Scope 1 is what you burn. Scope 2 is what you buy as electricity. Scope 3 is everything else your business causes — upstream in what you purchase and downstream in what you sell — and for most companies it dwarfs the other two combined.
A manufacturer’s raw materials, a bank’s lending, a retailer’s purchased goods, a telecoms operator’s handset supply chain: these are Scope 3, and they are typically where the great majority of a company’s climate impact and climate risk actually sits.
This creates an uncomfortable asymmetry. The part of your footprint you control directly is small and easy to measure. The part that matters is large, sits in other people’s operations, and has to be obtained by asking.
Defined by the GHG Protocol Corporate Value Chain (Scope 3) Standard. The relevance column is a general Nigerian pattern, not a substitute for your own materiality assessment.
| # | Category | Typical Nigerian relevance |
|---|---|---|
| 1 | Purchased goods and services | High — usually the largest upstream category |
| 2 | Capital goods | Medium — spikes in years with major capex |
| 3 | Fuel and energy activities not in Scope 1 or 2 | Medium — includes grid transmission and distribution losses |
| 4 | Upstream transportation and distribution | High — long inland distances, fragmented logistics |
| 5 | Waste generated in operations | Low to medium — data quality is usually the constraint |
| 6 | Business travel | Low to medium — easy to collect, rarely material |
| 7 | Employee commuting | Low — often excluded with a stated reason |
| 8 | Upstream leased assets | Situational |
| 9 | Downstream transportation and distribution | High for manufacturers and FMCG |
| 10 | Processing of sold products | High for upstream oil and gas, and for raw material producers |
| 11 | Use of sold products | Very high for fuels, vehicles and energy-consuming goods |
| 12 | End-of-life treatment of sold products | Low to medium |
| 13 | Downstream leased assets | Situational |
| 14 | Franchises | Situational |
| 15 | Investments | Dominant for banks, insurers and pension operators |
You are not required to report every category. You are required to report those that are material and to explain the basis for excluding others.
The standard advice — send your suppliers a questionnaire — has a poor success rate anywhere, and a worse one in a market where most suppliers have never been asked. The failure is usually in the ask rather than in the supplier.
What works better: ask a small number of your largest suppliers for a small number of specific things. Not “please complete our ESG questionnaire” but “how many kilowatt-hours of electricity and how many litres of diesel did your facility consume last year, and can you attach a bill”. Those are questions a finance or operations manager can answer in an afternoon.
Explain why you are asking and what happens if they do not answer, honestly. Increasingly the honest answer is that you will have to estimate their emissions from what you spend with them, and the estimate will probably be worse for them than their real figure. That is a more effective motivator than a compliance framing.
And ask in your procurement cycle, not outside it. A data request attached to a renewal gets answered; a data request sent by the sustainability team in isolation frequently does not.
| Spend-based estimate | Supplier-specific data | |
|---|---|---|
| How it works | Money spent in a category, multiplied by an average emissions intensity for that category | The supplier’s actual activity data, allocated to what you bought |
| Effort | Low — your purchase ledger already has it | High — requires the supplier to co-operate |
| Accuracy | Poor at the individual supplier level, acceptable in aggregate | Good, and improves with the relationship |
| Shows reduction? | No — spending less looks like emitting less | Yes — a supplier’s genuine improvement shows up |
| When to use it | Year one, immaterial categories, and the long tail of small suppliers | Material categories and your largest suppliers, from year two |
IFRS S2 gives relief from Scope 3 in the first annual reporting period. Here is what to have by the end of it.
Spend-based estimation, disclosed as such, with a description of the constraint. This is a legitimate and common position in Nigerian supply chains and the standards accommodate it. What is not acceptable is omitting the category silently because the data was hard.
Only if that is genuinely true, which is rare, and you would need to show the assessment that led there. For most companies Scope 3 is the majority of the footprint, and a blanket immateriality claim invites exactly the scrutiny you are trying to avoid.
Not for the integrity of your own inventory. Your Scope 3 is someone else’s Scope 1, by design — the value chain is counted more than once across the economy and that is how the framework is meant to work. What matters is that you do not double count within your own boundary.
Accurate enough to be useful and honest about its own limits. A figure labelled as a spend-based estimate with the method disclosed is a good year-one disclosure. A precise-looking figure with no stated basis is a worse one, however careful the arithmetic behind it.
A summary of a regulation is not the regulation. These are the primary documents this page is based on.
Four questions, and you get the year you first file, the framework, and what to collect first.
Plain-language explainers of the FRC and SEC rules, ISSB S1 & S2, and what each asks you to disclose.
What a consultant-led reporting cycle costs against an annual licence, in Naira.
