Greenhouse Gas Protocol: Spend-based and activity-based methods

Last updated: November 20, 2025

The Greenhouse Gas (GHG) Protocol is the most widely used framework for measuring and managing greenhouse gas emissions used by over 90% of Fortune 500 companies. It guides organizations in tracking their Scope 1, 2, and 3 emissions and identifying opportunities for improvement.

At Coolset, we base all emissions calculations on this protocol. Two key methods we use are the spend-based and activity-based approaches.

Spend-based method

What it is?

This method estimates emissions based on how much money a company spends on goods and services. It uses emission factors that link spending to environmental impact.

How it works?

  1. Identify spending categories (e.g., travel, office supplies, energy).

  2. Gather financial data for each category.

  3. Apply emission factors (e.g., kg CO₂e per euro spent).

  4. Multiply spend by the factor to estimate emissions.

Coolset uses a library of over 18,000 spend-based emission factors to ensure comprehensive coverage.

Advantages

  • Easy to implement with basic financial data

  • Covers a wide range of goods and services

  • Quick to calculate, ideal for high-level overviews

Example

A company spends €10,000 on office supplies.
Emission factor: 0.1 kg CO₂e per euro
Result: 10,000 × 0.1 = 1,000 kg CO₂e

Activity-based method

What it is?

This method uses real-world activity data, like electricity use or fuel consumption, to estimate emissions more precisely.

How it works?

  1. Identify emission-generating activities (e.g., energy use, travel).

  2. Collect detailed activity data (e.g., kWh, liters, km).

  3. Apply specific emission factors.

  4. Multiply data by the factor to calculate emissions.

Advantages

  • More accurate due to direct measurements

  • Provides insights into specific emission sources

  • Supports targeted reduction strategies

Example

The company uses 5,000 liters of diesel.
Emission factor: 2.68 kg CO₂e per liter
Result: 5,000 × 2.68 = 13,400 kg CO₂e

When to use each method?

Use case

Spend based

Activity-Based

You don’t have detailed data

✅

❌

You need fast, broad estimates

✅

❌

You have access to specific usage data

❌

✅

You need precise tracking or compliance

❌

✅

Coolset’s Approach

We recommend a hybrid approach, using spend-based data when activity data isn’t available, and switching to activity-based methods where precision is needed. This balances accuracy with practicality.