When to use it
Use spend for purchases where you have nothing better: office supplies, IT, professional services, marketing, equipment. For a small firm these make up most of Scope 3 category 1, purchased goods and services, and category 2, capital goods. Don't use it for:
- Energy and fuel. Count kWh and litres instead. They're more accurate and already in your Scope 1 and 2.
- Travel you already count by distance, such as flights, trains and hotel nights.
- Things that aren't purchases: wages, tax, depreciation, loan interest and transfers.
The calculation
- Export a year of your purchase ledger from your accounting software, net of VAT.
- Take out energy, fuel, travel you count elsewhere, and anything that isn't a purchase.
- Match each remaining account or supplier to the closest industry in Defra's list.
- Multiply each amount by its multiplier and add them up.
Spend excluding VAT × the multiplier for that kind of purchase = kg CO2e. The multipliers cover emissions all the way up the supply chain, in the UK and abroad, which is why they suit Scope 3.
A worked example
A small consultancy's purchase ledger for a year, net of VAT, with energy, travel, wages and tax already removed, using the 2023 multipliers:
| What was bought | Spend (£) | kg CO2e per £ | kg CO2e | Category |
|---|---|---|---|---|
| Software and IT services | 24,000 | 0.10 | 2,398 | 1 |
| Advertising and marketing | 10,000 | 0.11 | 1,057 | 1 |
| Accountancy services | 6,000 | 0.05 | 301 | 1 |
| Meals, catering and entertainment | 3,000 | 0.26 | 779 | 1 |
| Paper and stationery | 2,000 | 0.67 | 1,338 | 1 |
| Postage and couriers | 1,000 | 0.22 | 224 | 1 |
| Computers and electronics | 8,000 | 0.54 | 4,291 | 2 |
| Total | 54,000 | 10,389 kg, or 10.39 tonnes |
The laptops are category 2, capital goods, because they're kept for several years. Report the whole purchase in the year you bought them, not spread over their life. Notice how much the multipliers vary: a pound spent on paper carries several times the emissions of a pound spent on software.
Getting the most out of it
- Start with your biggest suppliers. A handful of accounts usually make up most of the total. Ask those suppliers for their own figures and swap them in over time.
- Pick the closest match, not a catch-all. "Software and IT services" and "computers and electronics" have very different multipliers.
- Keep the mapping. Save which account went to which industry, so next year's figures are comparable.
- Label it as an estimate. Say in your method note that categories 1 and 2 use Defra's spend-based multipliers, and which year.
Is it good enough for a Carbon Reduction Plan?
A PPN 006 Carbon Reduction Plan doesn't require category 1 or 2. But customers asking for a full Scope 3 picture, including the NHS for larger contracts from April 2027, will expect them, and the spend-based method is the accepted way to start. Spend-based figures go up and down with prices as well as with emissions, so a reduction target is better tracked with activity data or supplier figures for your biggest purchases.
How Carbon Recycling helps
Upload a CSV export of your purchase ledger from Xero, QuickBooks, Sage, FreeAgent or any other package, and Carbon Recycling suggests a Defra multiplier for each account, leaves out wages, tax and anything you already count as energy or fuel, and shows the result as an estimate you can refine. Our post on answering customer carbon questionnaires covers how to describe it.