The Food Business Guide to Scope 3 Category 1

This guide covers what Scope 3 Category 1 means for food businesses specifically, why it's different from how other industries approach it, and what it takes to calculate and report it accurately.

What Scope 3 Category 1 Covers

Scope 3 Category 1 captures the emissions embedded in everything a business purchases—the carbon footprint of goods and services before they arrive at your site. For a manufacturing company, this might be raw materials and components. For a software business, it's hardware and cloud infrastructure.

For food businesses, it's ingredients. Every item on a menu, every product in a procurement order, every consumable in a kitchen carries an embedded carbon footprint from agricultural production, processing, packaging, and upstream transport. That footprint varies enormously by ingredient type, country of origin, and production method.

This is why Category 1 is structurally different for food businesses than for most other sectors,  and why the standard approaches to Scope 3 calculation often fall short.

Why Category 1 Is Harder for Food Businesses Than for Most Industries

In a manufacturing company, Category 1 might involve hundreds of distinct inputs, most of which are relatively stable and traceable. In a food business, it can involve thousands of distinct SKUs changing seasonally, with sourcing that shifts by supplier, region, and time of year. The same ingredient from different origins carries different emission factors. A change in a default supplier for a single ingredient can shift Category 1 emissions measurably.

This creates three practical challenges that generic Scope 3 tools weren't built to handle:

Volume and SKU Complexity 

Large food operators purchase thousands of distinct products. Calculating Category 1 accurately requires mapping each SKU to an appropriate emission factor, not approximating based on broad category averages. Manual processes don't scale; automated SKU mapping does.

Ingredient-Level Variation 

The emission factor for beef varies by a factor of two or three depending on farming system and geography. The same product from a different supplier or origin can carry a significantly different footprint. Category 1 figures built on global averages can't capture this, and therefore can't support the ingredient and supplier decisions that actually move emissions.

FLAG Emissions 

Forest, Land, and Agriculture emissions—covering land-use change and agricultural production impact—represent a substantial share of Category 1 for food businesses. They require specific LCA methodology to calculate. SBTi requires them to be reported and targeted separately from fossil fuel emissions. Many Scope 3 tools don't include FLAG coverage, leaving food businesses with an incomplete Category 1 figure.

The Two Calculation Approaches and Which One to Use

The GHG Protocol permits two approaches for Scope 3 Category 1. The choice between them directly determines how useful the results are.

Spend-Based Calculation

Uses financial expenditure multiplied by industry-average emission factors. Fast to implement. Requires only spend data rather than quantity data. Produces a Scope 3 Category 1 figure.

The problem: spend-based calculation cannot distinguish between high-emission and low-emission ingredients at the same price point. A beef fillet and a vegetable dish at the same cost carry emissions that differ by a factor of five or more. Spend-based methods treat them identically. The resulting figure satisfies a basic disclosure requirement but can't identify hotspots, can't support reduction planning, and increasingly can't meet the auditability standards that CSRD demands.

Activity-Based Calculation

Uses actual quantities of ingredients purchased, multiplied by emission factors from LCAs, scientific studies, and recognized national databases, specific to each ingredient. This produces results that reflect actual procurement decisions—specific enough to show which ingredients, categories, and suppliers drive Category 1 emissions, and what changes would reduce them.

Activity-based calculation is more demanding to implement, but it produces results specific enough to identify which ingredients and suppliers drive Category 1 emissions, and what changes would reduce them. Spend-based data is also permitted under GHG Protocol and is a reasonable starting point; the question is what you want to do with the results.

For a detailed step-by-step guide to the calculation, see How to Calculate Scope 3 Emissions for Food Businesses.

Carbohydrates

Uses actual quantities of ingredients purchased, multiplied by emission factors from LCAs, scientific studies, and recognized national databases, specific to each ingredient. This produces results that reflect actual procurement decisions—specific enough to show which ingredients, categories, and suppliers drive Category 1 emissions, and what changes would reduce them.

Activity-based calculation is more demanding to implement, but it produces results specific enough to identify which ingredients and suppliers drive Category 1 emissions, and what changes would reduce them. Spend-based data is also permitted under GHG Protocol and is a reasonable starting point; the question is what you want to do with the results.

For a detailed step-by-step guide to the calculation, see How to Calculate Scope 3 Emissions for Food Businesses.

What Scope 3 Category 1 Requires Under CSRD

Under the Corporate Sustainability Reporting Directive, companies must disclose Scope 3 emissions under ESRS E1. For food businesses, Category 1 is almost always material under CSRD's double materiality assessment—because ingredient sourcing represents both a significant environmental impact and a potential financial risk as carbon costs develop.

