According to GHG Protocol, the two primary methods for calculating value chain emissions are spend-based and activity-based.

  • The spend-based method multiplies the monetary value of a purchased good or service by an emission factor - the amount of emissions produced per financial unit- which gives an estimate of the emissions produced.
  • The activity-based method involves the collection of more data, both internally and through suppliers.This method makes benefit of consumption or usage data that a company has on hand or that its suppliers have provided. The data, such as the litres of fuel burned by a vehicle or the kilogramme of plastic waste generated in operations, is multiplied by the emission factors of the activities to calculate the estimated emissions.

To estimate your value chain emissions, Faradai Sustain provides you with the option to decide the calculation method from the spend-based or the activity-based approaches.

Which Method Should I Use?

Collecting activity-based data through your supply chain may quickly become a laborious, time-consuming effort, especially because you rely on each and every supplier to undertake their own complete GHG assessment.

Spend-based approaches' computations may lack precision because their emission factors are based on the industry average greenhouse gas emissions.

Although more time-consuming to complete, the results of these activity-based calculations reveal the impact of every single product or service your business purchases, providing you with more specific and useful insights to lower value chain emissions.