In production-driven industries like manufacturing, product-related emissions often account for the majority of an organization’s total carbon footprint. Half of the respondents to the Verdantix supply chain carbon management survey stated that informing initiatives to reduce product carbon emissions was the most significant driver for investments to reduce emissions in the last 12 months. Large firms, such as Adidas, Ikea and Unilever, are setting product decarbonization targets and promoting initiatives to reduce product-related emissions.
Managing product carbon footprints (PCF) plays an important role in understanding a firm’s total carbon impact. However, the process is often hindered by significant challenges. Here are three key obstacles and how organizations can address them:
1. Lack of supplier emissions data.
A substantial portion of a product’s carbon footprint often resides in the supply chain. Gathering data directly from suppliers offers the most accurate calculations. However, many suppliers lack the necessary tools or expertise to provide reliable emissions data. The 2024 Verdantix survey found that insufficient engagement with suppliers and a lack of expertise or people resources within suppliers were the top two challenges to improving supply chain sustainability. This data gap creates uncertainty and undermines the reliability of PCF calculations.
2. Inconsistent methodologies.
There is no single universal standard for PCF calculations. Firms frequently encounter differences in approaches across frameworks such as the GHG Protocol and ISO 14067, PAS 2050 and PACT, making it challenging to ensure comparability and compliance across products.
3. Lack of automation.
Calculating a PCF involves managing large volumes of data, often across multiple lifecycle stages. Firms often receive hundreds of PCF requests from their customers. Without automation, this process becomes resource-intensive and prone to human error, especially for extensive product portfolios.
How software can help
Software solutions can bridge these gaps by easing supplier data collection with engagement tools, providing standardized framework templates for consistent methodologies, and leveraging automation to streamline calculations. These tools enhance accuracy, reduce manual input, and provide actionable insights by performing scenario analysis and evaluating the impact of material and design changes on the PCF. The market for PCF software is expanding, with providers coming from existing segments such as carbon management, EHS and LCA. Stay tuned for a new Verdantix report, coming in 2025, that will benchmark PCF vendors across various capabilities in the market.
