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Supplier Emission Factors

How is a SEF computed? What quality checks are carried out?

Support @Greenly avatar
Written by Support @Greenly
Updated over a month ago

A Supplier Emission Factor (SEF) is a monetary ratio that can be used in the expense module. It is linked to a specific company and is computed by dividing the company’s GHG emissions by its revenue (kgCO2e / currency).

🧮 How are SEFs computed?

To compute a supplier emission factor, we collect information disclosed by the company. It can be in a report published by the company (e.g. sustainability report, consolidated report), via a public disclosure platform (e.g. CDP), or via a survey or GHG report carried out by Greenly. 

💡 SEF = (Scope 1 + Scope 2 location-based + Scope 3 Upstream) / Revenue

If the required information is not available, there may be some flexibility

  • Scope 2 market-based GHG emissions can be used.

  • Total Scope 3 GHG emissions can be used (i.e. upstream + downstream)

  • Partial Scope 3 GHG emissions may be used, provided that significant categories for the sector are included, with a minimum of Category 1 – Purchased Goods and Services for all sectors.

  • Revenue may be estimated or extrapolated.

🤔 When should a SEF be used?

A SEF is only created for companies in certain sectors, primarily the service and tech sectors. The key principle is to create a SEF only for the calculation of GHG emissions:

  • When an activity-based study is not feasible.

  • When there is an increase in calculation accuracy compared to a generic average monetary emission factor.

  • When the company has a single core activity and not diversified businesses.

The SEF is also systematically compared to a benchmark value to ensure consistency (the average of SEFs for a given sector).

📌 Minimum Requirements

Mandatory Data

  • Company Name

  • Greenly Industry

  • Sustainability or GHG Inventory Report

  • Inventory Year

  • Scope 1 (tCO2e)

  • Scope 2 (tCO2e)

  • Scope 3 - Total (tCO2e)

  • Report (disregard if this is the same report as the GHG inventory)

  • Revenue (millions)

  • Currency

  • Revenue Year (should be the same as GHG inventory)

Highly Recommended Data

  • Scope 2 - Location Based (tCO2e)

  • Scope 2 - Market Based (tCO2e)

  • Scope 3 - Upstream (tCO2e)

Recommended Data

  • Company Short Description

  • Company Identifier (e.g., NACE, ISIC, NAICS code)

  • Company Website

  • Scope 3 - Breakdown per category

  • Scope 3 - Purchased goods and services (tCO2e)

  • Scope 3 - Capital goods (tCO2e)

  • Scope 3 - Fuel- and energy-related activities not included in Scope 1 or Scope 2 (tCO2e)

  • Scope 3 - Upstream transportation and distribution (tCO2e)

  • Scope 3 - Waste generated in operations (tCO2e)

  • Scope 3 - Business travel (tCO2e)

  • Scope 3 - Employee commuting (tCO2e)

  • Scope 3 - Upstream leased assets (tCO2e)

  • Scope 3 - Downstream transportation and distribution (tCO2e)

  • Scope 3 - Processing of sold products (tCO2e)

  • Scope 3 - Use of sold products (tCO2e)

  • Scope 3 - End-of-life treatment of sold products (tCO2e)

  • Scope 3 - Downstream leased assets (tCO2e)

  • Scope 3 - Franchises (tCO2e)

  • Scope 3 - Investments (tCO2e)

Done by Greenly

  • Greenly Category Name

  • Report Audit Check

  • SEF Calculation

  • Benchmark Quality Check

  • Validation?

  • Justification if not validated

✅ Quality Checks

A confidence index and accuracy gain ratio will be computed and provided for each SEF.

How are uncertainties computed?

Step 1: Validate Scope 1, 2, 3 GHG Emissions Calculation

  • Who undertook the study?

    • Is a justification document provided?

    • Who computed the GHG emissions? E.g. Carbon accounting software, consulting firm, internal computations.

    • Is the report audited, validated by a third party?

    • Were the results published on a public website? E.g. Company website, CDP

  • Are all Scopes included? Is Scope 2 location-based or market-based? Are all Scope 3 categories included?

  • What Emission Factors used? Are the sources reliable?

  • What is the percentage of spend-based versus activity-based data?

Step 2: Validate Turnover

  • Is it provided by the company or computed via sector average (turnover per employee)?

  • Is it the same year as the GHG inventory?

Step 3: Validate MEF - Benchmark Comparison

  • Select an industry. If the company doesn't have single core activity but not diversified businesses, the SEF shouldn't be created.

  • Compare SEF to the benchmark value of companies in the same sector.

  • The SEF must be included in the interval [Benchmark / ( 1 + 100%) ; Benchmark * ( 1 + 100%)]

Step 4: Validate MEF - Average MEF Comparison

  • Compare SEF with the closest generic average MEF provided by Exiobase, USEEIO or Base Empreinte.

  • The SEF must be included in the interval [Average MEF / ( 1 + 300%) ; Average MEF * ( 1 + 300%)]

Step 5: Create SEF

  • If the SEF validates the benchmarks checks, create the SEF and compute the confidence index.

  • If not validated, justify why the SEF wasn't created.

🧩 Example

Example 1 - Digital And Software Sector

  • Company X shared it's 2024 GHG report, it was done with a carbon accounting platform.

  • The following details were provided:

    • Scope 1: 1.78 tCO2e

    • Scope 2 - Location-based: 0.93 tCO2e

    • Scope 2 - Market-based: 0 tCO2e

    • Scope 3 - Upstream: 881 tCO2e

    • Scope 3 - Downstream: excluded

    • Scope 3 - Total: 881 tCO2e

  • The 2024 revenue was also shared: €9,250,273

  • The SEF is computed: SEF = 0.096 kgCO2e/€

  • For that sector, the benchmark value is 0.062 kgCO2e/€.

  • The SEF for company X is included in the confidence interval and hence is created.

  • The confidence score for this SEF is high as

    • All 8 upstream Scope 3 GHG Protocol categories were provided,

    • The report was done be a well known carbon accounting software company,

    • And the revenue is sourced for the financial statements of company X.

  • The uncertainty is also computed and equal to 30%.

Example 2 - Audit And Consulting Sector

  • Company Y shared it's 2024 GHG report, it was done by a consulting company and audited by an independent third party.

  • The following details were provided:

    • Scope 1: 36,959 tCO2e

    • Scope 2 - Location-based: 18,958 tCO2e

    • Scope 2 - Market-based: 0 tCO2e

    • Scope 3 - Upstream: 553,806 tCO2e

    • Scope 3 - Downstream: excluded

    • Scope 3 - Total: 553,806 tCO2e

  • The 2024 revenue was also shared: $64,900,000,000

  • The SEF is computed: SEF = 0.0094 kgCO2e/$

  • For that sector, the benchmark value is 0.031 kgCO2e/€.

  • The SEF for company Y is not included in the confidence interval and hence is not created.

  • The justification is the following: Scope 3 emissions only included Category 1 - Purchased Products and Services.

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