Measure & Verify

Scope 3 data, by its very nature, sits outside company boundaries and is notoriously difficult to access. Companies wishing to provide a more comprehensive picture of their Scope 3 emissions have sought to overcome the lack of primary data with a reliance on secondary databases. Although useful to have an initial understanding of your Scope 3 emissions, the average or typical data these databases provide are not necessarily adjusted on an annual basis and do not reflect individual efforts made by companies to reduce their emissions. To address this, companies seeking to better understand and track the performance of their Scope 3 emission hotspots must have access to supplier- and customer-specific data in the form of product carbon footprints (PCFs). 

To obtain high quality and reliable data at the product level, PACT (the Partnership for Carbon Transparency powered by WBCSD), has developed a standard called the Pathfinder Framework. This framework builds upon the Greenhouse Gas Protocol to ensure accounting consistency and comparability.  

In summary, this framework recommends that companies calculate and exchange the cradle-to-gate Product Carbon Footprints (PCF) (explained under step 2 below), prioritizing high quality and primary data to enable informed decision-making of Scope 3 emissions by following 5 steps illustrated in Figure 1: 

Figure 1: How to use product-level accounting to enable effective decision-making of scope 3 emissions 

Source: Pathfinder Framework: Guidance for the Accounting and Exchange of Product Life Cycle Emissions

To effectively calculate and exchange cradle-to-gate PCFs to better understand and manage emissions, companies should follow these 8 steps:  

1. Select the most material products and suppliers 

As calculating PCFs can seem daunting at first, PACT recommends starting this exercise by focusing on the most material or strategic purchased products and suppliers. Since the ultimate aim is to better inform targeted value chain decarbonization, companies should prioritize products and suppliers with the highest emissions intensity, where data accuracy matters most. Collaborating with these suppliers is key to sharing knowledge and ensuring the consistent calculation and exchange of product emissions data.   To help you get started with the prioritization of products to calculate PCFs for, you may wish to consider:  

• Stakeholder requirements: focus on products that meet the reporting needs of key stakeholders, e.g. customers, regulators, or investors  

• Supplier capabilities: focus on products from suppliers with the greatest carbon accounting expertise e.g. suppliers with existing LCA analysis completed in the past 

• Strategic relevance: focus on products which are strategically the most important, e.g. from a financial, decarbonization or branding perspective. 

 2. Choose the relevant standards  

If you have been asked by one of your customers to calculate a PCF, the first step you need to take is selecting the most relevant standard to calculate your PCFs. A standard details the exact boundaries, calculation steps, data requirements, data quality considerations to calculate your PCF. Standards enable consistency and comparability of PCFs. Companies should choose standards based on three principles:  

• Granularity: the standard should be the appropriate level of granularity for a PCF, at the product-level  

• Specificity: the standard should be specific to your particular product; this will give you more guidance when calculating 

• Alignment: the standard should be aligned with the Pathfinder Framework, industry expectations, and regulatory requirements.  

As illustrated in Figure 2 below, many different types of standards exist. To help companies navigate this, the Pathfinder Framework introduced a hierarchy detailing which standards should be prioritized under which circumstances. Based on the above principles, product specific standards should always be prioritized for the cradle-to-gate PCF calculation, as they provide the most detailed guidance in relation to a specific product and hence can contribute to increasing the accuracy and consistency of data exchanged across value chains. 

Figure 2: Prioritization of standards  

Source: Pathfinder Framework: Guidance for the Accounting and Exchange of Product Life Cycle Emissions

3. Understand and map out what data you need  

Once the standard has been selected, companies need to understand and map out all the processes and activities that contribute to the upstream and operational emissions associated to the studied product. To calculate the cradle-to-gate PCFs of the selected products, this includes:  

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

• Production: all activities related to transforming the raw inputs into final product  

• Distribution and storage: all processes related to the transportation and storage manage directly by the reporting company 

Figure 3: Lifecycle stages and boundaries for Product Carbon Footprints (PCFs)

