What is Scope 3 Category 2: Capital Goods?
Category 2 covers the upstream emissions from producing long-life assets your organisation buys, like buildings, machinery, vehicles, and IT equipment. It is about making those assets, not using them day to day.
What are Scope 3 Category 2: Capital goods?
Category 2 includes emissions from the cradle-to-gate production of capital goods purchased by your organisation in the reporting year. Capital goods are assets that support your business over multiple years, so this category captures the embedded emissions from manufacturing and construction, rather than operational energy use.
The GHG Protocol breaks this category out from Scope 3 Category 1 (Purchased goods and services), which covers items you buy that are not treated as capital assets. It is also different from Scope 3 Category 8 (Upstream leased assets), which focuses on operating leased assets rather than the embodied emissions from buying owned assets.
Examples of Scope 3 Category 2: Capital goods
Common examples include:
- Construction or refurbishment of offices, warehouses, and facilities
- Machinery and production equipment
- Company-owned vehicles purchased that year
- Computers, servers, and other IT hardware that is capitalised
- Furniture and major fit-out items treated as capital assets
How to calculate Scope 3 Category 2: Capital goods
Category 2 is often calculated using either spend-based or activity-based methods, depending on data quality:
- Identify capital purchases made during the reporting year
- Classify by asset type (construction, vehicles, machinery, IT)
- Use activity data where available (quantities, weights, materials, build specs)
- Otherwise use spend data mapped to relevant emission factors
- Apply appropriate emission factors and sum totals
Typical data sources include:
- Fixed asset registers and capex reports
- Procurement and finance systems
- Construction bills of quantities or project specs (where available)
- Supplier EPDs or product carbon data (when credible and consistent)
How to reduce Scope 3 Category 2: Capital goods
Because these emissions are largely locked in at purchase or design stage, reductions often come from smarter specifications and longer asset life, for example:
- Choose lower-carbon materials and designs for construction and fit-outs
- Specify efficient, durable equipment that lasts longer
- Repair, refurbish, or buy remanufactured where appropriate
- Consolidate purchases and avoid unnecessary refresh cycles (especially IT)
- Work with suppliers on lower-carbon options and better product data
- Prioritise the biggest capex items first, where the footprint is concentrated
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