Materiality Checklist

Module three

This checklist will help you to identify any material Scope 3 emissions in your business. If you identify any Scope 3 emissions that you believe to be material to your total emissions and they’re possible to measure, you should include them in your baseline and as part of your reduction target.

Scope 3 emissions beyond our suggested minimum of employee commuting, business travel including accommodation, employees working from home, water usage, waste and purchased goods and services (measured by monetary value) can be extremely difficult to measure and we don’t cover that in this course, but you can use our list of useful organisations to find help with calculating these emissions.

Work through each category, reading through the descriptions to determine what’s material to your business.

Category Description
(from the
Greenhouse
Gas Protocol)		 What this
looks like
for your
business		 Potentially
more than
40% of
total
emissions?
(Y/N)		 Clear
opportunity
for energy
efficiency?
(Y/N)		 Potential
future
resource
or energy
risk in
supply chain?
(Y/N)		 Opportunity
to engage
with key
suppliers and
stakeholders?
(Y/N)
Purchased goods and services Extraction, production and transportation of goods and services or acquired Do you purchase goods that are then resold? For example, raw materials that are processed to make a product. This includes your water utility.
Capital goods Extraction, production and transportation of capital goods (goods that are used in producing other goods) purchased or acquired Do you purchase goods to make products and transport them? Ovens in a bakery, for example.
Fuel and energy related services (not included in Scopes 1 or 2) Extraction, production and transportation of fuels and energy purchased or acquired Do you have any additional fuel or energy related activities that you haven’t covered in your Scopes 1 and 2 reporting? This includes working from home.
Upstream transportation and distribution Transportation and distribution of products purchased by the business between tier 1 suppliers and your own operations (in vehicles and facilities not owned or controlled by you) If you purchase goods which are then transported to your premises, can you account for them?
Waste generated in operations Disposal and treatment of waste generated in your operations (in facilities not owned or controlled by you) Do you produce waste in your workplace? Any waste sent to landfill, to be recycled etc. is included.

If goods are manufactured by third parties, can you account for the waste they produce on your behalf?
Business travel Employees travelling for business-related activities (in vehicles not owned or operated by you) Cars, tubes, trains, buses, taxis etc.
Upstream leased assets Transportation and distribution of products sold by you between your operations and the end consumer (if not paid for by you), including retail and storage (in vehicles and facilities not owned by you) Do you sell products online that are delivered by a distribution partner such as DPD or Yodel?
Processing of sold products Processing of intermediate products sold by downstream companies (e.g. manufacturers) Are your products or parts of products processed by a manufacturer?
Use of sold products End of use goods and services used by you Do the goods you produce use energy (such as electrical items, gas stoves and boilers)?
End-of-life treatment of sold products Waste disposal and treatment of products sold by you at the end of their life Do you produce goods that need disposal (such as consumer food waste, packaging and electrical goods)?
Downstream leased assets Operations of assets owned by you (lessor) and leased to other entities not included in Scopes 1 or 2 – reported by lessor Do you own assets that are leased to others, such as buildings or warehouses?
Franchises Operations of franchises not included in Scopes 1 or 2 – reported by franchisor Does your business run on a franchise basis? Examples of franchised businesses are Starbucks, Snappy Snaps and McDonald’s
Investments Operation of assets owned by you (lessor) and leased to other entities not included in Scopes 1 or 2 – reported by lessor Do you offer pensions? They’re often investments. Or are you a finance company making significant investments? You can now consistently determine the carbon footprint of your investments in SBTi guidance.

This was last updated in October 2021 by Heart of the City. We’ve created these resources for individual SMEs to use. None of our content is to be adapted, reused or repurposed for commercial use.

Climate for SMEs: 4 Steps to Action is funded by the City of London Corporation in support of its Climate Action Strategy targets for a net zero and resilient Square Mile.

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