With climate change becoming an increasingly urgent issue, more and more companies are starting to take responsibility for their products' carbon footprints. Understanding the emissions of the full lifecycle of a product provides crucial data to help companies reduce their climate impacts.
A product carbon footprint (PCF) is a measurement of the total greenhouse gas (GHG) emissions caused by a product during its lifetime. This includes emissions from raw material extraction, manufacturing, transportation, storage, sale, use and end-of-life disposal.
Measuring a product's carbon footprint sheds light on emissions hotspots that may have been previously hidden across complex globalised supply chains. With full visibility into emissions, strategic reductions can be made. Armed with a PCF, companies can take steps to reduce emissions through product re-design, materials substitution, manufacturing process improvements, logistics optimisations, and more.
In addition to calculating emissions at the product level, companies need to measure and manage emissions at the organisational level. Mapping product carbon footprints alongside an overall corporate carbon footprint provides complementary views of a company's climate impact.
By understanding both product-level and company-wide emissions, businesses can identify emissions hotspots across the lifecycle of their products and operations. This enables more targeted reduction strategies and investments into decarbonisation projects with the highest impact.
The growing importance of measuring PCFs
As climate change continues to accelerate, there has been an increasing focus on understanding and reducing the carbon footprints of products by businesses, consumers and regulators. Some key factors are driving the growing importance of measuring PCFs:
Regulatory requirements: Governments globally are introducing legislation to mandate climate-related financial disclosures for companies, such as measuring and reporting on product emissions. Understanding PCFs allows businesses to prepare for compliance. For example, the EU is implementing Carbon Border Adjustment Mechanisms (CBAM) that will tax imports based on their embedded carbon.
Increasing consumer demand for sustainable products: Consumers are becoming more aware of the environmental impact of their purchases. Many now actively seek out low carbon footprint products and brands that can demonstrate their sustainability credentials. By measuring PCFs, companies can identify carbon hotspots in products, reduce emissions, and market their green credentials.
Investor pressure: Shareholders are demanding increased transparency into product emissions as part of environmental, social and governance (ESG) reporting. Recently, PwC reported that 70% of investors agree that companies should embed ESG directly into their corporate strategy. Mapping PCFs allows companies to satisfy investor demands for emissions data at the product level.
How to calculate the footprint of a product
Calculating a product's carbon footprint involves following the key steps of a lifecycle assessment (LCA). An LCA quantifies the total GHG emissions, as well as other environmental factors, caused directly and indirectly by a product throughout its lifecycle, from raw material extraction to end-of-life disposal.
The stages of a product LCA include:
Goal definition: Clearly identify the purpose, scope and boundary of the assessment. What product(s) will be assessed and which parts of the lifecycle will be included? Cradle-to-gate assessments cover emissions from raw material extraction to the factory gate before transport to customers. Cradle-to-grave analyses extend to the end-of-life and disposal of products.
Inventory analysis: Develop a process map documenting the various inputs and outputs throughout the lifecycle stages. Primary data like energy use and waste generation should be collected directly from a company's operations and suppliers. Secondary data on upstream/downstream processes can be obtained from public sources like commercial LCA databases.
Impact assessment: Evaluate the inputs inventoried and translate them into GHG emission estimates by applying appropriate emission factors. For example, 1 kWh of coal electricity generation may equate to 0.34 kg CO2e based on published emission factors.
Interpretation: Summarise the results and identify hotspots to focus reduction efforts. Uncertainty and data quality checks should also be performed.
The complexity of product carbon footprinting depends significantly on the scope, transparency of suppliers, availability of primary vs. secondary data, and sophistication of impact assessment methods used.
Challenges in calculating PCFs
Calculating accurate product carbon footprints can be challenging for several reasons:
Data collection and accuracy: Collecting accurate and complete data across complex global supply chains is difficult. Companies may not have visibility into all inputs and processes associated with materials and parts procurement. Important data may be missing or unreliable. Assumptions must often be made to fill in data gaps, reducing accuracy.
Complexity: Supply chains and product compositions are complex. A single product may contain thousands of parts sourced globally through multi-tier supply chains. Modelling cradle-to-gate emissions across these intricate supply webs is an arduous task requiring careful tracing of materials and processes.
Constantly changing inputs: Many variables that influence GHG emissions fluctuate over time, such as energy sources, transportation modes, and production efficiencies. This introduces uncertainty and requires regular PCF updates. As products evolve through design changes, the associated emissions profile changes as well. PCFs must be re-calculated to remain current.
Technology solutions for PCF management
Measuring product carbon footprints can be a complex and labour-intensive process, especially for companies with large and diverse product portfolios. Fortunately, technology solutions are emerging to help companies streamline and automate various aspects of PCF management.
Software platforms designed specifically for carbon accounting can integrate with product lifecycle data from multiple enterprise systems. This provides a centralised database for analysing product-level emissions across the value chain. As carbon reporting becomes mandated through regulatory disclosure requirements, advanced software systems can ensure consistency, accuracy and auditability.
Dashboard reporting enables visibility into carbon hotspots by product, category or entity. Automated data collection and carbon calculations significantly reduces the manual effort compared to traditional spreadsheet-based approaches. This allows companies to quickly generate rough PCF calculations to identify priorities for more detailed assessments.
Integration with enterprise resource planning, product lifecycle management, and supply chain systems provides a digital thread connecting product design data with operational impacts. This enables rapid scenario modelling to identify optimal pathways for reducing PCFs year over year and help inform sustainable design decision-making.
Overall, technology is critical for scaling product carbon management across product-led organisations. Automated solutions amplify internal resources for measuring and optimising the emissions of thousands of product variations. This ultimately provides the data needed to set actionable carbon reduction targets and track progress over time.
The future of product carbon footprinting
As pressure mounts for companies to reduce their environmental footprint, product carbon footprinting is becoming an increasingly essential practice. Companies have a responsibility to understand the full lifecycle impact of their products to identify areas for improvement. While calculating product footprints currently poses challenges, the field is rapidly evolving.
Emerging best practices involve taking a cradle-to-grave approach in assessing emissions across the entire product lifecycle. This provides a more comprehensive view compared to a simple gate-to-gate analysis. Lifecycle stages like raw material extraction, production, distribution, use phase and end-of-life disposal all contribute to the product's footprint. As methodologies mature, companies can expect more accurate and consistent product carbon calculations.
Several technology trends will shape the future of product footprinting. Increased automation through carbon management software reduces the workload in collecting emissions data and choosing the most relevant emission factors. They will continue to help streamline the process of identifying hotspots and modelling reduction scenarios, saving resources and time when it comes to decarbonising production lines.
Overall, the field is moving towards greater standardisation of methods and reporting formats. This will increase comparability across companies and products. With better data and technology, product carbon footprinting will evolve into an indispensable tool for companies pursing net zero emissions across their portfolio. Transparent communication of product footprints to stakeholders will also become a sustainability priority.
Reach out to our expert team if you would like to know more about how we can help you streamline your Product Carbon Footprints (PCFs).