Calculate a PCF following the PACT Methodology

Prioritize which product(s) to focus on based on its potential impact considering the following 3 dimensions:
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• Stakeholders: Focusing on products that meet the reporting needs of key stakeholders, e.g., customers, regulators or investors

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• Capabilities: Focusing on products for which the greatest capabilities already exist, e.g., due to past LCA or in depth understanding of product
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• Strategy: Focusing on products which are strategically the most important, e.g., from a financial, decarbonization, climate related risk or branding perspective

Your chosen calculation standard will determine how you approach the calculation – it should fulfill three criteria

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• Granular: Your chosen calculation standard needs to be on the appropriate level of granularity for a PCF, i.e. the product-level

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• Specific: Your chosen calculation standard ideally is specific to your particular product – this will give you more guidance when conducting the calculation

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• Aligned: Your chosen calculation standard should be aligned with the PACT Methodology, industry expectations and regulatory requirements

The PACT Methodology focuses on the 3 first stages of a product's life-cycle, resulting in Cradle-to-Gate product carbon footprint. Companies will need to understand which activities, components, and processes are associated to each of these stages:

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• Material acquisition and pre-processing: All processes related to procurement of inputs and processing of inputs before they enter production
  

• Production: All activities directly related to transforming the raw inputs into final product (at that step of the supply -chain)

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• Distribution and storage: All processes related to transportation and storage for which the reporting company is responsible for (direct or via 3rd party)

Gathering data is a central process of any PCF calculation. The process involves three steps:

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1. Create a full list of attributable processes and data points linked to them
2. Add data sources and data owners to each data point
3. Make a data collection plan with clear responsibilities and timelines

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Follow these steps while considering the following components:

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Process Maps:

• Understand all attributable processes that need to be included in the calculation
• Understand all underlying data linked to the processes and break down each process into the most strategic granular data point


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Calculation Standard:

• Understand all specific requirements around which processes need to be included an how
• Understand which data sources are permissible under the guidance (e.g. primary vs. secondary)

Once all data has been gathered, the PCF calculation involves three steps:

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1. ‍Multiplying each activity with the relevant emission factor

’
   Activity A x Emission Factor A = Emissions A (CO2e)’

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2. Summing emissions from all processes attributable to the product


   ‘Emissions A(CO2e) + Emissions A(CO2e) + Emissions A(CO2e) = PCF(CO2e)’

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3. Allocating emissions which are split between products

   Allocation should be avoided whenever possible - if it cannot be avoided, the PACT Methodology proposes a clear hierarchy of allocation approaches

Assessing data reliability is a central component of the PACT Methodology. Consistency in monitoring and reporting data reliability is central to allow for full transparency and a gradual journey towards high quality data. The PACT Methodology introduces 2 reliability metrics:

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• Primary Data Share (PDS)
  Percentage of PCF emissions that were calculated using primary activity and emissions data --> Can be used to gradually increase use of primary data
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• Data Quality Ratings (DQR)
  Quantitative score for five data quality indicators based on data quality matrix --> Can be used to monitor and understand data quality hot spots

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Starting 2025 both metrics will be required to be reported along a PCF. Until then companies must choose at least one.

After calculating and verifying your PCF, it is ready to be exchanged through the PACT Network, the PACT's data exchange mechanism, allowing consistency across value chains.

To be able to exchange your PCF through the PACT Network please follow these steps:

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1. Data Attributes: Use the PACT Methodology to which data attributes are required to be exchanged, and which additional ones you may want to exchange along your PCF

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2. Data Model: Use the Technical Specifications to encode the data attributes in the correct format so that it can be understood by all IT solutions linked to the Network
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3. Data Exchange: Send or receive the desired PCF data through the PACT Network 
by using the built-in exchange mechanism

Assurance and verification ensure data integrity and trust through the external validation of PCF results. This process includes 3 steps:

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1. Understanding requirements: Checking roadmap and understanding assurance requirements across all dimensions
   

2. Gathering evidence: Using evidence pack, gather required evidence to be used in assurance process

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3. Conducting assurance: Engaging third-party assurance provider to undergo assurance process per the identified requirements