Proxy Emissions Factors

Proxy Emissions Factors (Proxies) are a way of relating the carbon emissions of an activity (or group of activities) to the amount spent on those activities. Those activities typically fall into Scope 3 and are often related to the supply chain over which an organisation has little, if any, control.

The Office for National Statistics produces a file of Standard Industrial Classification (SIC) Codes. They are used in classifying business establishments and other statistical units by the type of economic activity in which they are engaged. SIC Codes are broken down in to 21 Sections, 88 Divisions, 272 Groups, 615 Classes with 191 Subclasses.

Until 2011, the Department for Rural Affairs (Defra) produced yearly emissions factors relating CO₂ to amount (in £) spent. They grouped the SIC Codes into 106 categories corresponding to the 88 Divisions with some Divisions being further broken down. This data is still available but Defra advise that the factors be discounted to allow for changes in the value of the pound and improvements in efficiency over the years.

Every year we re-calculate our proxy emissions factors based on the most current CPI data from the Office of National Statistics (ONS). This does mean that older factors may change, so re-calculating previous results may lead to different results.

Our methodology:

• Calculate year on year percentage change to the Defra factors from 2007 to 2011.
  
• From each resulting percentage remove that year’s inflation percentage (CPI data). This leaves what could be described as the “change due to efficiency”.
  
• Take the average of the efficiency percentage change from 2007–11 – this gives a trend of percentage change over time.
  
• This trend of percentage change, along with CPI data from 2012 onwards is then used to calculate new factors for 2012 to the current year.

The proxy factors used (as identified by their SIC Code) are:

Code	SIC Code Category	360°carbon Expenditure Category
17	Paper and paper products	Stationery
18	Printing and recording services	Professional Printing
26	Computer, electronic and optical products	IT equipment and electronics
31	Furniture	Furniture
53	Postal and courier services	Postage
55	Accommodation services	Hotels and similar accommodation
56	Food and beverage serving services	Paid event catering
58	Publishing services	Magazines and books
61	Telecommunications services	Telephone and internet services
63	Information services	Web hosting
65.1-3	Insurance, reinsurance and pension funding services	Insurance
69.1	Legal services	Legal services
69.2	Accounting, bookkeeping and auditing services	Accountancy and auditing
74	Other professional, scientific and technical services	Other professional services
77	Rental and leasing services	Rentals and leasing
81	Services to buildings and landscape	Building and grounds
85	Education services	Courses and training

Where possible it is always preferable to use direct data (for example, kWh of electricity used) in conjunction with a BEIS emissions factor. But since that data isn’t always available a proxy serves as the “next best thing”.

Proxies, in effect, show the carbon intensity of an organisation’s activities and are a way of estimating the emissions from complex areas that can’t easily be broken down into their constituent parts. Proxies are a useful indicator of an organisation’s carbon footprint but do have limitations since they are based on highly aggregated data from a range of sectors and sources.

Because there are a limited number of codes, but a huge range of activities with a carbon footprint the closest SIC Code-based category must be identified. There is always the possibility that an activity could fit into a number of SIC Code categories depending on how it is defined. In those instances, we have chosen the smallest proxy so as not to unduly over-estimate an organisation’s carbon footprint.

We review our proxy emissions factors annually (in line with the publication of the new BEIS factors). Because the government updates CPI data over time, we recalculate all of the proxy emissions factors. If you want to update previous footprints, simply edit the footprint, re-calculate the Expenditure section and save the results.