Monetary or activity-based approach?
To compute a company's Greenhouse Gas (GHG) emissions, Greenly uses a two-step approach: an initial estimation using a monetary approach and then an activity-based approach to fine-tune the estimation for significant emission sources. For significant emission sources, the activity-based approach should always be preferred.
Monetary approach
Greenly computes the carbon footprint of each expense by analysing, categorising and then multiplying the amount associated with a transaction by a monetary emission factor. The result is an estimation of the carbon footprint (kgCO2e) associated with the expense.
Which monetary emission factor should be chosen?
By analysing and categorising transactions using our algorithm, Greenly can identify the most relevant emission factor to use to estimate GHG emissions linked to an expense.
These monetary emission factors are computed using three methods:
For a product: when it's possible to estimate the quantity purchased using the price paid by the company. This is the case, for example, for the purchase of raw materials, for transport or for the electricity consumption of a building.
In this case, GHG emissions resulting from a purchase are computed using an activity-based emission factor (kgCO2e per L/gallon, km/miles, kg/lbs, etc.) and an estimation of the physical flow (based on the amount of the transaction).For a service: when the company providing the service computes and reports its GHG emissions. E.g. for insurance contracts, software licences or bank fees.
In this case, the amount of the transaction is multiplied by the ratio of the company's total emissions divided by its turnover.
By market sector: when the two methods detailed above are not possible due to a lack of data.
In this case, a monetary emission factor for a set of products (goods or services) can be computed using environmental data (GHG emissions generated) and economic data (expenditure and income) of a given market sector.
Activity-based approach
To specify some estimations of GHG emissions, it is necessary to carry out activity-based studies. In this case, physical data (L/gallon, km/miles, kg/lbs, etc.) are multiplied by activity-based emission factors.
Example
A 7.5 t lorry transports 1,500 kg of goods over a distance of 100 km.
The corresponding GHG emissions are computed as follows:
GHG Emissions = 0.378 kgCO2e/t.km (EF of the lorry) * 1.5 t * 100 km = 56.7 kgCO2e
❗ When carrying out activity-based studies, one needs to avoid double counting the same GHG emissions several times: