Tackling Scope 3 downstream emissions can become your advantage. Here’s how

Jul 22, 2025

Scope 3 emissions can make up the largest share of a company's carbon footprint

Image: Getty Images/iStockphoto

Stephanie Dunn

Project Fellow, Alliance of CEO Climate Leaders, World Economic Forum

Firuze Alpaydin

Project Fellow, Alliance of CEO Climate Leaders and Climate Finance, World Economic Forum

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Scope 3 downstream emissions often remain the most complex and overlooked part of corporate climate action, despite representing the largest share of many companies’ carbon footprints.
This gap limits businesses’ ability to drive meaningful impact and meet ambitious net-zero commitments.
A new handbook from the Alliance of CEO Climate Leaders, developed with BCG, provides companies with a practical framework to reduce downstream emissions, turning a challenging area into a source of competitive advantage.

Scope 3 downstream emissions, those generated after a product leaves the factory, are the largest and most complex share of corporate value chain emissions. Yet, few companies have a clear strategy to reduce them.

For members of the Alliance of CEO Climate Leaders, these emissions account for 67% of their total footprint, amounting to 3.5 gigatonnes of CO₂e, roughly the same as India’s annual carbon dioxide equivalent emissions (from fossil fuels and industry only, as per Our World in Data figures with further BCG Analysis).

Addressing downstream emissions can cut costs, lower emissions and boost customer engagement. To support this, the alliance has released the Scope 3 Downstream Handbook, outlining 12 actionable levers companies can use.

These span everything from sustainable product design and circular business models to customer engagement and financial strategy.

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Why downstream decarbonization is hard

Decarbonizing downstream emissions is uniquely difficult due to several structural barriers:

Limited control over end use: In consumer markets, companies have limited influence over how customers use, maintain or dispose of their products.
Complex, opaque value chains: In business-to-business (B2B) sectors such as manufacturing or chemicals, products pass through multiple downstream players. Emissions from processing intermediate goods (e.g. steel into car parts) are often invisible to the original manufacturer.
Data gaps and measurement challenges: Even in sectors without complex value chains, tracking emissions from many Scope 3 categories is difficult (such as leased assets or franchise operations).
Customer price sensitivity: For many companies, it’s unclear whether customers will pay a premium for greener options. This dampens commercial incentives for sustainability-driven innovation.

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Leveraging actionable strategies for Scope 3

The Scope 3 Downstream Levers Handbook organizes its 12 strategic levers under four key categories. Each category reflects a major source of downstream emissions and offers practical entry points for private-sector action:

1. Design for sustainability

Optimize current products’ consumption: Improving current portfolio to require fewer resources to perform the same function, especially improving products energy efficiency.
Develop low-carbon product portfolios: Developing a portfolio with new products and solutions leading to lower product use phase emissions while achieving the same function.
Design circular business models: Transition to models such as product-as-a-service or subscription systems to increase utilization and reduce resource waste.
Design for material circularity: Use recyclable and renewable materials and design for easy disassembly to enable recovery and reuse.
Design for life extension: Design for durability, repair and upgradeability. Establish support systems for maintenance and spare parts to reduce waste and repeat purchases.

Beko: Electrical recycling

BEKO recycling plant Image: BEKO

Beko’s comprehensive WEEE (Waste Electrical and Electronic Equipment) recycling programme is a perfect example of this.

Beko strengthened its recycling efforts by opening two dedicated plants for the collection, disassembly, and material recovery of end-of-life products. To boost impact, Beko launched take-back campaigns inviting customers to return old appliances of any brand.

From 2014 to 2023, this initiative recycled 1.75 million WEEE units, significantly cutting landfill waste and promoting circularity.

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How is the World Economic Forum promoting responsible models of consumption?

In order to build a resilient future for all stakeholders, the World Economic Forum's Platform for Shaping the Future of Consumption aims to shape responsible models of consumption that are equitable, promote societal well-being, and protect the planet.

