A Scope 3 category is relevant to you if it meets any one of the GHG Protocol's relevance criteria. Size is one criterion of eight. Test all 15 categories. Record the result and the reason for each one.
What makes a category relevant?
These criteria are in the Scope 3 Standard (2011), Table 6.1, and the Scope 3 Technical Guidance (2013), Table II.
Criterion | The category is relevant if |
Size | It contributes a large share of your expected total Scope 3 emissions |
Influence | You can reduce its emissions, or influence someone else to reduce them |
Risk | It adds to your climate-related risks, such as regulatory, supply chain or reputational risk |
Stakeholders | Customers, suppliers, investors or civil society treat it as critical |
Outsourcing | It is an activity you outsourced, or one that other companies in your sector do in-house |
Sector guidance | Guidance for your sector identifies it as significant |
Spending or revenue analysis | You spend a lot on it, or it earns a lot of revenue |
Other | It meets a criterion that you or your sector set |
A small category can be relevant because of risk, influence or stakeholders.
How does AASB S2 change the test?
Under AASB S2, you consider all 15 categories (B32). You include each category that is material (Appendix D paragraphs 17 and 18). You disclose which categories you include (29(a)(vi)(1)). Materiality is a separate test from relevance. A category can fail one test and pass the other.
We recommend that you include a category if either test puts it in. The reason: one list then meets the GHG Protocol and AASB S2, and you defend one boundary, not two. Where the GHG Protocol calls something optional, the rule under AASB S2 is: include it if it is material.
How does the test come out for Bluegum?
Category | Result | Criteria and reason |
1 Purchased goods and services | Relevant | Size and spending: stock for resale and fabric are about 70% of Scope 3. |
2 Capital goods | Relevant | Spending. Trailhead buys trailers and kayaks every year. |
3 Fuel- and energy-related activities | Relevant | Bluegum buys fuel and electricity. |
4 Upstream transportation and distribution | Relevant | Size and influence. Sea freight from overseas suppliers, and deliveries Bluegum pays for. |
5 Waste generated in operations | Relevant | Influence and stakeholders: packaging and fabric offcuts. |
6 Business travel | Relevant | Spending: buying trips. |
7 Employee commuting | Relevant | Size: staff at the distribution centre, factory and stores. |
8 Upstream leased assets | Relevant | The head office floor, six stores and 12 utes are on operating leases. See Leased premises, vehicles and equipment. |
9 Downstream transportation and distribution | Relevant | Customers who collect in their own trucks. Bluegum does not pay. |
10 Processing of sold products | Does not occur | Bluegum sells finished goods. Nobody processes them further. |
11 Use of sold products | Relevant | Bluegum sells gas canisters and rechargeable headlamps. See below. |
12 End-of-life treatment of sold products | Relevant | Size and stakeholders: packaging and worn-out products. |
13 Downstream leased assets | In Scope 1 and 2 | Trailhead's hire fleet is on operating leases, so under financial control it stays in Scope 1 and 2. See Assets you lease out to others. |
14 Franchises | Relevant | Influence and stakeholders. Four Basecamp stores trade under Bluegum's brand. |
15 Investments | Relevant | The associate, Ridgeline Supply Co, at 25%, and listed shares. The joint venture, Coastline Kayaks, is under joint control, so under financial control Bluegum's 50% share is in Scope 1 and 2, not Category 15. See Joint ventures, associates, investments and franchises. |
"Does not occur" needs a reason, not a size estimate. An activity that exists and that you leave out is an exclusion. See Exclude something and defend the exclusion.
Is transport Category 4 or Category 9?
If you pay for the transport, it is Category 4. This includes delivery of products you sold. Category 9 covers only transport after the sale that you do not pay for. The direction the goods move does not decide it.
Bluegum pays a carrier to deliver to the four franchise stores. That is Category 4, although the goods move outbound. Customers who collect from Dandenong in their own trucks are Category 9.
Is a purchase Category 1 or Category 2?
Follow your own capitalisation policy. The Technical Guidance (Category 2) says so. If finance capitalises the item as property, plant and equipment, it is Category 2. If finance expenses it, it is Category 1. Never count it in both.
Bluegum capitalises items over $1,000. Trailhead's new kayaks at $1,800 each are Category 2. Paddles and life jackets at $150 each are Category 1.
What counts in Category 11?
Direct use-phase emissions are required. They come from products that use fuel or electricity, fuels you sell, and products that release greenhouse gases during use.
Indirect use-phase emissions are optional in the GHG Protocol. They come from products that need energy indirectly, such as a jacket that is washed and dried. Under AASB S2, include them if they are material.
Bluegum product | Use phase | Treatment |
Gas canisters for camping stoves | Direct: the gas burns | Required |
Rechargeable headlamps | Direct: charged from the grid | Required |
Waterproof jackets | Indirect: washing and drying | Optional in the GHG Protocol. Include if material. |
Backpacks and tents | None | Nil |
Bluegum sold 150,000 canisters of 230 g in FY26. That is 34,500 kg of gas. At about 3.0 kg CO2e per kg of gas burned, the canisters add about 104 tCO2e to Category 11.
What if your value-chain data covers a different period?
You can use data from a value-chain entity whose reporting period differs from yours. Examples are an investee, a franchisee, a landlord or a logistics provider. AASB S2 (B19) sets three conditions:
You use the most recent data available without undue cost or effort.
The period is the same length as yours.
You disclose the effect of any significant event between their period end and yours.
Record the period that each figure covers in your boundary document.
What do you disclose about the quality of your Scope 3 data?
AASB S2 (B40) asks you to prioritise direct measurement, data from specific activities in your value chain, timely data that represents your jurisdiction and technology, and verified data.
You disclose the extent to which your Scope 3 figure uses data from specific activities. You also disclose the extent to which it uses verified data (B56). Record the method and the data source for each category, so that you can state both.
Bluegum's Category 14 uses electricity bills from three Basecamp stores. That is data from specific activities. The fourth store is an estimate.
Scope 3 comes into limited assurance in Year 2 of the assurance phase-in (ASSA 5010). From then, your auditor also tests this disclosure.
What this means in Avarni
For ledger spend, the Category on each account in your chart of accounts decides the Scope 3 category. Set accounts that hold capitalised purchases to Capital goods, and expensed purchases to Purchased goods and services. See Chart of accounts: what to include and what to leave out.
Categories 9 to 15 come from product, sales, franchise and investee data, not from your ledger. Load them as activity data (see Upload templates: what each one needs), or one entry at a time with Add emission entry in the Emissions Hub.
Record the result and the reason for all 15 categories in your boundary document. See What goes in your boundary document.