You need a first Scope 3 figure, but your suppliers have not sent any data yet. Your accounts already answer the first question: how much your company spends, and on what. The spend-based method turns this spend into an estimate of emissions with average factors for each sector of the economy.
- Spend-based method: you multiply what you spend on goods and services by an emission factor per euro for each sector.
- Where it works: Scope 3 categories 1, 2, 4 and 6.
- Emission factors: free databases, such as USEEIO (kg CO₂e per USD) and EXIOBASE (kg CO₂e per EUR).
- Limits: lower accuracy, so treat the result as a first estimate and replace it with supplier data step by step.
What is the spend-based method?
The spend-based method uses financial data instead of detailed operational data. In practice, you estimate emissions from how much your company spends on specific products and services. You can use it for these Scope 3 categories:
- category 1, purchased goods and services;
- category 2, capital goods;
- category 4, upstream transportation and distribution;
- category 6, business travel.
The mechanism is simple: you multiply the value of spend by the emission factor for that type of spend. The factors are averages for whole sectors of the economy. So you do not need to contact suppliers or collect detailed data about their work. This lets you estimate emissions quickly, even in very complex supply chains.
Where do you get emission factors, and are they free?
The key step is to choose up-to-date emission factors. You can use free databases. The most popular are:
- USEEIO (US Environmentally-Extended Input-Output Model): a database from the US Environmental Protection Agency (EPA), with emission factors in kg CO₂e per USD;
- EXIOBASE: a smaller database than USEEIO, built by research institutes in EU-funded programmes, with factors in kg CO₂e per EUR.
The GHG Protocol allows secondary data, such as these databases, when you lack primary data. This happens most often when you calculate your first corporate carbon footprint. Primary data comes directly from producers or suppliers. Still, you should replace secondary data with more accurate information step by step. Also adjust older financial factors for inflation and exchange rates.
How to calculate emissions with the spend-based method step by step?
In practice, a spend-based calculation can follow these steps:
- Choose a database. In this example, we use EXIOBASE, with factors based on 2019 data.
- Find the value of goods and services bought in the reporting year, for example 2025. Use the cost types that your company already uses. Example: computer services, EUR 1,000.
- In EXIOBASE, find the factor for this type of spend: “Computer and related services”, 0.342 kg CO₂e per EUR.
- Adjust the factor to 2025 prices. EXIOBASE gives factors per euro at 2019 prices, and prices have risen since then. Divide the factor by the inflation from 2020 to 2025.
- Calculate the carbon footprint of computer services for 2025.
For step 4, we use annual inflation in the euro area (Eurostat, HICP, 2026):
- 2020: 0.3%;
- 2021: 2.6%;
- 2022: 8.4%;
- 2023: 5.4%;
- 2024: 2.4%;
- 2025: 2.1%.
Together, this gives an adjustment of 1.003 × 1.026 × 1.084 × 1.054 × 1.024 × 1.021 = 1.229.
The adjusted factor is 0.342 ÷ 1.229 = 0.278 kg CO₂e per EUR. So the carbon footprint of computer services in 2025 is EUR 1,000 × 0.278 = 278 kg CO₂e.
If you buy in another currency, for example in pounds, first convert your spend to euros. Use the exchange rate for the base year of the database.
What are the advantages of this method?
For companies that start reporting Scope 3, the spend-based method has some clear advantages. Above all, it is easy to start, because it uses data the company already has: financial data from the accounting system. It needs no advanced tools and little time. It also shows quickly where the emission hotspots are: the activities with the largest effect on the climate.
What are the limits of the spend-based method?
The method is simple, but it has limits. The main one is lower accuracy. It uses average factors for whole sectors, so it does not show differences between specific suppliers, technologies or locations. In practice, treat the results as a first estimate of the carbon footprint. They show you the areas with the largest emissions.
What to do after the first spend-based calculation?
After the first estimate, focus on the activities with the most emissions. In the next steps, collect data only from your key suppliers and use more accurate methods. This prepares the ground for real reduction measures.
Why start Scope 3 with the spend-based method?
The main strength of the spend-based method is that it is simple and the data is easy to get. It is not very precise. But it quickly gives you an overview of your emissions and shows the key areas for further work. In carbon management, this is what matters most: start, and improve your data step by step.
You can then organise your cost data and estimate emissions in Scope 3 with more accurate methods, category by category.