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![Table of Contents
CHAPTeRS
guidance 1. Introduction 02
guidance 2. Defining Business Goals 08
requirements guidance 3. Summary of Steps and Requirements 12
requirements guidance 4. Principles of Product Life Cycle GHG Accounting and Reporting 18
requirements guidance 5. Fundamentals of Product Life Cycle GHG Accounting 20
requirements guidance 6. establishing the Scope of a Product Inventory 26
requirements guidance 7. Boundary Setting 32
requirements guidance 8. Collecting Data and Assessing Data Quality 46
requirements guidance 9. Allocation 60
requirements guidance 10. Assessing Uncertainty 78
requirements guidance 11. Calculating Inventory Results 84
requirements guidance 12. Assurance 92
requirements guidance 13. Reporting 100
requirements guidance 14. Setting Reduction Targets and Tracking Inventory Changes 108
APPenDICeS
A. Guidance on Product Comparison 115
B. Land-Use Change Impacts 117
C. Data Management Plan 126
Abbreviations 132
Glossary 133
References 139
Recognitions 140
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E
missions of the anthropogenic greenhouse gases (GHG) that drive climate change
and its impacts around the world are growing. According to climate scientists,
global carbon dioxide emissions must be cut by as much as 85 percent below
2000 levels by 2050 to limit global mean temperature increase to 2 degrees Celsius
above pre-industrial levels.1 Temperature rise above this level will produce increasingly
unpredictable and dangerous impacts for people and ecosystems. As a result, the need
to accelerate efforts to reduce anthropogenic GHG emissions is increasingly urgent.
Existing government policies will not sufficiently solve the problem. Leadership and
innovation from business is vital to making progress.
Corporate action in this arena also makes good business an understanding. It allows companies to take into
sense. By addressing GHG emissions, companies can account their emissions-related risks and opportunities
identify opportunities to bolster their bottom line, and focus company efforts on their greatest GHG
reduce risk, and discover competitive advantages. As impacts. Until recently, companies have focused their
impacts from climate change become more frequent and attention on emissions from their own operations. But
prominent, governments are expected to set new policies increasingly companies understand the need to also
and provide additional market-based incentives to drive account for GHG emissions along their value chains and
significant reductions in emissions. These new policy and product portfolios to comprehensively manage GHG-
market drivers will direct economic growth on a low- related risks and opportunities.
carbon trajectory. Businesses need to start planning for
Through the development of the GHG Protocol Product
this transition now as they make decisions that will lock in
Standard, the GHG Protocol has responded to the
their investments for years to come.
demand for an internationally accepted method to
An effective corporate climate change strategy requires enable GHG management of companies’ goods and
a detailed understanding of a company’s GHG impact. services. Following the release of this standard, the
A corporate GHG inventory is the tool to provide such GHG Protocol and its partners will proactively work
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with industry groups and governments to promote its The GHG Protocol has produced the following separate,
widespread use – along with the entire suite of GHG but complementary standards, protocols, and guidelines:
Protocol standards and tools – to enable more effective
• GHG Protocol Corporate Accounting and Reporting
GHG management worldwide.
Standard (2004): A standardized methodology for
companies to quantify and report their corporate GHG
emissions. Also referred to as the Corporate Standard.
1.1 The Greenhouse Gas Protocol
• GHG Protocol Corporate Value Chain (Scope 3)
The Greenhouse Gas (GHG) Protocol is a multistakeholder
Accounting and Reporting Standard (2011):
partnership of businesses, non-governmental
A standardized methodology for companies to quantify
organizations (NGOs), governments, and others convened
and report their corporate value chain (scope 3) GHG
by the World Resources Institute (WRI) and the World
emissions, to be used in conjunction with the Corporate
Business Council for Sustainable Development (WBCSD).
Standard. Also referred to as the Scope 3 Standard.
Launched in 1998, the mission of the GHG Protocol is
• GHG Protocol for Project Accounting (2005):
to develop internationally accepted greenhouse gas
A guide for quantifying reductions from GHG-mitigation
(GHG) accounting and reporting standards and tools,
projects. Also referred to as the Project Protocol.
and to promote their adoption in order to achieve a low
• GHG Protocol for the U.S. Public Sector (2010):
emissions economy worldwide.
A step-by-step approach to measuring and reporting
The GHG Protocol follows a broad, inclusive, consensus- emissions from public sector organizations,
based multi-stakeholder process to develop these complementary to the Corporate Standard.
standards with balanced participation from businesses, • GHG Protocol Guidelines for Quantifying GHG
government agencies, non-governmental organizations, Reductions from Grid-Connected electricity Projects
and academic institutions from around the world. The (2007): A guide for quantifying reductions in emissions
standards include detailed guidance to assist users with that either generate or reduce the consumption of
implementation and are freely available on the GHG electricity transmitted over power grids, to be used in
Protocol website (www.ghgprotocol.org). conjunction with the Project Protocol.
