How to Estimate Purchased Goods and Services Emissions

Introduction

For many small and growing businesses (SMEs), the largest part of their carbon footprint comes not from energy use or travel, but from purchased goods and services — materials, packaging, professional services, and subcontracted work.

Under the Corporate Sustainability Reporting Directive (CSRD) and ESRS E1 (Climate Change), these fall under Scope 3, Category 1 emissions. The VSME Standard (EFRAG, 2024) confirms that SMEs can use reasonable estimates or industry averages where primary supplier data is unavailable.

This guide explains practical methods to estimate purchased goods and services emissions, how to prioritise suppliers, and how to disclose your results proportionately.

For a detailed overview of subcontractor reporting, see Do I Need to Report Subcontractor Emissions?.

1. Understanding Category 1 (Purchased Goods and Services)

Category 1 includes all upstream emissions from the production, processing, and transport of goods and services you purchase — from office supplies to raw materials and outsourced services.

Examples:

• Office furniture and electronics
• Raw materials or packaging
• External manufacturing or fabrication
• Marketing, consulting, or cleaning services

Essentially, anything your company pays for that supports operations but isn’t energy or capital goods.

These emissions are indirect — you don’t produce them, but you are responsible for the demand that drives them.

2. Choosing an Estimation Method

SMEs can choose between three practical estimation methods depending on data availability:

For most SMEs, start with spend-based calculations and gradually move toward supplier-based reporting over time.

3. Using Spend-Based Estimation (Most Common for SMEs)

The spend-based method multiplies your spend per purchase category by an emission factor representing average CO₂e per euro spent.

Formula: Emissions (kg CO₂e) = Spend (€) × Emission factor (kg CO₂e/€)

Typical emission factors (EU averages from EEA/DEFRA 2024):

Example:

€80,000 spent on construction materials × 0.45 = 36,000 kg CO₂e (36 tCO₂e) €20,000 on office supplies × 0.25 = 5,000 kg CO₂e (5 tCO₂e) → Total = 41 tCO₂e

Round results sensibly (1–2 decimals for tonnes) and disclose sources for all factors used.

For broader data estimation guidance, see How to Estimate Missing Data for CSRD Reporting.

4. Activity-Based Estimation (If Quantity Data Is Available)

If you know the amount of material purchased (e.g. kilograms or units), multiply that by a material-specific emission factor.

Example: You purchase 12 tonnes of steel. Emission factor: 1.9 tCO₂e/tonne (EU average). → 12 × 1.9 = 22.8 tCO₂e

Common material factors (EEA 2024):

• Aluminium: 9.2 tCO₂e/t
• Plastic packaging: 2.5 tCO₂e/t
• Cardboard packaging: 1.0 tCO₂e/t
• Concrete: 0.15 tCO₂e/t

If quantities are partial or mixed, you can combine spend- and activity-based approaches for different suppliers.

5. Supplier-Based Estimation (For Advanced SMEs)

If your key suppliers track their own carbon data, you can request supplier-specific emission factors. This improves accuracy and builds alignment along your value chain.

Ask suppliers to provide:

• Carbon footprint per product or service (kg CO₂e/unit or €)
• Boundary definitions (Scope 1–3 coverage)
• Data source or certification (e.g. ISO 14064, GHG Protocol)

Suppliers’ verified data should gradually replace generic factors in your calculations.

6. Disclosing Purchased Goods and Services Emissions

Under ESRS E1-6 and VSME B7, disclose:

1. Total estimated emissions for purchased goods and services.
2. Estimation method(s) used (spend-, activity-, or supplier-based).
3. Emission factor sources (EEA, DEFRA, ADEME, etc.).
4. Plans for improvement in data quality.

Example disclosure:

“Scope 3 Category 1 emissions were estimated at 85 tCO₂e in 2025 using spend-based methods. Emission factors were sourced from DEFRA (2024) and applied to supplier spend data by category. Supplier-specific data collection will begin in 2026 for top material suppliers.”

This satisfies CSRD’s requirements for transparency, traceability, and proportionality.

7. Improving Accuracy Over Time

As your data maturity grows:

• Request emission data from your top 5–10 suppliers.
• Categorise spend by material type (e.g. metals, packaging, IT).
• Automate spend mapping via accounting or ERP software.
• Review emission factors annually.

By your second or third reporting year, you should have a mix of spend-based and supplier-based data, aligning with limited assurance expectations.

Frequently Asked Questions

Do I need to include all suppliers?

No. Focus on those representing 80–90% of total spend or emissions. Low-value purchases can be estimated collectively.

What if my suppliers are outside the EU?

Include them — location doesn’t exempt the emissions. Use region-appropriate factors or EU averages where specific data is unavailable.

Should I separate goods and services?

Yes, where possible. Goods (materials, products) usually dominate emissions, while services (consulting, cleaning) have lower intensity.

Can I use the same emission factors every year?

Yes, but review annually. If new factors are published (e.g. EEA 2025), update and document the change.

Key Terms

• Scope 3 Category 1 – Indirect emissions from purchased goods and services.
• Spend-based estimation – Using financial spend multiplied by an emission factor.
• Activity-based estimation – Using quantities purchased multiplied by material factors.
• Supplier-specific data – Emissions reported directly by suppliers.
• VSME Standard – Simplified sustainability reporting standard for SMEs.

Conclusion

Estimating emissions from purchased goods and services is one of the most impactful steps in your Scope 3 reporting. Start with spend-based data, improve over time with supplier input, and disclose transparently.

This practical, proportionate approach aligns with both CSRD and VSME expectations, helping SMEs report credibly without overcomplicating data collection.

For a full overview of Scope 3 reporting priorities, see Which Scope 3 Categories Do SMEs Actually Need to Report?.

To help you calculate emissions from purchased goods and services, use our emission estimator:

This tool will help you estimate emissions from purchased goods and services using standard emission factors and spend-based calculations.