Source: Pathfinder Framework: Guidance for the Accounting and Exchange of Product Life Cycle Emissions

4. Collect activity and emissions data from all activities in your PCFs 

After selecting the relevant standards (step 2) and mapping out all the activities (step 3), companies should gather activity and emissions data for all the activities associated with your selected PCFs by:  

• Creating a full list of attributable processes and requirements that need to be included in the PCF calculation. To this, companies need to a) identify the underlying data linked to the processes and break down each process into the most granular data point b) all specific requirements around which processes need to be included and how and c) data sources and quality requirements for the data d) data sources and data owner to each data point 

• Making a data collection plan to effectively collect the data. To do this, companies should consider a) the data should represent the average of a period (e.g. 1-3 years) b) different data items are likely to have different timelines and c) data items have different data owners, so it is recommended to empower specific data owners amongst the data, to divide responsibilities and reduce need for back and forth.  

Companies should prioritize collecting primary emissions data from their suppliers where possible to later enable targeted decarbonization solutions. When primary data is not available, companies should collect suitable secondary data sets and proxy data to fill in any potential gaps and establish plans to obtain primary data over time. Companies are not expected to have PCFs calculated entirely using primary data from the start, what is important is to start gathering the most material data and gradually increase over time the share of primary data used. 

5. Calculate your PCFs  

Once all the data has been gathered, the PCF calculation involves three simple steps as described in figure 4 and exemplified in figure 5 below. 

Figure 4: How to Calculate a PCF 

Figure 5: Example calculation of a PCF 

6. Assess data quality and reliability of your PCFs 

Once PCFs are calculated, companies should analyze the overall data quality and reliability of the PCFs to monitor and improve these over time. To assess data quality and reliability, companies should calculate:  

• Primary data share, the extent (percentage) of primary data used to calculate the PCF 

• Data quality ratings, which reflect the underlying data quality of the elements used to calculate the PCF (Figure 6 below).  

These metrics can be used to assess how reliable a PCF result will be, creating a basis for decision-making. The Pathfinder framework requires that at least one of the two metrics is reported along a PCF until 2025, then both metrics afterwards. These metrics may evolve over time to ease the reporting burden for companies and facilitate comparability.  

Figure 6: Streamlined version of GHG Protocol data quality assessment matrix

7. Verify and ensure data integrity of your PCFs 

After assessing the data quality and reliability of your PCFs, companies should obtain external assurance and validation of PCF results to ensure data integrity. This increases reliability and trust in the PCF data, which in turn enables better decision-making to target decarbonization when the PCFs are exchanged across the value chain. For more information, refer to Chapter 5 of the Pathfinder Framework. 

8. Exchange data of your PCFs across the value chain and unlock decarbonization opportunities  

The last step is to exchange your PCFs with your customers. At present, suppliers are often asked to complete custom questionnaires to provide data. With increasingly more data requests, this approach is reaching its limitations as suppliers face “survey-fatigue”. PACT has sought to overcome this by enabling technology solutions to step up to play a major role in improving data sharing along the value chain through a secure peer-to-peer exchange of accurate, primary, and verified product emissions data using the PACT Network’s API. Given the global and intricate nature of value chains, flexibility to choose how to access and share data via technological interoperability will be key, which is why the PACT Network enables PCF data exchange in a standardized and interoperable format across technology platforms. 

Please refer to the Pathfinder Network and the Technical Specifications for PCF Data Exchange for more information on how to exchange your PCF through the Pathfinder Network​.  

Once the PCFs are received, companies can leverage these high-quality PCFs to:  

• Improve management and monitoring of data quality, corporate GHG accounting, sustainability targets, supplier performance, climate risk 

• Inform strategic decisions on product portfolios, innovation, R&D and product design, decarbonization strategy, supply-chain strategy, marketing strategy 

• Target engagement with key stakeholders such as suppliers, customers, compliance, industry, investors, regulators, and policy and advocacy