Activity-based method: Definition

The activity-based method calculates emissions from physical quantities: litres of diesel, kilowatt-hours of electricity, tonnes of steel or kilometres travelled. Each quantity is multiplied by an emission factor for that specific activity.

Emissions = activity quantity × emission factor

For example, 10,000 litres of diesel multiplied by the diesel emission factor in the Australian National Greenhouse Accounts (NGA) Factors gives your Scope 1 emissions from that fuel.

Activity-based vs spend-based

The spend-based method multiplies dollars spent by an average emissions-per-dollar factor. It is fast and covers everything in your ledger, but it can’t tell a steel chair from a wooden one. The activity-based method reflects what you actually used, so it is more accurate and, importantly, it shows reductions: switching suppliers or cutting fuel use changes the number, whereas spend-based figures move mainly with price.

When to use it

• Scope 1 and 2: almost always activity-based, from fuel records and energy bills.
• Scope 3: start spend-based to find hotspots, then move the biggest categories to activity data (a hybrid approach).

For AASB S2, auditors look for the source of each activity figure, so keep invoices, meter data or supplier statements linked to the number. In NetNada, uploaded bills and invoices are converted to activity data with the matching factor and the source document attached.