Approach to spend-based emissions – debits or net?

Emission factor databases
1

Hi everyone,

For spend-based emission calculations, which accounting data do you use as your basis?
We’re curious to hear how others approach this!

  • Only debits (expenses)
  • Net: debits minus credits (e.g. income or refunds)

We’re particularly interested because it’s sometimes unclear how to treat credits—whether they reflect actual income, refunds, or something else.

Thanks in advance for sharing your insights!

Kind regards,
Jelte Liekens

2

I would work with net (debits minus credits) because that gives you the actual spend for a certain product or service. That being said, if there is a big credit for a certain supplier/product/service, I would recommend to check with the finance department how come.

3

Thanks, Kenneth.

What about the fact that there are too many lines to go over manually and the level of detail is limited?

Would you still go for net, or would you opt for worst-case debit?

4

I’m just doing a spend-based analysis and I go through every line of the company’s general ledger (which is quite a lot but I have a tool that maps against the UK Gov emissions factors) and include both debits and credits. I ask for transaction level breakdowns for the most significant GL codes. The ledger I’m working on currently is about 3000 lines but most companies buy lots of the same thing and, once you get used to the SIC codes, it’s not so bad!).

So working with debits and credits is good insomuch as it means you don’t have to manipulate the raw data from your client. You also end up effectively working with net because credits reduce the debits. However, I’ve found that credits sometimes don’t have as clear a description as debits so you have to go back to the client to ask them for some detail. If you wanted to work with net, you’d likely have to do this anyway, unless you can persuade your client to give you good net data in the first place.

Hope that helps!