Tier 1, tier 2 and tier 3 suppliers (and why Scope 3 needs them)

Breathe ESG supports all major global reporting frameworks, from CSRD, ISSB and CBAM to GRI and CDP, from one managed dataset.

Last reviewed: 11 November 2026.

The short answer

Tier 1 suppliers sell to you directly. You hold the contract and pay the invoice.
Tier 2 suppliers sell to your tier 1 suppliers.
Tier 3 suppliers sell to tier 2, often as raw-material producers.

Example for a packaged-food company: the packaging converter is tier 1, the paper mill that supplies the converter is tier 2, and the pulp or forestry operation is tier 3.

Most companies know their tier 1 list well. Few know tier 2. Yet for carbon, that's often where most of the emissions sit.

Three more examples

Your business	Tier 1	Tier 2	Tier 3
Car parts maker	Steel service centre	Steel mill	Iron ore miner
Fashion brand	Garment factory	Fabric mill and dye house	Yarn spinner, cotton farm
Electronics brand	Contract assembler	Battery cell or chip maker	Cathode material or wafer producer

Tiers aren't fixed labels. A distributor can sit between you and a manufacturer and push everyone down one tier. Map the physical flow of goods, not just the invoice trail.

Why tiers matter for carbon reporting

Emissions outside your own operations fall under Scope 3: the indirect emissions across the value chain, upstream and downstream. The GHG Protocol Scope 3 Standard groups them into 15 categories. Category 1, purchased goods and services, covers the emissions from producing what your tier 1 suppliers sell you, including everything they bought from tier 2 and beyond.

So you report one number per purchase, but that number is built from the whole chain behind it. If your tier 1 supplier only knows its own factory, its product footprint is incomplete.

How tiers map to Scope 3 categories

Scope 3 category	Where the data comes from
1. Purchased goods and services	Tier 1 product footprints, which depend on tier 2 and 3 data
2. Capital goods	Equipment and building suppliers, and their upstream chains
3. Fuel and energy related activities	Upstream emissions of the fuel and power you buy
4. Upstream transportation and distribution	Logistics providers you pay to move goods to you

Four ways to calculate Category 1

The GHG Protocol's Scope 3 calculation guidance describes four methods:

Supplier-specific: product-level data from the supplier itself. This usually depends on what your tier 1 supplier knows about its own tier 2.
Hybrid: supplier data where you have it, with secondary data filling the gaps.
Average-data: the quantity bought multiplied by an average factor for that material.
Spend-based: your spend multiplied by an industry-average emission factor. This is fast but coarse.

Most companies start spend-based and move their biggest suppliers to hybrid or supplier-specific over two or three years.

Where tiers show up in regulation and buyer requests

EU and UK CBAM: importers of steel, aluminium, cement, fertiliser and hydrogen need the embedded emissions of those goods. That data comes from the producing installation, often a tier 2 or tier 3 supplier (EU Regulation 2025/2083; UK CBAM guide).
EU Digital Product Passport: product-level information has to travel through the chain. The battery passport is the first, with go-live on 18 February 2027. See our DPP guide.
California SB 253: the first reports (due 10 November 2026) covered Scope 1 and 2. On 9 November 2026, the Ninth Circuit found the law's Scope 3 requirement likely unconstitutional and sent it back to the district court (opinion). Customers and investors may still ask for Scope 3.
ISSB-based reporting: IFRS S2 expects Scope 3, with transition reliefs in many countries. That's driving requests in markets like Singapore and Malaysia (Southeast Asia guide).
Customer questionnaires: large buyers ask tier 1 suppliers for product footprints, which pushes the request down to tier 2.

How to start collecting supplier data

Rank your tier 1 suppliers by spend and by the emissions intensity of what they sell. Steel, chemicals and freight usually rise to the top.
Ask the top 20 for product-level emissions data and the method behind it.
Ask them which of their suppliers drive their footprint. That's your map of tier 2.
Use spend-based estimates for the long tail, and replace them with supplier data over time.
Put data clauses in new contracts, so the request becomes routine.

What to ask a tier 1 supplier

Emissions per unit of the product you buy (per tonne, per piece), and the year it covers.
The method used, and whether it follows the GHG Protocol Product Standard or ISO 14067.
Which share comes from their own sites and which from their suppliers.
Their three biggest upstream suppliers by emissions, and the country of production.
Whether the figure has been verified, and by whom.
For CBAM goods: installation-level embedded emissions and any carbon price paid.

Common mistakes

Treating a distributor as the producer and missing the real tier 2.
Accepting a company-wide footprint instead of a product-level one.
Mixing years, so supplier data from 2023 sits next to your 2025 spend.
Sending 300 questionnaires at once and getting 12 answers back. Start with the suppliers that matter.

How Breathe ESG helps

Breathe ESG collects supplier emissions data alongside your own Scope 1, 2 and 3 accounts, keeps the audit trail, and replaces spend-based estimates with supplier figures as they come in.

People: ESG consulting and fractional CSOs to run supplier engagement with you.
Training: Breathe Academy for procurement teams.
Community: Breathe Zero, a network of ESG professionals.

Book a 20-minute walkthrough.

FAQs

Is tier 0 a thing?

Some companies call their own operations tier 0. It's the same as your Scope 1 and 2 boundary.

Do I need data from every tier?

No. Focus on the suppliers and materials that drive most of your Scope 3, and use averages for the rest.

What if a tier 1 supplier refuses to share?

Use average or spend-based data for now, note it as an estimate, and make data sharing a condition at the next contract renewal.

Are tier 2 emissions my Scope 3 or my supplier's?

Both. They're in your Scope 3 Category 1 and in your tier 1 supplier's own Scope 3. That's expected in value chain reporting.