💰
Spend-based PCF Calculation
One way to calculate PCFs is not activity-based, whereby a product's life cycle is analyzed from resource extraction via production and distribution to use and EOL - but spend-based, whereby the product's price and its product category serve as sole indicators.
--> unit: kg CO2e / € spent
spend-based EF are expressed in basic prices (price at the factory gate without taxes) and incorporate upstream emissions
SPEND BASED | ACTIVITY BASED |
low effort - low accuracy | high effort - higher accuracy - higher risk |
higher comparability because 1 source covers all | comparability depends on assumptions: can differ between sources of emission factors |
data is mostly available (from procurement or accounting department) | due to complex supply chains and limited traceability product data is often unavailable ⟶ proxies needed ⟶ can lead to inaccurate results |
ADVANTAGES | DISADVANTAGES |
easy and quick starting point to calculate PCFs or Scope 3 emissions | very generic: no differentiation between products in one product category |
| spend is a bad proxy: volatility of CO2e results due to externalities (e.g., inflation, price reductions) --> when a price discount is offered, the PCF decreases, while in reality nothing changes
--> higher priced goods, luxury brands lead to a higher PCF compared to no-name products |
| not possible to base climate action on this
--> no hotspot analysis
--> no quantification of reduction measures |
Last modified 6mo ago