CSRD requirements for Category 1 specifically include:

• Auditable methodology: Documented emission factors with traceable sources, clear system boundaries, and explicit assumptions
• Activity-based data: Spend-based estimates are permitted under GHG Protocol and acceptable for CSRD disclosure; activity-based calculation produces more accurate figures that are better positioned to withstand audit scrutiny and support the reduction planning that CSRD's double materiality assessment expects
• Year-on-year comparison: Consistent methodology applied across reporting periods, against a documented baseline year
• Third-party verification readiness: The data trail needs to be clear enough that an auditor can follow the calculation from raw procurement data to disclosed figures

For food businesses preparing for CSRD, building the Category 1 data infrastructure is the critical path. Everything else in the ESRS E1 disclosure—Scope 1, 2, and the other Scope 3 categories—is significantly less complex.

What Scope 3 Category 1 Requires for SBTi

Science-Based Targets require emissions reductions across all three scopes. For food businesses, the SBTi FLAG framework adds a further layer: agricultural and land-use emissions must be reported and targeted separately from fossil fuel emissions.’

For most food businesses, FLAG emissions sit primarily in Category 1—the agricultural production and land-use change embedded in food sourcing. Setting credible SBTi FLAG targets requires the same ingredient-level, activity-based Category 1 data that CSRD reporting depends on. The data investment serves both purposes.

For a full guide to how CSRD, Scope 3, and SBTi connect, see How CSRD, Scope 3, and SBTi Work Together for Food Businesses.

What Good Category 1 Data Enables

The businesses using Category 1 data most effectively aren't treating it as a compliance output. They're using it as an operational tool.

Procurement Decisions 

When Category 1 data shows which ingredients and suppliers drive the most emissions, procurement teams can factor carbon into sourcing decisions alongside price and quality. High-emission, high-cost ingredients become visible as dual optimization opportunities.

Menu and Recipe Development 

Kitchen and culinary teams can see the emissions impact of menu items and model the effect of recipe changes before implementation. Sodexo's restaurant at AstraZeneca used this to reduce meal-related emissions by 66%; the specificity of ingredient-level Category 1 data is what made that outcome achievable rather than directional.

Supplier Engagement

Category 1 hotspot data identifies which suppliers carry the most emissions risk. That's the basis for productive sustainability conversations with supply chain partners—conversations grounded in data rather than general expectations.

Commercial Reporting 

For caterers and food producers, Category 1 data is what their corporate clients need for their own CSRD disclosures. The ability to provide verified Category 1 figures has become a commercial requirement in many procurement contexts.

Building Category 1 Data Infrastructure

For food businesses approaching Category 1 for the first time, the practical starting point is procurement data. The same SKU-level purchase records that operational teams already work with are what activity-based Category 1 calculation requires. The emissions calculation layer—connecting SKUs to ingredient-level factors, applying origin-specific variations, covering FLAG, and generating auditable outputs—is where a purpose-built platform adds the most value.

Klimato Food Emissions connects to existing procurement systems or accepts direct data uploads, maps SKUs to ingredient-level emission factors automatically, and delivers enriched Category 1 data back into the platforms teams already use. Outputs are structured for CSRD/ESRS E1 and SBTi FLAG submissions, with every figure traceable to its source.

For a full explanation of all three scopes and how Category 1 fits into the complete emissions picture, see Scope 1, 2, and 3 Emissions Explained for Food Businesses.

FAQ: Scope 3 Category 1

Q: What is Scope 3 Category 1?
A: Scope 3 Category 1—purchased goods and services—covers the greenhouse gas emissions embedded in everything a business buys. For food businesses, this primarily means the carbon footprint of ingredients and products procured: the agricultural production, processing, and upstream transport embedded in each item purchased.

Q: Why does Category 1 matter more than other Scope 3 categories for food businesses?
A: For most food operators, Category 1 accounts for 80–95% of total climate impact. The other Scope 3 categories—transport, waste, employee commuting—are meaningful but significantly smaller in comparison. Any reduction strategy that doesn't address Category 1 is working around the dominant source of emissions rather than through it.

Q: What data is needed to calculate Scope 3 Category 1?
A: Ingredient-level purchasing data showing quantities by SKU, covering the full reporting period. Most food businesses already have this in their ERP or procurement systems. The calculation layer—mapping SKUs to emission factors, applying origin-specific variations, covering FLAG—is where purpose-built tools add value.

Q: Can spend-based estimates be used for Category 1 under CSRD?
A: Spend-based data is permitted under GHG Protocol as a starting point and may be acceptable for initial CSRD disclosure. As reporting standards tighten and third-party verification becomes more common, activity-based calculation produces more defensible figures. For food businesses where Category 1 is material, which is almost always, the expectation is moving toward ingredient-level, activity-based methodology.

Q: What are FLAG emissions and how do they relate to Category 1?
A: FLAG (Forest, Land, and Agriculture) emissions cover the land use change and agricultural production impact embedded in food supply chains. For food businesses, FLAG emissions sit primarily in Category 1. SBTi requires them to be reported and targeted separately from fossil fuel emissions. Any Category 1 calculation used for SBTi submissions needs to include FLAG coverage explicitly.