Do I report emissions from services I buy on behalf of my clients?
You report the emissions from a purchased service when you are the buyer (the principal), and you leave them out when you only arrange the service for a client who is the buyer (the agent).
Many businesses buy services on behalf of clients and bill the cost on. It is easy to assume that makes the emissions the client’s. In order to determine if you need to account for these emissions, is to consider who the buyer is.
This article covers services you purchase for a client. If you buy physical products and resell them, there is more tailored guidance here: Do I need to report emissions for goods I buy and sell on to customers?
GHG Protocol approach
Services you buy from third parties are part of your Scope 3 emissions. When you buy a service on behalf of a client, the question is whether those emissions are yours or your client’s. The GHG Protocol doesn’t answer this directly, so we use the “principal or agent” concept from AASB 15, the Australian accounting standard for revenue. You are the principal if you are the buyer, meaning you control the service before it reaches your client. You are the agent if you only arrange it for the client, who is the real buyer.
Principal or agent?
| Test | Principal (you are the buyer) | Agent (you are arranging it) |
| Do you choose the supplier and hold the contract in your own name? | ✅ Yes | ❌No, the client contracts directly with the supplier |
| Do you record the full amount billed to the client as your revenue, with the supplier’s charge as a cost? | ✅ Yes | ❌No, we only record the fee |
| Do you decide who does the work, and how and when it is done? | ✅ Yes | ❌No, the supplier or client does |
| Are you responsible to the client if it goes wrong? | ✅ Yes | ❌No |
| Do you set your own price, rather than passing on the supplier’s? | ✅ Yes, you keep the margin | ❌No, you charge a fee or commission |
| Do you have to report these emissions? | ✅ Yes | ❌No, but the client does |
🔑 Golden Rule: If you buy the service in your own name, are responsible for delivering it and set your own price, the emissions are in your Scope 3. If you only arrange it for a fee, they only belong to the client.
If you are the principal, both you and your client report the emissions from the service in your own Scope 3.
This is expected and happens because Scope 3 covers everything linked to a company’s activities, including the services it buys. When you buy a service for a client, it is linked to both of you. You bought it, and your client benefits from it and pays for it. Each of you has some influence over the emissions. For example, you choose the supplier, and your client decides what they need done.
The GHG Protocol accepts this overlap. Counting the same emissions in more than one company’s Scope 3 is known as double counting, and in this context it is fine. It is also the reason Scope 3 works, as it gives every company in the supply chain a reason to act on the emissions. This is different from Scope 1 and 2, where two companies can’t report the same emissions.
Two rules apply:
- Don’t add inventories together. Your Scope 3 figure and your client’s can’t be added together to give a total for the supply chain.
- Disclose the overlap. Be clear in your reporting that some Scope 3 emissions are also reported by others.
Examples
Where you do report
Example 1: A freight forwarder. A forwarder contracts carriers in its own name to move clients’ goods. It chooses the carrier, is responsible for delivery and sets its own price. It is the principal, so the carrier emissions are in its Scope 3 Category 4 (Upstream transportation and distribution). Its clients count the same freight in theirs.
Example 2: A consulting firm using subcontractors. A consulting firm delivers part of a client project with consultants subcontracted from another firm. The firm holds the client contract, chooses the subcontractors, is accountable for the final work and sets the project price. It is the principal, so the emissions from the subcontracted work are part of its own Scope 3 (typically Category 1, Purchased goods and services). It makes no difference that the client ultimately pays for the work.
Where you do not report
Example 3: A travel agent. A travel agent books flights for clients. The client holds the ticket with the airline and the agent earns a fee or commission. The agent is not the buyer, so the flight emissions are not in its inventory. They sit in the client’s business travel (Category 6). A travel business that instead buys seats in its own name and sells them on as part of its own package is the buyer, and the emissions would be its own.
⚠️ Notes
- You can be both. One business can buy some services in its own name and only arrange others. Assess each service type separately.
- Labels don’t decide it. Calling a cost a “pass-through”, “disbursement” or “reimbursable” on an invoice doesn’t change who bought the service.
- Record your reasoning. If you conclude you are an agent, document why in your boundary documentation or any public reporting.
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