High Quality PCFs: Why Should You Care?

Not all PCFs are created equal. The difference between a high-quality PCF and a hasty calculation affects your ability to identify product hotspots and meet customer demands. Let's break down what you need to generate high-quality PCFs, why it matters, and how to ensure your calculations stand up to scrutiny.

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The Business Case for High-Quality PCFs

1. Customer Demand

Large companies now demand detailed, accurate product footprints from their suppliers. This year alone, we've observed a sharp uptick in the number of Supplier Engagement Programs demanding PCFs from their suppliers. Quality PCFs enable genuine "apples to apples" comparisons rather than the rough approximations that secondary data provides. Your customers want to make informed procurement decisions.

2. Competitive Advantage

In the real world, these are the competitive advantages we've seen so far:

• Lower carbon relationships: "Choose us over competitors and reduce your value chain footprint".
• Price premiums on sustainable products: Companies are pitching premium pricing for products with verified lower carbon footprints.
• Supply chain security: PCFs are being used to maintain business relationships, while sustainability laggards are increasingly at risk of being dropped.
• Market expansion: Organisations generating accurate, verifiable PCFs are unlocking new market segments and accessing project grant funding.

3. Actionable Insights in Your Own Operations

PCF data reveals hotspots within your products, so you can target reduction strategies.

Five Things You Need to Create a High-Quality PCF

1. Product Structure

You need a comprehensive overview of your products' ingredients (Bill of Materials*). The Bill of Materials defines the ‘Raw Material Acquisition’** lifecycle of your product (all of the emissions that happen before your ingredients and materials enter your operational boundary). Since these emissions often make up the majority of a product's impact, it's important to use either quality, peer-reviewed emissions factors from trusted databases or Product Carbon Footprints from your suppliers, where available.

2. Manufacturing & Processing Locations

You must account for all facilities under your operational control where your product is being processed and manufactured. You need to collect data such as energy use (electricity and heating), water use, waste generation, and direct emissions associated with cooling and other industrial processes. This will define the impact of your product's ‘Manufacturing & Processing’*** lifecycle.

3. Allocation Methodology

Measuring emissions is relatively straightforward when a production process creates just one product. The challenge arises when one process yields multiple products, requiring you to split the emissions between them. Ideally, this problem can be avoided through process subdivision, breaking down manufacturing into steps where each step creates just one output. When this isn't possible, you'll need to split it up based on physical allocation (based on weight, volume) or economic allocation (based on product value).

4. Product Transportation

How does your product move between facilities, and what's the impact of these journeys? You will need information on the vehicle type and fuel type. If using third-party transport, supplier-specific emission factors from the logistics provider can work, but detailed knowledge of transport methods used delivers higher accuracy.

5. Assurance

Third-party auditing validates calculation quality. It does, however, present high implementation costs. Hence, you should prioritise verification and auditing based on your use of the PCF (e.g. PCF is used internally for product R&D and ingredient procurement versus PCF is used to withstand public scrutiny and avoid greenwashing).

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🧐 Glossary

*Bill of Materials: A complete list of all ingredients and components that make up a product.

**Raw Material Acquisition: The process of obtaining materials needed for production, including their environmental impacts (resource extraction, land use, water consumption).

***Manufacturing & Processing: The transformation of raw materials into finished products, including the energy used and emissions generated during production.

PACT Helps You Exchange High-Quality PCFs

But couldn't we all just create PCFs in wildly different ways? Yes, yes, we could. But that wouldn't be that useful. That's where The Partnership for Carbon Transparency (PACT) comes in. PACT, backed by the WBCSD, helps companies exchange comparable PCFs, so we're comparing apples to apples. The PACT standard includes:

• Biogenic emissions;
• Land use and land management emissions. This is particularly important for FLAG (forestry, land use, and agriculture) accounting rules as they're becoming part of the GHG protocol.

PACT also enables accounting for emission removals, via biogenic CO2 uptake (the amount of carbon temporarily stored in land-based products) and land removals (e.g. forest restoration).

Small Reality Check

While high-quality PCFs remain the ultimate goal, data availability can be a serious roadblock. As a first step, focus on collecting good-quality primary data of your own operations, and reduce the percentage of spend-based data and estimations.

For your supply chain, use trusted secondary emissions factors where possible, and work together with your suppliers to increase the coverage of supplier-specific emissions factors.

Altruistiq and PACT

Altruistiq supports and aligns to the PACT standard, enabling data exchange with any other PACT conformant systems that suppliers are using.

👉 Join our upcoming digital event here to find out more about our collaboration with PACT and Unilever to improve the standardised exchange of PCFs across complex value chains.

PCF Quality at Altruistiq

At Altruistiq, we've developed a PCF Rating to rate the quality of the PCFs you get from your suppliers. The rating system is impartial and evaluates multiple factors: lifecycle coverage, primary data percentage, third-party assurance and more.

You can use it to establish quality thresholds for accepting supplier data. Additionally, PCF quality ratings serve as decision-making guardrails. When a PCF achieves a high score, you can confidently use it to drive strategic business decisions. Lower-rated PCFs signal where data refinement might be necessary before making significant operational or investment choices.

Digital Event | The Power of Standardised PCF Exchange

Join industry leaders from Altruistiq, PACT, and Unilever for a digital event revealing how their collaboration is facilitating Product Carbon Footprint (PCF) sharing across complex value chains. Save your seat now.

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