Carbon Accounting Needs a Reality Check—Here’s What That Looks Like
In the race to decarbonise, data matters. But not just any data. Many companies still rely on spend-based calculations to estimate their CO2e emissions. While this method may seem convenient, it's inherently flawed—and dangerously misleading. In fact, it can amount to unintentional greenwashing, even when the best intentions are at play. If businesses are serious about transparency and sustainability, the path forward is clear: 100% of emissions data must be based on actual activity.
It's not surprising that companies have historically turned to spend-based methods. The technology and tools needed to do otherwise simply weren’t available or accessible at scale. In many cases, spend-based calculations were the only option.
But that has changed. Today, it's possible to go far beyond averages and estimates.
At Green Effort, we believe there is no room for vague estimates in a climate crisis. The platform uses AI and automation to translate an entire company’s operations into accurate, LCA-based CO2e data in a matter of hours. Here’s why that shift matters.
The Pitfalls of Spend-Based CO2e Calculations
Spend-based methods estimate emissions by multiplying financial expenditures with average emission factors. For instance, if a company spends £10,000 on office supplies, a generic emission factor is applied to that amount. The logic is simple but dangerously imprecise.
Why?
Inflation & Market Volatility: A pound today doesn't equal a pound last year. Changes in prices due to inflation or economic shifts don’t reflect actual emissions.
Supplier Variability: Two suppliers may charge the same price for a product, but one may use renewable energy and recycled materials while the other doesn’t. Spend-based methods ignore that nuance.
Geographic Differences: A product's carbon intensity can vary drastically based on where and how it's produced, which is never captured in financial data.
This means that even the most well-meaning carbon reports based on spend are inherently flawed. And because of their vague methodology, they open the door to accusations of greenwashing. When CO2e data can be influenced by price rather than action, it undermines credibility and environmental integrity.
The Precision of Activity-Based (LCA) Data
In contrast, activity-based data is rooted in reality. It captures actual quantities and real-world activities: how much electricity was used, how many litres of fuel were burned, what materials were sourced and from where.
Line-by-Line Accuracy: Every purchase, shipment, and operation is broken down into measurable units with known emissions profiles.
Supplier-Specific Insight: Companies can reflect sustainability efforts made by suppliers—such as switching to electric fleets or sourcing renewable materials.
Actionable Intelligence: With accurate, activity-based data, companies can pinpoint exactly where emissions are highest and develop targeted reduction strategies.
This level of granularity empowers organisations not only to report honestly but also to improve continuously.
What the GHG Protocol Says
The GHG Protocol, the global standard for emissions accounting, clearly outlines a hierarchy of data quality. On page 16 of its Technical Guidance for Calculating Scope 3 Emissions, it states:
"Companies should prioritise the use of primary data for upstream and downstream activities where available, particularly from suppliers and other value chain partners. Secondary data, such as industry averages, EIO models, or spend-based data, should be used only as a fallback when primary data is not available."
And in the Data Quality Hierarchy (page 15–16), the guidance classifies:
Activity-based, supplier-specific data as the highest-quality Primary Data, and
Spend-based data as the lowest-quality Secondary Data, to be used only when better data isn't accessible.
🔗 Source: GHG Protocol – Scope 3 Calculation Guidance (ghgprotocol.org)
This hierarchy exists for a reason: the more accurate your data, the more credible your climate strategy. Spend-based data doesn’t just rank low—it was never meant to be a foundation for emissions reporting.
Why 100% Activity-Based is Now Possible
Until recently, the barrier to adopting activity-based data was time and complexity. Parsing invoices, tracing supply chains, and gathering LCA data manually was resource-intensive.
That’s where Green Effort comes in. The platform uses advanced AI and automation to analyse a company’s purchases, logistics, and supplier interactions at scale. It translates 100% of a company’s activities into accurate, activity-based CO2e data, validated by life cycle assessments, in just hours. It’s fast, it’s accurate, and it’s built for climate accountability.
Final Thoughts
The world can’t afford imprecise data. As climate targets tighten and stakeholders demand transparency, companies must move beyond spend-based carbon estimates. These outdated methods introduce too much ambiguity and risk. Activity-based data isn’t just better—it’s the only credible path forward.
Green Effort makes 100% activity-based reporting not only possible but effortless. Because in the fight against climate change, only real numbers can drive real action.
Curious how accurate your current emissions data is? Let’s talk.
References & Further Readings
GHG Protocol – Technical Guidance for Calculating Scope 3 Emissions
Carbon Trust: What are Scope 3 Emissions?
CDP: Why Spend-Based Carbon Accounting Falls Short
