Driving scope 3 reduction goals with circular economy principles

The pathway to decarbonisation requires addressing scope 3 emissions, which often represent between 70% and 95% of an organisation’s total carbon footprint. Carolina Paes, consultant at Nexio Projects, shares how circular economy principles can help further enhance the impact of scope 3 initiatives.

Understanding Scope 3 emissions

Scope 3 emissions encompass all indirect greenhouse gas emissions occurring in a company’s upstream and downstream value chain. These include emissions linked to purchased goods and services, capital goods, waste generated, product use, and end-of-life processing.

Unlike scope 1 (direct emissions) and scope 2 (purchased electricity, steam, heat and cooling), scope 3 is complex to quantify and manage because it extends beyond organisation’s direct control, involving suppliers, logistics, customers, and disposal systems. Effective decarbonisation requires detailed value chain insight and collaboration.

Circular economy principles in practice

The circular economy aims to keep products, components, and materials at their highest utility and value for as long as possible, while regenerating natural ecosystems. Core principles are: designing out waste and pollution; circulating products and materials through reuse, repair, and recycling; and regenerating natural systems.

Businesses apply these through waste minimisation, resource efficiency, recycled content use, durable and repairable product design, and circular business models like leasing or take-back schemes.

There are a number of overlaps between the two approaches:

Value chain orientation
Both scope 3 and circular economy focus on impacts and opportunities beyond a company’s direct operations. This means addressing emissions and resource use across upstream suppliers, downstream customers, and end-of-life management, requiring collaboration across the entire value chain.

Carbon reduction potential
Circular economy strategies directly reduce carbon footprints by influencing how materials are sourced, products are designed and used, and how waste and end-of-life streams are managed. This helps tackle the largest portion of emissions occurring outside direct operational control.

Environmental and social co-benefits
Implementing circularity reduces raw material extraction, limiting environmental degradation and benefiting communities affected by mining, deforestation, or pollution. It also promotes job creation in repair, refurbishment, and recycling sectors, enhancing social sustainability.

Economic opportunities
Circular business models unlock economic value by reducing waste management costs, creating secondary material markets, extending product life, and enabling new revenue streams such as product-as-a-service and take-back schemes, increasing resource efficiency and resilience.

Which Scope 3 categories relate to circular economy?

The main scope 3 categories that directly connect with circular economy principles include:

• Purchased goods and services: Emissions from extraction, production, and transportation of materials or services purchased by a company, where circular strategies such as recycled content and sustainable sourcing have significant impact.
• Capital goods: Emissions associated with manufacturing and transport of long-term assets like machinery and buildings, where leasing, refurbishing, and repair extend asset life and reduce carbon.
• Waste generated in operations: Emissions from the treatment and disposal of waste produced during operations, with opportunities in waste minimisation, recycling, and industrial symbiosis.
• Use and end-of-life of sold products: Emissions during the use phase and end-of-life disposal of sold products, where designing for durability, energy efficiency, repairability, and take-back schemes all support circularity.

Circular strategies for scope 3 reduction

So, what are circular strategies that can help achieve scope 3 reduction?

Strategy 1: Purchased goods and services

• Switch to recycled or renewable materials to reduce embodied carbon compared with virgin resources.
• Redesign products to lower carbon intensity in materials and manufacturing processes.
• Engage suppliers on circular best practices to promote sustainability and carbon reductions across the supply chain.
• Prioritise suppliers committed to science-based targets or circular product programmes

Strategy 2: Capital goods

• Lease equipment or machinery instead of purchasing outright, extending asset utility and improving lifecycle emissions.
• Choose refurbished or modular equipment that supports repair and upgrades rather than complete replacement.
• Prioritise repair over replacement when this effectively extends asset life and reduces resource consumption.
• Incorporate circular considerations early in capital goods procurement and infrastructure investment decisions.

Strategy 3: Waste generated in operations

• Minimise waste production at source through better process control and material efficiency.   
• Improve recycling and composting rates to divert waste from landfill and incineration, significantly lowering greenhouse gas emissions.
• Track waste data accurately to identify waste streams and improvement opportunities.
• Partner with waste processors proficient in recycling and materials recovery.
• Employ by-product synergy and industrial symbiosis to reuse waste streams as raw materials for other processes.

Strategy 4: Use and end-of-life of sold products

• Design products for energy efficiency to reduce emissions during use.
• Enable repairability and modular upgrades to extend product lifetimes and reduce replacement frequency.
• Optimise product durability to maintain function and value longer, minimising material demand.
• Support take-back schemes and reverse logistics to recover products and materials at end-of-life.
• Design products for recyclability and provide clear disposal instructions to increase recycling rates and reduce landfill.

Case study: Material shift in furniture manufacturing

A furniture manufacturer undertook a significant decarbonisation project, focusing on sourcing changes rather than process redesign. By shifting key materials – polyester, foam, and metals – from virgin to recycled inputs, the company achieved substantial emissions reductions. For metals, emissions fell by over 50%, while foam and polyester also saw meaningful declines.

This was achieved through deep supplier engagement, prioritising materials with lower carbon intensity based on life cycle data. The project emphasised collaboration across procurement and product development teams to integrate circular principles early in the sourcing process.

The case highlights how focusing on material choices can deliver large scope 3 reductions quickly, without disrupting existing manufacturing workflows, demonstrating a pragmatic path toward net zero ambitions.