The Consumers Beyond Waste initiative is empowering consumers to access reuse consumption models at scale. It’s vibrant community of changemakers across leading consumer companies, reuse innovators, civil society, and policymakers have established strategic frameworks to enable an economically viable transition to reuse, along with guidelines for design, health and safety, and municipal considerations to facilitate adoption. In its next phase of impact, the initiative is building a framework for standardized reuse measurement and reporting and advancing the development of reuse policies and legislation at scale.
The New Frontiers of Nutrition initiative is dedicated to transforming lives through the power of nutrition via system-wide change. Leading experts and researchers in nutrition, companies from multiple industries, and public partners are joining forces to shape transformative solutions to accelerate the availability, access, and adoption of nutritious food choices to empower holistic – physical and mental - health and wellbeing of consumers.

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The Future of Personalized Wellbeing initiative is harnessing the power of digital biology to revolutionize the overall well-being of individuals. It has convened a community of technology innovators, consumer companies, data experts, academics, and progressive public sector actors to establish a future-oriented vision and roadmap for the widespread adoption and use of precision consumption solutions focused on precision nutrition and personal care.
The Scope 3 Decarbonization: The Consumer Opportunity initiative is identifying the demand-side strategic pathways required for Scope 3 decarbonization within the net-zero commitment framework. It brings together an ecosystem of leading cross-industry actors and public sector organizations to empower citizens in leading net zero lives anchored in new patterns of consumption.

2. Attract customers

Win over business-to-consumer customers to green choices with a compelling offering: Use transparency, targeted marketing and incentives to guide consumers toward low-emission products and behaviours.
Partner with B2B customers on product use and end-of-life decarbonization: Collaborate with business clients to co-develop tailored solutions that reduce emissions during product use and disposal.

BASF: Less is more

The Citroen concept car was designed with BASF materials, some of which are used in radically new contexts Image: BASF

BASF partnered with Citroën to co-design a new generation car based on the “less is more” sustainability principle, enabling a 20% reduction in car weight. They chose advanced materials, such as a honeycomb glass-reinforced cardboard roof, waste-reducing interiors and elastic waterborne eco-friendly coatings, to boost recyclability.

Material uniformity and innovative design were key success factors, with one material primarily used for the interior design and both doors featuring identical panels.

3. Manage financial flows

Finance green assets and market green financial products: Increase exposure to sustainable assets by embedding climate goals into strategic asset allocation and product development. Launch green-labelled funds, sustainability-linked loans, green insurance and related instruments to incentivize the shift toward low-carbon activities.
Promote and support portfolio decarbonization: Help clients with their transition plans. Provide advisory services, monitor progress and offer financial incentives for emissions reductions (e.g. reduced interest rates or blended finance structures).
Reduce exposure to investees without a net-zero corporate strategy: Strengthen climate risk processes by identifying non-aligned investees. Engage companies on their transition readiness, set expectations and adjust portfolio allocations accordingly.

BBVA: Aligning lending with net zero

BBVA offices Image: BBVA

BBVA developed an internal methodology to align its lending portfolios to net zero by 2050. The bank established sector-specific emissions reduction targets in line with the Net Zero Banking Alliance guidelines and actively engaged with stakeholders by providing tailored sector-specific advice. This resulted in a 37% reduction in emissions intensity between 2020 and 2024 in power generation.

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4. Optimize transport and distribution

Optimize transportation and distribution management: Shift to lower-emission transport modes (e.g. rail over truck, electric fleets), optimize routes using data tools, improve load planning and use more efficient packaging to reduce trips and emissions intensity.
Cooperate with contractors to reduce transport emissions: Collaborate with logistics contractors to adopt alternative fuels (e.g. biofuels, renewables), integrate shared transportation networks to improve utilization and co-develop emissions reduction targets. Track improvements such as reduced vehicle miles, increased alternative fuel use and contractor emissions performance.

Scope 3 downstream emissions are a defining challenge and opportunity for corporate climate leadership. Through sustainable design, circular economy models, smarter finance and customer collaboration, the private sector can accelerate the global transition to net zero while creating new value streams.

Pim Valdre, Head of Climate Ambition Initiatives, World Economic Forum, also contributed to this article.

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