What does "Activity Based Method" mean ?

The Activity Based Method serves as the second main method used to calculate emissions in carbon accounting, and is more precise than the spend-based method. This is because the Activity based allows for more specific calculations.

This is because the Activity based method uses data to determine how many units of a certain item have been acquired, leading to more specific calculations.

FAQ

How Does the Activity Based Method Work?

The Activity-Based Method works by using precise, real-world activity data such as the amount of electricity consumed (kWh), liters of fuel burned, or kilograms of waste generated – all of which lead to more precise emissions calculations. Estimates and proxies can also be used. Each activity is paired with a specific emission factor that reflects the actual carbon output for that activity type. As opposed to the Spend-Based Method, this method, depending on the accuracy of the activity data and emission factor quality, provides extremely accurate results – as it  focuses on the details related to the carbon impact of operations in place of relying on average estimates. 

An example of the Activity-Based method is if a company’s group of vehicles uses 10,000 liters of diesel in a year, and then the company would multiply that figure by the emission factor for diesel fuel to provide an exact estimate of the fleet’s CO₂e emissions.

Spend Based vs. Activity Based Method

The Spend-Based Method calculates emissions using financial data via the use of emission factors – making it a faster method to determine a company’s emissions, especially when  supplier-specific or activity data is unavailable. However, the con of the spend-based method is that it could potentially be inaccurate due to the generalizations made for the calculations.

The Activity-Based Method, on the other hand, relies on actual activity data including kWh used, liters of fuel, or kilograms of waste in combination with specific emission factors for each activity. This approach allows for greater precision, making it ideal for detailed carbon accounting. That being said, this method requires more extensive data collection and coordination. 

Both methods can be successful when used together depending on data availability and goals. At Greenly, we use a combination of both the activity based and spend based methods to allow for utmost accuracy to help develop the best carbon reduction strategy possible for your business.