UK SRS · Scope 3
Scope 3 reporting under UK SRS: the relief, the 15 categories, the data
Scope 3 reporting under UK SRS means disclosing value-chain greenhouse gas emissions under paragraph 29 of UK SRS S2, having considered all 15 GHG Protocol categories.
For listed companies, the FCA’s final rules in PS26/19 give one year of relief from initial application, then put Scope 3 on the same comply-or-explain basis as every other UK SRS disclosure.
The relief is from disclosure, not from measurement, so the data work starts before it ends.
What the standard asks
What UK SRS S2 requires for Scope 3
Paragraph 29(a)(i) of UK SRS S2 requires absolute gross greenhouse gas emissions for the period, in metric tonnes of CO₂ equivalent, classified as Scope 1, Scope 2 and Scope 3.
For Scope 3, ¶29(a)(vi) adds two things: the categories included in the figure, and, for asset management, commercial banking or insurance, information about financed emissions.
Paragraph B32 then says the entity “shall consider all 15 categories” of the Scope 3 Standard and disclose which it includes.
The obligation is gross emissions: nothing in ¶29 lets a company net Scope 3 off against carbon credits or avoided emissions.
How Scope 3 fits the rest of the climate standard is on UK SRS S2 climate disclosures, and the combined requirements on UK SRS requirements.
The three scopes defined from the start are on Scope 1, 2 and 3 emissions.
| Instrument | Scope 3 position |
|---|---|
| GHG Protocol Corporate Standard (2004) alone | Optional reporting category |
| GHG Protocol Scope 3 Standard (2011) | Account for all Scope 3; disclose and justify exclusions |
| UK SRS S2 | Gross Scope 3 required; all 15 categories considered; included categories disclosed |
| FCA listing rules (PS26/19) | UK SRS S2 on comply or explain; Scope 3 relief for one year |
Timing under PS26/19
When Scope 3 applies, period by period
The relief belongs to the FCA’s rules, not to the standard: UK SRS S2 ¶C4 carries no time limit, and ¶C6 leaves its availability to the Companies Act or the FCA.
The FCA has set it at one year of non-disclosure of Scope 3 from initial application (PS26/19 ¶3.14).
| Accounting period beginning | Scope 3 for a listed company in scope | What the annual report says |
|---|---|---|
| Before 1 Jan 2027 | TCFD-aligned rules, or early UK SRS adoption with the same reliefs (¶3.19) | As under the existing rules |
| On or after 1 Jan 2027, before 1 Jan 2028 | Relief available: Scope 3 need not be disclosed | A statement that the relief is used; no further explanation (¶3.20) |
| On or after 1 Jan 2028 | Relief expired: disclose, or explain (¶3.23) | Scope 3 figures, or a summary of what is not met, why, and the steps planned |
| Any period, voluntary user | Relief available without time limit | Disclosure of the relief used, alongside any statement of compliance (UK SRS S2 ¶C5) |
The consultation, CP26/5, put Scope 3 on comply or explain beside a proposed mandatory UK SRS S2; the final rules put all of UK SRS S2 on comply or explain, so Scope 3 is no longer the exception.
PS26/19 ¶3.23 describes the second cohort: “The 1-year Scope 3 relief will have expired, and companies must therefore address the comply or explain requirements.”
The relief is optional, and companies already disclosing Scope 3 under the TCFD-aligned rules may carry on doing so while it is available (¶3.22).
A company that meets UK SRS S2 in full apart from Scope 3, using the relief, can still state compliance with UK SRS S2 if it discloses the relief alongside the statement (UK SRS S1 ¶73A).
Your own first and second periods are worked out from your year-end on the UK SRS deadline page.
Comply or explain
Can Scope 3 be explained instead of reported?
Yes, once the relief has run: from periods beginning on or after 1 January 2028, a listed company either discloses Scope 3 or explains under the rule beside this text.
The rule asks for steps, not a date, and PS26/19 sets no point at which the option to explain Scope 3 ends.
An explanation is a published statement that investors and the FCA will read, so “we have not started” is a weak answer to a rule that asks what you are doing about it.
The FCA’s draft guidance, Technical Note 803.1, gives an example of a company explaining that it could not yet obtain sufficient Scope 3 data and is working with suppliers.
That note is out for comment until 28 October 2026, so it is proposed guidance, not a rule.
How an explanation is built, and the FCA’s four draft examples, are on UK SRS comply or explain, and the final rules in full on UK SRS and the FCA.
If UK SRS S2 disclosures are not made, or made only in part, a statement setting out:
(i) a summary of the UK SRS S2 disclosure requirements that have not been met;
(ii) the reasons for not making those disclosures; and
(iii) any steps it is taking or plans to take to enable it to make those disclosures in the future.
