The GHG Protocol treats the spend-based method as the fallback for purchased goods and services, to be used when more specific methods are not feasible. It also requires companies to disclose how much of their Scope 3 figure came from supplier data in the first place.
Summary
- The spend-based method multiplies procurement spend by an economic emission factor. It responds to spend, not to supplier decarbonisation.
- The GHG Protocol Technical Guidance treats the spend-based method as the fallback for Category 1, used when the supplier-specific, hybrid and average-data methods are not feasible.
- The GHG Protocol ranks levels of data by specificity, from product-level down to corporate-level, and asks companies to collect data as specific to the purchased product as possible.
- Companies are required to report the percentage of emissions calculated using data obtained from suppliers or other value chain partners.
- The standard is realistic about the limits: it states it is unlikely that all relevant suppliers will be able to provide inventory data, and directs companies to use secondary data where supplier data is not available.
What Does the Spend-Based Method Actually Do?
The spend-based method takes the economic value of a purchased good or service and multiplies it by an environmentally-extended input-output emission factor expressed per unit of currency ghgprotocol.org.
- Categorise spend by product or service type.
- Apply a cradle-to-gate emission factor per unit of economic value.
- Multiply spend by factor to produce an estimated figure.
- Aggregate across categories.
Because the factor is fixed for a product category, a supplier that switches to renewable electricity does not change the buyer's reported number. Reducing spend does. That is a property of the method, not a flaw in how it is applied, and it is why the method's position in the guidance matters.
Where Does the GHG Protocol Actually Place Each Method?
It is worth being precise here, because this is frequently paraphrased as a single ranked "data quality hierarchy", which is not how the standard is written.
The Technical Guidance for Category 1, Purchased Goods and Services, sets out the order directly: if the supplier-specific method, hybrid method and average-data method are not feasible, for example due to data limitations, companies should apply the average spend-based method ghgprotocol.org. Spend-based is the fallback, stated as such.
Separately, the Scope 3 Standard sets out a hierarchy of levels of data, ranked in order of specificity. This one is about granularity of primary data rather than choice of method:
The instruction attached to it is that companies should seek data from suppliers that is as specific as possible to the product purchased, because product-level data avoids the need for allocation ghgprotocol.org.
Specific Is Not the Same as Accurate
This is the caveat that keeps the whole argument honest, and it comes from the guidance itself rather than from a critic of it.
Box 1.1 of the Technical Guidance, headed "The difference between data specificity and data accuracy", states that although the supplier-specific and hybrid methods are more specific to the individual supplier, they may not produce results that more accurately reflect the product's contribution to the reporting company's Scope 3 emissions.
It goes further: data collected from a supplier may actually be less accurate than industry-average data for a particular product ghgprotocol.org.
Accuracy derives from the granularity of the emissions data, the reliability of the supplier's data sources, and which allocation techniques were used. So "get supplier data" is not the whole instruction. Getting supplier data that is granular, reliably sourced and consistently allocated is.
What Companies Are Required to Disclose
This is the part that gives supplier data reporting consequences rather than being a matter of preference.
Section 11.1 of the Scope 3 Standard, under required information a company shall publicly report, obliges companies to report for each Scope 3 category the percentage of emissions calculated using data obtained from suppliers or other value chain partners ghgprotocol.org.
Two things are worth noting. It is per category, not a single blended figure. And it has been a requirement of the standard since 2011, independent of any jurisdiction's regulation, which makes it the durable anchor for this metric.
IFRS S2 asks a related question. Its requirements cover disclosing the extent to which Scope 3 emissions are measured using inputs from specific activities within the entity's value chain ifrs.org.
CDP operationalises the same disclosure, asking for the percentage of emissions calculated using data obtained from suppliers or value chain partners alongside the methodology used cdp.net. It is implementing the GHG Protocol requirement rather than adding one of its own.
Where Practice Currently Sits
Two things are true at once: supplier data is what the standard asks companies to work towards, and most companies are not there yet.
