Product Carbon Footprint

The PCF is key to integrate carbon management with business steering

Why the Product Carbon Footprint matters

With investor's and consumer's increasing interest in the climate impact of companies and products, carbon accounting is gaining in importance. Whether per regulatory requirement or intrinsically motivated, companies typically report on the carbon footprint of their operations comprising direct emissions (scope 1), indirect emissions (scope 2) as well as upstream and downstream emissions (scope 3). The resulting corporate carbon footprint (CCF) is well suited for communication purposes and to define and track corporate emission reduction goals. However, it comes with one major drawback:

The corporate carbon footprint doesn't allow market forces to be effective for carbon reduction.

The corporate carbon footprint doesn't enable climate-conscious purchase decisions.

For consumers - B2C and B2B alike - the value of knowing the carbon footprint of the supplying company is very limited. The carbon footprint of the purchased product matters.

 

The corporate carbon footprint doesn't support the 'polluter pays' principle.

Once carbon emission costs are internalized (discussions on carbon tax, certificates etc. ongoing) companies will utlimately need to rethink their operating model and reshape their product portfolio - strategic decisions which require full transparency on the product carbon footprint (PCF).

That said, it becomes evident that the product carbon footprint is the most relevant indicator for business steering if we intent to leverage the immense power of our economic system to adress the climate crisis. It is an enabler to integrate sustainability with economic objectives.

The product carbon footprint is an enabler to integrate sustainability goals with economic objectives.

Especially for upstream material manufacturers, knowing the carbon footprint of products is crucial for business-driven carbon management. It is a prerequisite for five crucial activities.

1

Gratify information needs of climate conscious customers and consumers

2

Reshape the business model and product portfolio towards sustainability

3

Make climate-aware technology and innovation decisions

4

Foster a sustainability-centric brand and product positioning

5

Commercialize carbon reduction to refinance needed investments

This holds true for the chemical industry, which contributes 5.8% of global carbon emissions [1]. With the fact in mind that the chemical industry is the starting point of almost any value chain of any consumable, our capability to calculate PCFs at scale enables more accurate carbon accounting for downstream industries, the carbon footprint to become a core product attribute and thus market forces to drive carbon reduction.

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Chart adapted from Hannah Ritchie (2020) [2]