What is Purchased Goods & Services (PG&S) in the Context of the GHG Protocol?
Purchased Goods & Services (PG&S) refers to all the products and services a company acquires to operate its business. Under the Greenhouse Gas (GHG) Protocol, PG&S falls under Scope 3.1 emissions, which accounts for indirect emissions from suppliers and third-party service providers. Measuring these emissions is critical, as this category often constitutes the majority of a company's carbon footprint. According to the GHG Protocol, Scope 3 emissions (including PG&S) can represent over 90% of a company’s total emissions. Properly tracking PG&S emissions enables businesses to identify carbon-intensive supply chains, set reduction targets, and drive sustainability improvements. (Source: Greenhouse Gas Protocol, 2022).
Source: Corporate Finance Institute 2025
Data Collection Methods
KEY ESG provides multiple ways to categorise your Purchased Goods & Services (PG&S) emissions, depending on the data you have available:
Average-based: Use this method if you know the quantities of goods/services purchased (e.g., kg of batteries, ML of water, or tonnes of IT equipment).
Spend-based: Choose this method when you have financial records of the amount spent on a good or service (e.g., £500 spent on air transport services).
Direct entry: If you have already calculated emissions from a purchased good/service in kgCO2-eq, you can enter this value directly.
Supplier-specific: Use this method if you have an emission factor from your supplier that you can use to calculate emissions from.
Selecting the Right Category
Once you've chosen a calculation method, select the most appropriate category from the dropdown list. Below are common mappings:
Accommodation & Travel → Accommodation services, Travel agency/tour operator services, or Air/Road/Rail Freight.
Professional & Financial Services → Accounting, Legal, Consulting, Insurance Services, Financial Services.
IT & Cloud Computing → Information and Communication Services (e.g., AWS, Microsoft Azure).
Construction & Building Materials → Building Materials, Cement, Lime, Glass, Other Construction Services.
Transportation & Logistics → Land Transport, Air Freight, Rail Freight, Sea Freight, Warehousing.
Office Supplies & Equipment → Office administrative services, Electrical Equipment, Paper Products.
Food, Beverages & Retail → Dairy, Soft Drinks, Preserved Meat, Other Food Products, Retail Trade Services.
Quick Tips for Efficient Mapping
Group similar purchases: If you purchase multiple professional services, map them under "Professional Services and Activities" rather than trying to split them.
Identify core energy-consuming activities: For services like insurance, emissions mainly stem from office energy use, IT, and business travel.
Use existing spend reports: If your company tracks spend per category (e.g., IT, travel, office supplies), use these reports to match spend categories.
Check supplier-specific emissions: Some suppliers provide emissions data per service. If available, this can refine your category selection.
Energy-Consuming Activities Assumed in PG&S Categories
When selecting a category, it is important to consider the embedded energy consumption in the goods and services purchased. Below are key energy-intensive activities associated with different PG&S categories:
Raw material extraction: Mining, logging, and drilling for materials like metals, minerals, and fossil fuels, requiring significant energy to extract and process.
Manufacturing processes: Energy-intensive production methods like smelting, refining, and chemical reactions used to create finished products.
Transportation and logistics: Fuel consumption from trucks, ships, and aeroplanes used to transport raw materials and finished goods.
Packaging production: Energy used to manufacture packaging materials like plastic, cardboard, and paper.
Energy-intensive appliances and electronics: The production of items like refrigerators, air conditioners, and computers, which consume significant energy during manufacturing and operation.
Production of building materials: Cement, concrete, and steel production, which are highly energy-intensive processes.
Energy-Consuming Activities Assumed in Insurance Services
While insurance services do not directly involve energy-intensive manufacturing or raw material extraction, they still contribute to energy consumption through:
Office operations: Energy used in office buildings for lighting, heating, cooling, and IT infrastructure.
IT and data centres: The insurance industry heavily relies on data processing, requiring significant energy for cloud computing, servers, and IT services.
Business travel and commuting: Emissions linked to flights, road transport, and other travel required for meetings, conferences, and sales operations.
Office equipment and supplies: Purchase and use of computers, printers, and other office electronics that consume electricity during use.
Factors to Consider When Assessing Energy Consumption in Purchased Goods
Material type: Different materials have varying energy intensities in their production.
Production methods: The efficiency of manufacturing processes impacts energy consumption.
Distance transported: Longer transportation distances lead to higher energy use.
Product lifespan: Products designed to last longer may have a lower overall energy footprint.
How to Reduce Energy Consumption in Purchased Goods
Choose sustainable materials: Opt for recycled or renewable materials when possible.
Prioritise energy-efficient products: Look for appliances and electronics with high energy efficiency ratings.
Source locally: Buy products manufactured nearby to minimise transportation emissions.
Reduce packaging waste: Choose products with minimal packaging.
Engage with suppliers: Collaborate with suppliers to encourage sustainable practices throughout the supply chain.
Need Help?
If you're unsure how to categorise your PG&S, use the in-platform chat function or email support@keyesg.com to get support from our team.
By selecting the correct category and calculation method, you can ensure accurate reporting of your purchased goods and services within the KEY ESG platform.