Spend-based carbon accounting estimates emissions by multiplying money spent by an average factor for that category of purchase. Activity-based accounting calculates emissions from the actual product or service behind the purchase, using data specific to that item. Both are allowed under the GHG Protocol. Only one ties the number to what you actually bought.
Take 50 industrial sensors bought for 45,000 EUR on one invoice. Run it through both methods and you get two very different answers.
Same purchase. Same invoice. Three times the reported footprint, decided only by which method did the math.
Spend-based estimation is fast because every company already has invoices and ledger entries. But it multiplies money, not carbon, which creates three problems:
Price and emissions are not the same thing. A more expensive but cleaner product can score worse than a cheap, dirty one.
Inflation looks like decarbonization. If a price rises 15 percent while production is unchanged, reported emissions rise 15 percent too.
Nothing is traceable. A category average applied to a spend total cannot point back to a supplier, product, or decision.
Because these factors are built to be conservative, they routinely overstate. Companies switching to activity-based data typically see reported emissions fall 30 to 40 percent, sometimes to a quarter of the old figure.
It matches each invoice line to real activity data, in order of preference: a supplier's published product LCA or EPD first, a constructed LCA built from materials, weight, and manufacturing location where none exists, and a spend-based factor only as a last resort (in practice under 10 percent of lines). The footprint then moves for the right reasons: a lower-carbon supplier lowers the number, and paying more for the same product does not. Every figure traces back to an invoice line, a factor, and a source.
Under CSRD and ESRS E1, Scope 3 emissions must withstand external assurance, which requires a documented path from source data to reported number. A category-level average cannot provide that, which quietly rules spend-based out as a durable method for material categories, even though the GHG Protocol still permits it.
Bardo builds activity-based Scope 3 inventories from your existing invoices, every figure traceable to the source document. It is the method behind the reported footprints of companies like Stegra, Tele2, and First Camp.
Spend-based and activity-based carbon accounting are not two flavors of the same calculation. They're two different claims about what a number means.
SPEND-BASED SAYS: "This is roughly what companies like you tend to emit for this kind of spend."
ACTIVITY-BASED SAYS: "This is what this specific purchase actually cost the climate."
Only one of those claims survives an audit, a supplier switch, or a board asking why the numbers moved.