Capital Goods encompass all assets a company buys for its operations, such as machinery, buildings, vehicles, and equipment. These assets can have a significant impact on a company's carbon footprint, especially for those in sectors with high capital expenditure like manufacturing, construction, and logistics.
💡How to Tell if a purchase belongs to Purchased Good & Service or a Capital Good
Figuring out if something you bought for your business is a Purchased Good and Service or a Capital Good is all about how you use it and how long it lasts:
Purchased Goods and Services are things you buy that you use up within a year, like paper for the printer, monthly payments for internet, or what you pay for someone to clean the office.
Capital Goods are treated as assets and are significant investments that normally help your business for more than a reporting year. This includes machines for manufacturing products, company vehicles, or owned real estate. These expenditures are generally financially accounted for as CAPEX.
Where to Find the Data?
Collecting data on capital goods involves several key sources:
Accounting and/or ERP Systems: Companies typically store procurement information on their financial accounting and/or ERP systems.
Purchase Records: Detailed records of capital goods purchases, including invoices and contracts, often provide the necessary information on the type, quantity, and cost of assets acquired.
Asset Registers: Companies typically maintain asset registers that list all capital goods owned. Check which new assets were registered in the reporting period.
Data format template
Currently, you can only account for Capital Goods emissions using the spend-based method More on the spend-based calculation method you can read in this article [link].
For each capital good the following information is needed:
Currency
Price. To ensure the most accurate calculations, input the base price without tax, markup, and transport costs. If this data is unavailable, enter the purchase price instead.
💡 Do I need to use amortization?
No, instead include only the assets the company bought within the reporting period and account for the full price of each asset.
Supplier Name (Optional).
Description (Optional). This aids in categorizing and understanding the nature of each purchase.
Emission Factor (Optional)