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9 May 2024 Glossary

What is the advantage of activity-based data

The Greenhouse Gas Protocol suggests two primary data methods for calculating emissions, those are called activity-based data and spend-based data. The choice of which data method to use depends on the purpose of the data collection (e.g. Estimations vs. Compliance), the type of data (e.g. Fuel, transport or purchases of goods) or the availability of data (e.g. from suppliers, internal systems, or databases).

By Klappir

Activity based vs. spend based

Activity-Based Accounting:
This approach primarily focuses on measuring environmental impacts based on actual consumption (kg, liter, m3, kWh etc). Amounts can be compared year-over-year, regardless of price fluctuations and other impacts. Therefore, it is more accurate to calculate based on activity-based data. However, this data is not always available in-house, which is why it sometimes can be harder to obtain. The data often has to be sourced from suppliers directly, or from sub-meters installed.

Example: If you buy 100 kg of steel one year, and buy 100 kg of steel next year, the CO2 will be the same. You have equal amounts of material both years.

Spend-Based Accounting:
This method is good for estimating environmental impacts and is based on financial expenditures. It's calculated based on the principle that every dollar spent has an associated environmental impact, which can be derived from industry averages. An amount paid for a certain type of product equals a certain level of emissions. However, this is not a very accurate method, as it may be vulnerable to price changes (due to inflation, exchange rates, time of purchase, quality of goods and services bought, or discounts etc.).

Example: With the spend-based approach you will calculate that if you are buying 100 apples for 100 $ the first year, but you get a 10% discount the next year, your CO2 emissions will look 10% lower compared. Also, if you are buying a standard table for 1000 € the first year, but go for a higher quality designer table next year and pay 2000 €, then your emissions will also be 100% higher. Although, in reality you might have chosen the higher quality products because they were also produced in a more environmentally friendly way. The spend-based data is often available on invoices or in any financial bookkeeping software that the company uses, which is why it is easy to access. Therefore this data is good for estimations or to cover data gaps, where activity data is not available. It should not be used for a baseline or benchmarking, as that can be highly misleading and volatile.

Why you should strive to obtain activity data
According to the Greenhouse Gas Protocol, activity-data ensures numbers that can describe the company’s impact and consumption more accurately and detailed. It increases transparency, credibility and comparability of a company's activities.

Klappir distinguishes itself by focusing on activity-based data rather than spend-based, and takes pride in helping our customers achieve a higher level of activity-based data in their reporting. That entails collecting data from suppliers, e.g. utility companies, on your actual consumption and your actual activities.

Therefore, we can link your overall activities to individual activities, so that you get a detailed overview and analytics and compare your assets over time.

By Klappir9 May 2024

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