The inventory
The 15 Scope 3 categories, upstream and downstream
Categories 1–8 are upstream, tied to what the company buys and operates; categories 9–15 are downstream, tied to what it sells and invests in.
| No. | Category | Stream | What it counts |
|---|---|---|---|
| 1 | Purchased goods and services | Upstream | Emissions from producing what the company buys, other than capital goods |
| 2 | Capital goods | Upstream | Emissions from producing plant, equipment, buildings and vehicles bought |
| 3 | Fuel- and energy-related activities | Upstream | Upstream emissions of purchased fuels and energy, and grid losses, not already in Scope 1 or 2 |
| 4 | Upstream transportation and distribution | Upstream | Transport of purchased goods in vehicles the company does not own or operate |
| 5 | Waste generated in operations | Upstream | Disposal and treatment of the company's waste by third parties |
| 6 | Business travel | Upstream | Employee travel for work in vehicles the company does not own |
| 7 | Employee commuting | Upstream | Travel between home and work |
| 8 | Upstream leased assets | Upstream | Operating assets the company leases, where not in Scope 1 or 2 |
| 9 | Downstream transportation and distribution | Downstream | Transport of sold products not paid for by the company |
| 10 | Processing of sold products | Downstream | Further processing of intermediate products by customers |
| 11 | Use of sold products | Downstream | Emissions from customers using what the company sells |
| 12 | End-of-life treatment of sold products | Downstream | Disposal and treatment of products at the end of their life |
| 13 | Downstream leased assets | Downstream | Assets the company owns and leases to others |
| 14 | Franchises | Downstream | Franchisees' operations, where not in Scope 1 or 2 |
| 15 | Investments | Downstream | Emissions attributed to loans and investments; financed emissions for financial institutions |
Under the Scope 3 Standard no category is optional: §6.2 says companies “shall account for all scope 3 emissions” and “disclose and justify any exclusions”.
A category a company does not have is reported as zero or “not applicable”, not left out.
Category 1, purchased goods and services, covers everything the company buys that is not a capital good, so its raw input is the purchasing ledger.
Category 11, use of sold products, counts what customers emit using the product, so it matters most where products burn fuel or draw power in use.
The Scope 3 Standard allows a company making intermediate products to exclude categories 9–12 downstream if it discloses and justifies that, but not to pick a subset of them.
Category-by-category calculation notes are on the Scope 3 toolkit, and Scope 3 across all UK regimes on Scope 3 emissions reporting.
Data quality
The measurement framework in Appendix B
Paragraph B38 expects Scope 3 to be estimated rather than measured, and requires a measurement approach, inputs and assumptions that give a faithful representation.
Estimation, in ¶B45, is activity data multiplied by emission factors: distance travelled, say, converted by a factor for that mode of transport.
Paragraph B47 tells the company to prefer primary data, such as supplier-specific emission factors, “with all else being equal”.
Where secondary data is used, ¶B51 says to prioritise emission factors for the jurisdiction where the activity took place.
For UK activity that points to the government conversion factors, published each year by DESNZ, and explained on UK emission factors.
Spend-based factors are secondary data too, and when they are acceptable is covered on spend-based emission factors.
Paragraph B56 then requires the company to say how far its Scope 3 figure uses inputs from specific value-chain activities, and how far it uses verified inputs.
Paragraph B57 presumes Scope 3 can be estimated from secondary data and industry averages; only in rare, impracticable cases does the company disclose how it manages Scope 3 instead.
UK SRS S2 ¶B40 — prioritise inputs that are
| Characteristic | Paragraphs |
|---|---|
| Based on direct measurement | ¶¶B43–B45 |
| From specific activities in the value chain (primary data) | ¶¶B46–B49 |
| Timely, and representative of the jurisdiction and technology | ¶¶B50–B52 |
| Verified | ¶¶B53–B54 |
Category 15
Financed emissions and paragraph B59A
For banks, insurers and asset managers, Category 15 is where the emissions of their lending and investment sit, and UK SRS S2 asks for more detail on it under ¶¶B59–B63A.
Paragraph 29A lets a company limit Category 15 to its financed emissions, meaning emissions attributed to loans, project finance, bonds, equity investments and undrawn loan commitments, and exclude derivatives.
A company using that limitation explains what it treated as a derivative and which activities it left out (¶29B), and gives total Category 15 and the financed subtotal (¶29C).
Those three paragraphs are the ISSB’s December 2025 amendments, carried into the UK text.
Paragraph B59A is the UK’s own addition: where financed emissions cannot reliably be estimated for the same period as the financial statements, the company discloses why, the approach used, and its plan and timeline.
Most institutions measure financed emissions with the PCAF Standard, whose Part A on financed emissions reached its third edition in December 2025.
The sector view is on the financial services guide.