MIT's 2025 State of Supply Chain Sustainability survey, covering 1,203 professionals across 97 countries, reports that the single biggest obstacle to Scope 3 measurement is supplier data availability, ahead of methodological fragmentation and calculation complexity sustainable.mit.edu.
The disclosure data matches. A peer-reviewed analysis of companies reporting Category 1 emissions to CDP in 2023 found that 63% of 4,446 companies declared a spend-based approach doi.org.
So spend-based is not a fringe shortcut. It is what most of the market currently reports on, which is why the required percentage disclosure matters more than any assertion about method quality.
What Primary Data Requires From a Supplier
Primary data means activity or emissions information reported by the supplier rather than a factor applied on their behalf. The Scope 3 Standard sets out what a buyer may reasonably request, including Scope 1 and 2 emissions for the reporting year, the methodologies and data sources used, the allocation method applied, and whether the data has been assured ghgprotocol.org.
The standard also sets expectations about coverage. It states that it is unlikely all of a company's relevant suppliers will be able to provide GHG inventory data, and that companies should use secondary data where supplier-specific data is not collected or is incomplete. Where suppliers cannot yet report, the guidance is to encourage them to develop inventories over time.
That balance matters. Supplier-reported data improves what a disclosure can demonstrate, but the standard does not treat secondary data as illegitimate.
A Direct Comparison
How to Move Without Stalling a First Disclosure
The standard's own guidance on prioritisation is the practical route. Companies should identify priority categories through screening, then focus supplier data collection there, and may select suppliers by their contribution to total spend.
- Publish an initial disclosure using available methods, labelled with the methods used.
- Screen categories to identify where emissions concentrate.
- Engage tier 1 suppliers in priority categories first, since these are the suppliers with a contractual relationship.
- Request data as specific to the purchased product as the supplier can provide, following the specificity hierarchy.
- Track the percentage calculated from supplier data each cycle, since it is a required disclosure.
Frequently Asked Questions
Is the spend-based method ever acceptable?
Yes. The Technical Guidance directs companies to it where the supplier-specific, hybrid and average-data methods are not feasible, and the Scope 3 Standard directs the use of secondary data where supplier data is not collected or is incomplete.
What percentage of Scope 3 has to come from supplier data?
The standard sets no threshold. It requires disclosure of the percentage calculated using data obtained from suppliers or other value chain partners, which makes the proportion visible rather than mandating a level.
Why can't a better estimation model replace supplier data?
Because a spend-based factor is fixed for the product category. The output changes when spend changes, so it cannot reflect an individual supplier's operational or energy-mix change.
What should a buyer ask a supplier for?
Scope 1 and 2 emissions for the reporting year, the methodology and data sources used including emission factors, the allocation method applied, and whether the data has been assured.
About Gprnt
Gprnt is sustainability data infrastructure launched by the Monetary Authority of Singapore (MAS) and operated by the Global Finance & Technology Network (GFTN), built as open digital infrastructure accessible to businesses of every size.
Its Value Chain Intelligence pillar connects enterprise buyers with supplier-reported ESG data across procurement and financing, using automated data integrations and a verified emission factor database. Entry-level Scope 1 and 2 reporting is free for SMEs, which lowers the barrier to suppliers participating in a buyer's Scope 3 programme at all.
If supplier data collection is the constraint in your Scope 3 disclosure, visit gprnt.ai.
References
- GHG Protocol, Corporate Value Chain (Scope 3) Accounting and Reporting Standard, section 7.4 and table 7.7 (ghgprotocol.org)
- GHG Protocol, Technical Guidance for Calculating Scope 3 Emissions, Category 1 (ghgprotocol.org)
- CDP, Full Corporate Questionnaire, Module 7 (cdp.net)
- IFRS Foundation, Greenhouse gas emissions: IFRS S2 educational material (May 2025) (ifrs.org)
- MIT Center for Transportation and Logistics and CSCMP, State of Supply Chain Sustainability 2025 (sustainable.mit.edu)
- Davis et al. (2025), Nature Communications (doi.org)