Are you sure you're measuring that right?

My understanding is with a fixed workload (e.g. compress a specific video file as part of a youtube video upload) then the M3 is faster, draws less battery power, and generates less heat.

But if you play a computer game with M1 running at 30fps but the M3 runs at 60fps... then yeah, the M3 will be hotter and draw more power. But it's also doing twice as much work. Drop the graphics settings down, so that the M1 and M3 are both able to hit 60fps (in a game where you can cap the frame rate), then the M3 will be cooler and use less power.

And the difference could be significant, especially if the M3 is fast enough to shut down the performance cores and do everything on the "efficiency cores". Those cores use a lot less power since they are designed to run on an smartphone sized battery.