services, IT subscriptions, and office supplies.
What Category 1 covers
Category 1 covers the cradle-to-gate emissions associated with all goods and services purchased by the reporting company — everything from raw materials and components to professional services, IT subscriptions, and office supplies.
Cradle-to-gate boundary means: extraction of raw materials, processing, manufacturing, and transport to the point of purchase by your company. Emissions after you take ownership (your use and disposal of the purchased goods) are counted in your own Scope 1, 2, and other Scope 3 categories.
For a car manufacturer: Category 1 includes the steel, aluminium, glass, plastics, and electronics used in vehicle assembly — plus the services purchased (consulting, software, cleaning). The emissions from running the factory are Scope 1 and 2. The emissions from customers using the cars are Category 11 (use of sold products).
Category 1 does not include capital goods (Category 2) — physical assets with a useful life exceeding one year. Raw materials and consumables used in production are Category 1; machinery, buildings, and equipment are Category 2.
The three calculation methods — accuracy vs effort tradeoff
Spend-based method: Multiply supplier spend in each procurement category (€ or $) by an EEIO emission factor (kg CO2e per € of spend in that category). Accuracy: ±50–100%. Data required: procurement spend by category. Time to implement: weeks. Best for: initial screening, immaterial categories, services.
Average-data method: Multiply the quantity of goods purchased (kg, tonnes, units) by an industry-average emission factor (kg CO2e per kg of product). Accuracy: ±20–50%. Data required: purchase volumes by material type. Time to implement: 1–3 months. Best for: material commodities where physical quantity data is available.
Supplier-specific method: Use actual GHG emission data reported by individual suppliers, divided by the quantity supplied. Accuracy: ±5–15%. Data required: supplier GHG disclosures, CDP supply chain responses, or bilateral data requests. Time to implement: 6–18 months for programme establishment. Best for: top suppliers by spend and emission intensity.
For ESRS E1-6: disclose the percentage of Category 1 calculated using each method. Assurers will check consistency between methods used and the data quality claims made.
Building a supplier engagement programme for Category 1
Moving from spend-based to supplier-specific methodology requires a systematic supplier engagement programme — typically the most significant investment in a corporate Scope 3 programme.
Tier 1 prioritisation: Identify your top 20–30 suppliers by spend (who typically represent 70–80% of Category 1 emissions) as priority engagement targets. These suppliers receive direct data requests, bilateral engagement, and support to report through CDP Supply Chain or bilateral channels.
Data request content: At minimum, request suppliers' total Scope 1 and 2 GHG emissions and their annual revenue — this allows calculation of an emission intensity (kg CO2e per € revenue) more specific than generic EEIO factors. Ideally, request product-level emission factors (kg CO2e per kg or unit of product supplied) for your key purchased inputs.
CDP Supply Chain: CDP operates a supply chain programme where large companies (members) send standardised questionnaires to their suppliers through the CDP platform. Supplier responses are standardised and comparable. Over 26,000 suppliers responded to CDP Supply Chain requests in 2024. If your largest suppliers are already CDP reporters, their public disclosures are available without bilateral engagement.
Contractual levers: Include supplier GHG data provision requirements in new supplier contracts. Some companies make CDP Supply Chain participation a tender qualification criterion. SBTi target-setting by key suppliers is increasingly included in supplier scorecards and preferred supplier programmes.
Frequently asked questions
How do we calculate Category 1 for services (consulting, legal, IT)?
Services are almost always calculated using the spend-based method — there is no meaningful physical unit for 'one hour of legal advice'. Use EEIO factors for the relevant service sector. Services typically have low emission intensity compared to physical goods, so spend-based accuracy (±50%) is usually sufficient for materiality purposes.
Do we include Category 1 emissions from our subsidiaries' purchases?
Yes — Category 1 covers all goods and services purchased across your organisational boundary (operational control or equity share, consistent with your corporate GHG inventory boundary). Subsidiary procurement is included. Intercompany purchases within the boundary should be excluded to avoid double counting.
What is the SBTi supplier engagement target for Category 1?
SBTi accepts a supplier engagement target as a supplementary Scope 3 target for Category 1: a commitment that a specified percentage of your Category 1 suppliers (by spend) will have their own SBTi-validated targets by a specified year. A common formulation is '67% of suppliers by spend will have SBTi targets by 2027'. This complements rather than replaces an absolute Category 1 reduction target.