Introduction
This guide provides a practical step-by-step approach for reporting Scope 3.1 Purchased Goods & Services (PG&S) emissions using the spend-based method, in accordance with the Greenhouse Gas (GHG) Protocol. The method leverages your company’s annual financial ledger to allocate emissions accurately to relevant spend categories. Follow these steps to ensure efficient Scope 3.1 reporting within the KEY ESG platform.
Distinguishing between scope 3.1 and scope 3.2
Companies may have entries for both Scope 3.1 (Purchased Goods & Services) and Scope 3.2 (Capital Goods). Here are some quick tips to distinguish between the two:
Scope 3.1: Purchased Goods & Services
Covers operational expenditures (OPEX) related to goods and services purchased for day-to-day business activities.
Examples: Office supplies, IT services, consulting fees, and raw materials.
Scope 3.2: Capital Goods
Covers capital expenditures (CAPEX) related to long-term assets that provide value beyond the reporting year.
Examples: Machinery, company vehicles, buildings, and infrastructure investments.
Key Tip: If the purchased item is used immediately or for a short-term operational purpose, it likely falls under Scope 3.1. If it is a long-term investment that is depreciated over time, it belongs in Scope 3.2.
Step 1: Retrieve your full year's ledger
Your finance team should provide the annual ledger containing all expenditure records for the year. Ensure that this includes detailed descriptions of vendors, services, and goods purchased.
Step 2: Remove internal credits/debits
Before processing the data, eliminate any internal transfers, reimbursements, or intra-company transactions, as these do not contribute to Scope 3.1 emissions.
Step 3: Review the Scope 3.1 Categories
Familiarise yourself with the KEY ESG spend-based template, which includes all available Scope 3.1 categories derived from DEFRA. This will help ensure accurate classification.
View the full Spend-Based Categories template. You can see this by clicking 'expand' in the drop down menu.
Refer to the official SIC hierarchy for industry-standard classifications: ONS SIC Hierarchy.
Step 4: Map Your Expenditure to KEY ESG Scope 3 Categories
Identify patterns in your spending – Look for recurring supplier names, services, or goods purchased.
Align your expenditure with the closest matching category from the KEY ESG spend-based template.
Use the following best practices to improve accuracy:
Group similar purchases together.
If a transaction spans multiple categories, allocate proportionally.
Use supplier data where available to refine mapping.
Step 5: Upload the finalised list to KEY ESG
Once you have mapped your expenditure, upload your Scope 3.1 data into the KEY ESG platform using one of the following methods:
Option 1: manual entry (recommended for small datasets)
Navigate to the Scope 3.1 module.
Enter each category row by row by selecting the product/service, purchase value, and adding a description.
Use the search bar to find and select the correct category.
Option 2: bulk upload (recommended for large datasets)
Download the Excel template from the KEY ESG platform, which contains a full list of available categories.
Fill in your mapped data.
Follow the bulk upload flow to submit all your entries in a few clicks.
Review and confirm that all data is correctly assigned.
