How do Product Carbon Footprints improve the accuracy of Scope 3 reporting?

Many companies are measuring their corporate carbon footprint, but reporting and reducing Scope 3 emissions remains one of their biggest challenges. Complex global value chains often lead companies to rely on secondary data or average databases for their Scope 3 reporting. However, this approach lacks the nuance needed to reflect differences between suppliers, production methods, and interventions the company has implemented to reduce its emissions.

These shortcomings can be addressed with product-level data in the form of a Product Carbon Footprint (PCF). A PCF provides a product-level view of a company's greenhouse gas inventory, offering a more detailed and actionable way to address emissions. By increasing data accuracy, PCFs help companies identify the sources of their emissions and support strategic decision-making related to procurement, product design, and emission reductions. For most companies, the majority of their emissions come from Scope 3, making this level of precision essential for meaningful progress toward climate targets.

Product-level data addresses the Scope 3 problem

To accurately understand Scope 3 emissions, companies need access to supplier-specific emissions data. PCFs offer a structured way to collect and organize this data. While Scope 3 inventories provide a company-wide view of emissions across the value chain, PCFs deliver a more granular perspective at the product level.

Using average databases or secondary data is a useful starting point for identifying the types of emissions in the value chain. However, these datasets may not be updated annually or reflect changes made by the company, such as value chain interventions or procurement from low-emission suppliers. As a result, reliance on averages can introduce inaccuracies and generalizations that fail to represent a company's specific operations.

PCFs serve as building blocks for more accurate Scope 3 inventories. They capture emissions across the entire product life cycle, including raw material production, manufacturing, processing, transport, use, and end-of-life. By aggregating PCFs across their product portfolio, companies can generate emissions data that reflects their actual operations and value chain. Organizing emissions data at the product level highlights which suppliers, materials, and processes contribute most to emissions. This level of precision helps companies clearly map emission sources and identify the most effective areas for action. This provides a reliable basis for tracking and reporting progress toward climate targets.

PCFs as a foundation for strategic decision-making

By improving data accuracy, PCFs allow companies to base decisions on real developments within their value chain, rather than industry averages. They provide visibility into emissions across products, raw materials, and production processes, enabling companies to focus efforts where they will have the highest impact.

PCFs help companies:

• Improve Scope 3 data accuracy: Base reporting on supplier-specific emissions instead of estimates.
• Monitor year-on-year changes: Reflect changes in sourcing or production practices, e.g., emission reductions from value chain interventions.
• Identify emissions hotspots: Get a clear view of high-impact processes in the value chain and prioritize strategic climate action.
• Inform product design and R&D: Optimize materials and production processes to lower emissions.
• Support procurement decisions: Prioritize low-emission suppliers and collaborate with high-impact partners.
• Increase operational efficiency: Identify inefficiencies in manufacturing, energy use, and transport, reducing emissions and costs.

Verification ensures integrity as PCFs move across the value chain

Third-party verification of the PCF calculation model confirms data accuracy and reliability, forming the basis of trust as PCFs are passed to companies downstream in the value chain. Verification in line with recognized standards, such as ISO 14067, also ensures comparability between PCFs from different suppliers.

Verified PCFs give suppliers, customers and investors a clear and credible picture of a product’s emissions profile, supporting informed decision-making and effective decarbonization. Independent, third-party assurance also enables companies to communicate climate progress with confidence – from marketing claims to reporting disclosures.