Close

Expenditure

This section covers emissions from the supply chain over which you have no direct control beyond the decision whether or not to purchase goods and services.

Supply chain emissions are also sometimes called embedded emissions – the emissions that are typically hidden, and often claimed by nobody. Including them in the calculator allows you to have a better understanding of your impact.

Calculations are based on the use of Proxy Emissions Factors.

Proxy Emissions Factors

Proxy Emissions Factors (Proxies) are a way of relating the carbon emissions of an activity (or group of activities) to the amount spent on those activities. Those activities typically fall into Scope 3 and are often related to the supply chain over which an organisation has little, if any, control.

The Office for National Statistics produces a file of Standard Industrial Classification (SIC) Codes. They are used in classifying business establishments and other statistical units by the type of economic activity in which they are engaged. SIC Codes are broken down in to 21 Sections, 88 Divisions, 272 Groups, 615 Classes with 191 Subclasses.

Until 2011, the Department for Rural Affairs (Defra) produced yearly emissions factors relating CO₂ to amount (in £) spent. They grouped the SIC Codes into 106 categories corresponding to the 88 Divisions with some Divisions being further broken down. This data is still available but Defra advise that the factors be discounted to allow for changes in the value of the pound and improvements in efficiency over the years.

Every year we re-calculate our proxy emissions factors based on the most current CPI data from the Office of National Statistics (ONS).

Our methodology:

• Calculate year on year percentage change to the Defra factors from 2007 to 2011.
  
• From each resulting percentage remove that year’s inflation percentage (CPI data). This leaves what could be described as the “change due to efficiency”.
  
• Take the average of the efficiency percentage change from 2007–11 – this gives a trend of percentage change over time.
  
• This trend of percentage change, along with CPI data from 2012 onwards is then used to calculate new factors for 2012 to the current year.

The proxy factors used (as identified by their SIC Code) are:

Code	SIC Code Category	Expenditure Category
10	Manufacture of food products	Pet food
14	Wearing apparel	Clothing
17	Paper and paper products	Stationery
26	Computer, electronic and optical products	Computers and Electronics
27	Electrical equipment	Electrical Appliances
31	Furniture	Furniture
41-43	Construction	Home Maintenance
45	Wholesale and retail trade and repair services of motor vehicles and motorcycles	Car Maintenance
53	Postal and courier services	Postage and Couriers
55	Accommodation and Food Service Activities	Hotel Stays
56	Food and beverage serving services	Eating Out
58	Publishing services	Magazines and Books
61	Telecommunications services	Telephone and Internet
65.1-3	Insurance, reinsurance and pension funding services, except compulsory social security & Pensions	Insurance
69.1	Legal services	Other Legal
93	Sports services and amusement and recreation services	Sport Recreation
96	Other personal services	Hair and Selfcare

Where possible it is always preferable to use direct data (for example, kWh of electricity used) in conjunction with a BEIS emissions factor. But since that data isn’t always available a proxy serves as the “next best thing”.

Proxies, in effect, show the carbon intensity of your activities and are a way of estimating the emissions from complex areas that can’t easily be broken down into their constituent parts. Proxies are a useful indicator of your carbon footprint but do have limitations since they are based on highly aggregated data from a range of sectors and sources.

Because there are a limited number of codes, but a huge range of activities with a carbon footprint the closest SIC Code-based category must be identified. There is always the possibility that an activity could fit into a number of SIC Code categories depending on how it is defined. In those instances, we have chosen the smallest proxy so as not to unduly over-estimate your carbon footprint.