Beyond UK SRS
Scope 3 in SECR, public procurement and UK policy
Three other UK instruments touch Scope 3, and each asks for a different, narrower thing.
| Regime | Who | Scope 3 asked for | Nature |
|---|---|---|---|
| SECR (SI 2008/410 Sch 7 Pt 7A) | Large unquoted companies and LLPs | Fuel for transport only (¶20D(1)(b)), e.g. business travel in hire or employees' cars where the organisation buys the fuel | Law |
| SECR (Sch 7 Pt 7) | Quoted companies | None | Law |
| PPN 006 Carbon Reduction Plans | Bidders for in-scope central government contracts above £5m a year including VAT | Five categories: 4, 5, 6, 7 and 9 | Procurement policy |
| UK SRS S2 under PS26/19 | Listed companies in five UKLR categories | Gross Scope 3; all 15 considered | Comply or explain |
“SECR does not require Scope 3” is true of quoted companies and false, narrowly, of large unquoted companies, whose transport-fuel limb is GHG Protocol category 6.
The SECR disclosure set is on SECR requirements.
The public-sector route is PPN 006: central government departments, their executive agencies and non-departmental public bodies ask bidders for a Carbon Reduction Plan as a condition of participation.
Its Scope 3 is five categories, not fifteen, and building one is covered on Carbon Reduction Plans.
Public bodies themselves are not UK SRS reporters, because UK SRS reaches them only if they choose to use it.
DESNZ’s own call for evidence on Scope 3, which ran from October to December 2023, described Scope 3 as remaining “largely voluntary” and published a summary of its 184 responses in November 2024.
Assurance and software
Verification, assurance and the tools that hold the trail
Assurance of Scope 3 is not required: the FCA’s rules ask only for a statement of whether assurance was obtained, and if so from whom, over what and to what standard.
The FRC issued ISSA (UK) 5000 on 12 November 2025 for voluntary use, effective for periods beginning on or after 15 December 2026.
The government says in its Modernising corporate reporting consultation that it has no plans at this stage to require assurance over future UK SRS reporting.
Verification still matters inside the standard, because ¶B53 tells the company to prioritise verified data and ¶B56 makes it disclose how much of its Scope 3 figure is verified.
Neither UK SRS nor the FCA’s rules approve or certify any software, so a tool is judged on whether it can produce what ¶¶B55–B56 ask for.
That means a record, per category, of the method, the activity data, the emission factor and its source and year, the share of primary data, and what was checked.
Our notes on UK SRS software and carbon reporting software apply that test, and our sister reference compares carbon reporting software against the wider UK SRS requirements.
Assurance options are covered on sustainability assurance in the UK, and you can book a free 15-minute call to talk through a Scope 3 plan.
Frequently asked
Scope 3 under UK SRS — frequently asked
What is Scope 3 reporting?
Scope 3 reporting is the disclosure of indirect greenhouse gas emissions in a company's value chain, other than the purchased energy counted in Scope 2. The GHG Protocol Corporate Value Chain (Scope 3) Standard (2011) divides them into 15 categories, eight upstream and seven downstream. UK SRS S2 requires Scope 3 to be reported in tonnes of CO2 equivalent alongside Scope 1 and Scope 2.
Does UK SRS require Scope 3 reporting?
UK SRS S2 paragraph 29(a)(i)(3) requires absolute gross Scope 3 emissions. For listed companies in scope of the FCA's rules, that requirement is on a comply-or-explain basis, like the rest of UK SRS. Paragraph C4 of UK SRS S2 provides a relief from disclosing Scope 3, which the FCA limits to one year from initial application.
When does Scope 3 reporting start under UK SRS for listed companies?
The FCA's rules apply to accounting periods beginning on or after 1 January 2027. In the first such period a company may use the one-year Scope 3 relief and state that it is doing so. For periods beginning on or after 1 January 2028 the relief has expired and Scope 3 must be disclosed or explained.
Can a listed company explain instead of reporting Scope 3?
Yes. After the relief expires, Scope 3 falls under the same comply-or-explain rule as the rest of UK SRS S2: a company that does not disclose it gives a summary of the requirement not met, its reasons and the steps it plans. PS26/19 sets no date on which the option to explain ends. Nothing about Scope 3 becomes mandatory when the relief expires.
Does UK SRS require all 15 Scope 3 categories?
No. Paragraph B32 of UK SRS S2 requires the company to consider its entire value chain and all 15 categories, and to disclose which categories are included in its Scope 3 figure. Considering all fifteen is not the same as reporting all fifteen. Paragraph B33 makes the categories disclosure compulsory whatever measurement method is used.
Is Scope 3 required under SECR?
Only narrowly. For large unquoted companies and LLPs, Schedule 7 paragraph 20D(1)(b) of SI 2008/410 requires energy and emissions from the consumption of fuel for transport, which reaches business travel in rental cars or employees' own vehicles where the organisation buys the fuel. No other Scope 3 category appears, and quoted companies have no Scope 3 limb under SECR.
