Climate & Environment
Spend-Based Method (Scope 3)
Definition
The spend-based method estimates Scope 3 greenhouse gas emissions by multiplying the money spent on purchased goods and services by environmentally extended input-output (EEIO) emission factors for the relevant sector and region. It is the lowest-granularity method in the GHG Protocol's Scope 3 hierarchy — quick, covering everything, and useful for hotspot screening — but it reflects sector averages rather than supplier-specific performance, so improvements by actual suppliers may not register.
References
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This reference provides supporting context for how “Spend-Based Method (Scope 3)” is defined and used.
Overview
How it is used
The method structures first-pass Scope 3 inventories, science-based target screening, and prioritisation of supplier engagement; standards require disclosing the method mix used.
Why it matters
The spend-based method is the scaffolding of Scope 3 accounting — essential for building, embarrassing to leave standing.