Understanding Product Carbon Footprints (PCFs): Why Effective Measurement is Key for Your Business

Why PCFs?

To mitigate the worst effects of climate change, companies need to decarbonize urgently – and in order to decarbonize, companies must be able to quantify their emissions accurately. Companies are also under increasing pressure from consumers, investors, and regulators to be transparent about emissions sources and decarbonization progress. This includes emissions in their value chain, also known as Scope 3 emissions. Quantifying Scope 3 emissions is crucial, yet conventional methods are imprecise and cumbersome as they are commonly based on opaque industry averages.

‍Companies wouldn’t buy a product based on the average price of all similar products – yet in emissions reporting, Scope 3 emissions are often calculated as if companies purchased all products this way, with emissions in place of price.  

One important tool your company can use to improve the granularity of its Scope 3 inventory is Product Carbon Footprints (PCFs). The Partnership for Carbon Transparency (PACT) has developed a supplier-specific PCFs approach that directly connects what is happening on the ground in your supply chain to your Scope 3 emissions calculations, unlocking emissions transparency and empowering real emissions reductions.  

What is a PCF?

Product Carbon Footprints, or PCFs, are a measurement of the greenhouse gas emissions created by producing one unit of a product. This number is expressed in kilograms of CO₂ equivalent (kg CO₂e) per unit of product, such as a kilogram of chocolate or a kilowatt-hour of electricity. PCFs can be calculated using varying methods and both secondary data, such as industry averages, and primary data collected directly from a manufacturer’s process. Supplier-specific PCFs calculated using primary activity data – the method promoted by PACT – result in emissions numbers specific to a particular product and time period of production. This is a similar process to a Life Cycle Assessment (LCA), but PCFs focus only on GHG emissions, leaving out other LCA metrics. In many cases, PCF calculations can be derived directly from LCA data for a product, depending on methodology and boundary used.  

For more background on PCFs, see this post: Introducing the essentials of Product Carbon Footprints.

Receiving supplier-specific PCFs for a company’s purchased products unlocks new dimensions of Scope 3 decarbonization and emissions reporting. Alternate methods for calculating Scope 3 emissions are a good start, but the results are not precise or specific to a company’s supply chain choices. Incorporating supplier-specific PCFs makes emissions tracking more accurate, granular, and comparable. This has several important uses:

Operational Advantages

1. Targeted decarbonization efforts: receiving PCFs from suppliers enables companies to pinpoint significant Scope 3 emissions sources and to target decarbonization efforts through supplier engagement. It also allows companies to monitor emissions reductions efforts and celebrate progress year-over-year.

2. Sourcing decisions: procurement teams can use carbon intensity data to select suppliers or find new ones, inform contract negotiations, and partner with suppliers to decarbonize. When calculated according to the same guidelines (such as the PACT Methodology), PCFs enable an apples-to-apples comparison across suppliers and products.  

3. Research & Development: PCFs facilitate the development of new low-carbon products or improving existing ones by clarifying the biggest potential sources of emissions.  

4. Marketing: as consumers and downstream companies continue to call for lower-emissions products, demonstrating low, or lowering, emissions through PCFs can be a competitive advantage.  

5. Reduced supplier effort: As downstream companies seek more information about the sustainability of their supply chains, suppliers begin to experience “questionnaire fatigue” and have lower capacity to respond. Suppliers can instead calculate one PCF and share it with all downstream companies.

Quantification and Reporting

1. Regulations: regulations are increasingly requiring – both directly and indirectly – more transparency in emissions reporting. Supplier-specific PCFs are the answer to this challenge for upstream products, as they give visibility down to the product level. Companies exchanging PCFs will be better prepared to meet regulations as they evolve.  

2. Corporate reporting: Conventional Scope 3 emissions reporting methods such as spend-based accounting introduce uncertainty, expose companies to changes outside of their control, and limit the emissions reduction actions available – all significant risks in public sustainability reports. PACT’s approach to PCFs enables precise tracking and reporting of year-over-year Scope 3 emissions and gives more control to the reporting company.  

PACT and PCFs

At the Partnership for Carbon Transparency (PACT), we believe that PCFs are crucial to accelerating decarbonization in the private sector, and we are committed to supporting companies integrating them into their supply chains. PACT is harmonizing the calculation and exchange of PCFs through its industry-agnostic PCF calculation methodology, tech specs for PCF exchange, and its ecosystem of other ambitious, committed companies.

We guide cohorts of companies through implementation with collaborative workshops and are constantly offering new resources to assist with the PCF transition process.

Join us to begin your company’s PCF journey.  For additional information, please contact us.