Input output models: a clear guide to scope 3 emissions
Input-output models offer a top-down view of how an entire economy works. They map how money flows between industries, showing which sectors buy from and sell to one another. This wide-angle perspective is essential for understanding the hidden environmental impact behind everyday business activities.
What input-output models really do
The easiest way to think about an input-output (IO) model is to picture the economy not as millions of businesses, but as one interconnected system. Each industry depends on others for materials, energy, and services. An IO model captures these links and quantifies them, showing exactly how much one sector relies on another to produce a given amount of output.
This structure lets us follow economic ripple effects. A single purchase — for example, a new fleet of vehicles — passes value not only to the manufacturer, but to steel producers, software companies, logistics firms, and countless smaller suppliers. IO models reveal this entire chain rather than just the visible tip.
A long-standing foundation for today’s environmental analysis
The strength of modern IO models comes from their history. The concept dates back to the 19th century, when economists began tracing how industries depended on each other. The method matured in the mid-20th century, when governments rebuilding after the Second World War needed reliable ways to plan industrial growth. National statistics bodies began collecting consistent data on inter-industry transactions, turning IO models into a trusted policy tool.
That same foundation now supports environmental accounting. By pairing official economic tables with environmental datasets, IO models evolve into Environmentally-Extended Input-Output (EEIO) models. These allow organisations to quantify the carbon embedded in every pound they spend.
How IO models calculate scope 3 emissions
Once environmental data is added, IO models become a powerful engine for estimating indirect emissions. For businesses, this is especially valuable for Scope 3 — the emissions created outside a company’s direct control but required for mandatory reporting in many jurisdictions.
The process is straightforward. First, spending data is gathered: what was bought and how much was paid. Each purchase is then mapped to an industry sector in the national economic tables. Finally, an emissions factor is applied for that sector, converting spending into an estimate of the upstream carbon footprint. This method captures the full chain of impacts, from raw material extraction to energy use in production.
Why IO models matter for private aviation
For private jet operators, the IO method provides something corporate clients urgently need: upstream emissions for business travel. Under regulations such as the CSRD, companies must report the full footprint of their travel, not just the fuel burned during the flight.
IO-based calculations can include the emissions from refining jet fuel, manufacturing aircraft components, powering maintenance facilities, and producing catering services. This completeness transforms a complex accounting problem into a clear, consistent dataset that clients can use directly in their disclosures.
Strengths and limitations of the method
The main strength of IO models is their completeness. They ensure no major upstream emission source is missed, making them ideal for complex supply chains. They also prevent double counting by relying on a consistent national accounting framework.
There are, however, limitations. IO models work with industry averages, which means they can’t reflect the exact efficiency of individual suppliers. National tables may also lag a few years behind current economic conditions. Even so, they provide a trusted baseline fully recognised by the GHG Protocol and widely used when precise supplier data is unavailable.
Turning IO modelling into a reporting service
Operators can translate IO analysis into a practical emissions reporting service by following a clear sequence:
– Gather complete spending data from fuel, maintenance, catering, and other operational needs.
– Map these expenses to the correct industry sectors.
– Apply EEIO emissions factors.
– Present the results in a transparent report clients can integrate into their Scope 3 disclosures.
This approach elevates the operator’s role from service provider to reliable data partner, supporting clients as they navigate increasingly complex reporting requirements.
