Myth-busting: Spend-Based Carbon Assessments are Quick, Dirty and Won’t Get You the Accurate Scope 3 Data You Need for Compliance

Conducting emissions assessments is a continuous journey of refining calculation methodologies and increasing the granularity of the calculations, expect your baseline to continuously change. On this journey, spend-based assessments are a great first step for companies wishing to measure their emissions footprint.

However, it’s important for companies not to stop at this first step but rather look to increase the granularity and actual or primary data of their emissions assessments by leveraging physical unit or hybrid calculation methodologies that Emitwise can provide.

What spend-based assessments shouldn’t be, however, is overlooked as a way for companies to get started with emissions accounting. This is especially true when getting ready to take on scope 3 decarbonisation with your suppliers.

There’s No Need to Engage Suppliers Until You’re Absolutely Ready

Many believe supplier engagement is the first required step to measuring your scope 3 emissions, but that is not necessarily the case. It can lead to a lot of time and effort with limited measurable impact. A spend-based assessment is usually a more prudent starting point for businesses that want to understand the landscape and hotspots before engaging their high-emitting suppliers.

A spend-based assessment requires you to know how much you’ve spent on goods and services, the more accurate the better. This data is then multiplied by industry average emissions factors to calculate an emissions estimate, gaining high-level insight into where the emissions live in your supply chain.

You’ll Be Surprised What We Can Do With the Data You Have

The best part? Starting with spend-based emissions assessments means you don’t need to ask anyone else for their data. You can use the spend data you have before your suppliers even know you’ve started measuring emissions.

That’s not to say you will never engage your suppliers. The limitation of spend based method becomes evident as your business and supplier spend increases, so will your emissions. This is where you will want to move to the hybrid method and incorporate actual or primary emission data from your suppliers. When you get started with supplier engagement, Emitwise will meet your supplier at their maturity level, they can produce pre-populated surveys so you’ll never have to ask your suppliers for data that’s already publicly available through to calculating their emissions for them (this occurs around half the time).

Every supply chain is unique and has its own emissions hotspots. Approaching the supply chain without a spend-based assessment means you won’t have a first indication of which parts of your supply chain emit the most.

If you don’t know who’s emitting the most, you won’t know where best to target your emissions reduction efforts. You need a clear plan for engaging your supply chain, or you’ll focus on the wrong areas and suppliers.

Your journey to net zero will be much easier if you support your suppliers in their emissions reduction efforts. Emitwise can help you start using just the data you have right now.