Why spend-based factors are limited
Spend-based factors multiply expenditure by an industry-average emission intensity. They are simple but crude. They ignore actual quantities, supplier performance, regional differences and material composition. They also make reduction targets hard to set because a reduction in spend does not necessarily mean a reduction in emissions.
Activity-based approaches use the data you already have
Many organisations already record quantities: kilowatt-hours of electricity, litres of fuel, kilometres flown, tonnes of freight, square metres of floor space. Where these activity records exist, they should be used instead of or alongside spend data. Activity-based calculations are more accurate and more actionable.
Supplier-specific data is the long-term goal
The most reliable Scope 3 inventories use supplier-reported emissions for the categories that matter most. This requires a supplier engagement programme, clear data-quality requirements, and a process for handling missing or poor-quality data. It takes time, but it is the only way to produce numbers that are both credible and useful for decision-making.