How carbon emissions are measured depends on the methodology deployed.

It’s important to know the differences between these methods and to know which method your GHG measurements utilise.

The GHG protocol mentions four different methodologies.

They are listed here in order of worst to best.

Spend-based method

GHG emissions are measured from ‘economic activity’. Essentially, each 1€ spent on an economic activity is converted into a carbon amount. To do spend-based carbon accounting, one needs only to look at the spend in a variety of economic activities, and then multiply that spend by the associated emission factor to arrive at the estimated carbon total. These factors are endlessly analysed and measured, but are seriously flawed in a way that anyone can see.

As an example, 1€ spent on Food And Beverage Service Activities can mean a wide variety of different activities, which would each have wildly different carbon footprints:

• 1€ spent on tap water: 0.13 grams of CO2 per litre and about 0.001€ per litre gives you 0.00013 kg CO2

• 1€ spent on filet-mignon steak: At 60€ per kg, that means you get about 17 grams of steak for one euro. Multiply by 99.48kgCO2 to get 1.66 kgCO2

But the spend-based methodology treats them the same.

Average-data method

GHG emissions for the product or service are measured by mass or another unit of measure, such as time, or service outcome. This method is one level more granular than the spend-based method. Carbon is more correlated to physical variables such as mass, and units than to economic activity. In this method, a factor will be derived for the “CO2 per cosmetic product” as opposed to “CO2 per € spent on cosmetic products”.

Still has glaring issues in that if you have two products that are completely different in their composition, packaging and distribution channels, they will be deemed equal in this method.

Hybrid method

This methodology is a combination of the two inaccurate methods above, and the more accurate, supplier-specific method mentioned below. The hybrid method is there to acknowledge that most people don’t have the good data (supplier-specific), so use whatever you can in your estimates to get a better answer.

Supplier-specific method

This method takes into account the carbon emissions of the products or services in your business activity. This method accounts for the variances between products and services by truly measuring the product carbon footprint of each. This method is the only way to have the granularity required in your carbon footprint to make decisions relating to your sustainability journey.

In the supplier-specific method, engagement with suppliers is often required, as conducting a product-level carbon footprint requires high levels of detail that many companies are intimidated by.

For example, Fairglow utilizes close to 500 different data points in the carbon footprint of a cosmetic product. Most of our clients don’t have all the data that goes into such a calculation. which is why we trained several cosmetic specific algorithms to fill in the most likely data for all the missing data gaps. The more data the supplier provides, the more confident and precise the estimates become.

All carbon measurement methodologies come with variance and uncertainty, but there is a clear difference between those who measure via Spend-based factors and those who use Supplier-specific methods. One is accurate enough to make decisions related to sustainability and the other is not.

Which method does your company use?