Do public-sector suppliers have to report Scope 3?
Bidders for in-scope central government contracts above £5 million a year (including VAT) are asked for a Carbon Reduction Plan under Procurement Policy Note 006. Its Technical Standard requires Scope 1 and 2 in full and five Scope 3 categories only: upstream transportation and distribution, waste generated in operations, business travel, employee commuting, and downstream transportation and distribution. That is procurement policy, not a legal duty on companies, and it is separate from UK SRS.
What data quality does UK SRS S2 expect for Scope 3?
Paragraph B40 requires the company to prioritise inputs by four characteristics: direct measurement, data from specific activities in its value chain, timely data that represents the jurisdiction and technology, and verified data. Paragraph B56 then requires disclosure of how far the Scope 3 figure uses inputs from specific activities and how far it uses verified inputs.
Is assurance of Scope 3 required under UK SRS?
No. The FCA's rules require a statement of whether assurance was obtained and, if so, from whom, over what, to what level and against which standard. The FRC's ISSA (UK) 5000 is available for voluntary use. The government says it has no plans at this stage to require assurance over future UK SRS reporting.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- Department for Business and TradeUK SRS S2 Climate-related Disclosures (PDF)
¶29(a)(i)(3), (iii), (vi); ¶¶29A–29C; ¶¶B32–B33 (all 15 considered, included categories disclosed); ¶¶B38–B57 (measurement framework); ¶¶B59, B59A; ¶¶C4, C6.
- Financial Conduct AuthorityPS26/19: Aligning listed issuers' sustainability disclosures with international standards (PDF)
Comply or explain across UK SRS (¶1.7); one-year Scope 3 relief (¶3.14); relief statement (¶3.20); companies already disclosing may continue (¶3.22); expiry (¶3.23); early adopters (¶3.19).
- Financial Conduct AuthorityPS26/19 landing page
First published 30 September 2026: comply or explain across UK SRS; Technical Note feedback by 28 October 2026; FCA webinar on 19 October 2026; supervisory information in the second half of 2027.
- FCA HandbookUKLR 6.6 — annual financial report (commercial companies)
UKLR 6.6.6R(7A): the UK SRS S2 comply-or-explain limb that governs Scope 3 once the relief expires.
- Financial Conduct AuthorityCP26/5 consultation page
The January 2026 proposal, which put Scope 3 on comply or explain beside a mandatory UK SRS S2.
- GHG ProtocolCorporate Value Chain (Scope 3) Accounting and Reporting Standard (2011)
The 15 categories (Table 5.4) and §6.2: "Companies shall account for all scope 3 emissions … and disclose and justify any exclusions."
- GHG ProtocolCorporate Accounting and Reporting Standard
Under the Corporate Standard alone, Scope 3 is an optional reporting category.
- Department for Energy Security and Net ZeroGovernment conversion factors for company reporting of greenhouse gas emissions
UK emission factors, published annually; the jurisdiction-specific secondary data UK SRS S2 ¶B51 asks a company to prioritise.
- Department for Energy Security and Net ZeroUK greenhouse gas emissions reporting: Scope 3 emissions — call for evidence
Ran 19 October – 14 December 2023; 184 responses; "Scope 3 emissions remain largely voluntary".
- legislation.gov.ukSI 2008/410, Schedule 7, Part 7A ¶¶20D(1)(b), 20K
SECR's only Scope 3 limb: fuel for transport, for large unquoted companies and LLPs.
- Cabinet OfficePPN 006: Taking account of Carbon Reduction Plans in the procurement of major government contracts
Contracts above £5 million a year including VAT, averaged over the contract; procurements from 24 February 2025.
- Cabinet OfficePPN 006 Technical Standard for Completion of Carbon Reduction Plans
Scope 1 and 2 in full plus five named Scope 3 categories.
- Department for Business and TradeGovernment response to the UK SRS exposure-draft consultation
Annex A: ¶B59A added; the Scope 3 relief in ¶C4 kept without a time limit.
- Department for Business and TradeUK Sustainability Reporting Standards — guidance
UK SRS available for voluntary use by any entity.
- Financial Reporting CouncilSustainability reporting developments — FAQs
Voluntary users may use the reliefs "without time limits, indefinitely".
- Financial Reporting CouncilFRC takes steps to support quality and consistency in the assurance of sustainability reporting
ISSA (UK) 5000 issued 12 November 2025, for voluntary use.
- Financial Reporting CouncilISSA (UK) 5000 (PDF)
¶15: effective for periods beginning on or after 15 December 2026.
- Department for Business, Innovation, Science and TradeModernising corporate reporting — consultation
¶178: no plans to require assurance over future UK SRS reporting at this stage.
- PCAFThe Global GHG Accounting and Reporting Standard
Part A (financed emissions) is in its third edition, December 2025.
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