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![CHAPTeR 01 Introduction
• GHG Protocol Land Use, Land-Use Change, and address avoided emissions or actions taken to mitigate
Forestry Guidance for GHG Project Accounting released emissions. This standard is also not designed to
(2006): A guide to quantify and report reductions from be used for quantifying GHG reductions from offsets or
land use, land-use change, and forestry, to be used in claims of carbon neutrality.
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conjunction with the Project Protocol.
Ultimately, this is more than a technical accounting
• Measuring to Manage: A Guide to Designing GHG
standard. It is intended to be tailored to business realities
Accounting and Reporting Programs (2007): A
and to serve multiple business objectives. Companies may
guide for program developers on designing and
find most value in implementing the standard using a
implementing effective GHG programs based on
phased approach, with a focus on improving the quality of
accepted standards and methodologies.
the GHG inventory over time.
1.2 Purpose of the GHG Protocol
1.3 How this standard was developed
Product Life Cycle Accounting and
In 2008, WRI and WBCSD launched the three-year process
Reporting Standard
to develop the Product Standard. A 25 member Steering
The GHG Protocol Product Life Cycle Accounting and
Committee of experts provided strategic direction
Reporting Standard (referred to as the Product Standard)
throughout the process. The first draft of the Product
provides requirements and guidance for companies and
Standard was developed in 2009 by Technical Working
other organizations to quantify and publicly report an
Groups consisting of 112 members representing diverse
inventory of GHG emissions and removals2 associated
industries, government agencies, academia, and non-
with a specific product. The primary goal of this standard
profit organizations from around the world. In 2010,
is to provide a general framework for companies to make
38 companies from a variety of industry sectors “road
informed choices to reduce greenhouse gas emissions
tested” the first draft and provided feedback on its
from the products (goods or services) they design,
practicality and usability, which informed a second draft.
manufacture, sell, purchase, or use. In the context of this
Members of a Stakeholder Advisory Group (consisting of
standard, public reporting refers to product GHG-related
more than 1,600 participants) provided feedback on both
information reported publicly in accordance with the
drafts of the standard.
requirements specified in the standard.
As awareness about climate change increases and
concerns grow, investors are demanding more 1.4 Who should use this standard
transparency, and consumers are seeking greater clarity This standard is designed for companies and
and environmental accountability. Companies are organizations3 of all sizes in all economic sectors
increasingly receiving requests from stakeholders to and in all countries. Companies seeking a better
measure and disclose their corporate GHG inventories, understanding of the GHG inventory of products they
and these requests often include a company’s products design, manufacture, sell, purchase, or use can benefit
and supply chain emissions. Companies must be able to from the use of this standard. Interested users of the
understand and manage their product-related GHG risks standard within companies could include staff from
if they are to ensure long-term success in a competitive product design, procurement, research and development,
business environment and be prepared for any future marketing, energy, environment, logistics, and corporate
product-related programs and policies. sustainability departments. Policy makers and GHG
programs may also be interested in incorporating the
This standard focuses on emissions and removals
standard into their policy or program design.
generated during a product’s life cycle and does not
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1.5 Use of the Product Standard The GHG Protocol Common data is used
for product comparison to develop scope 3
Scope 3 and Product
The Product Standard is intended to support inventories and product
performance tracking of a product’s GHG inventory
Standards both take inventories, including
and emissions reductions over time. Additional a value chain or life data collected from
prescriptiveness on the accounting methodology, such cycle approach to suppliers and other
as allocation choices and data sources, are needed GHG accounting. companies in the value
for product labeling, performance claims, consumer chain. Since there can
and business decision making based on comparison be overlap in data
of two or more products, and other types of product collection, companies may find added business value and
comparison based on GHG impacts. See section 5.3.2 efficiencies in developing scope 3 and product inventories
and Appendix A for more guidance on additional in parallel.
specifications needed for comparison.
While each standard can be implemented independently,
Claims regarding the overall environmental superiority or both standards are mutually supportive. Integrated use
equivalence of one product versus a competing product, might include:
referred to in ISO 14044 as comparative assertions, are
• Applying the Corporate Standard and Scope 3
not supported by the Product Standard.
Standard (to determine the company’s total scope 1,
scope 2, and scope 3 emissions) , using the results to
identify products with the most significant emissions,
1.6 Relationship to the Corporate
then using the Product Standard to identify mitigation
and Scope 3 Standards
opportunities in the selected products’ life cycles
The GHG Protocol Scope 3 Standard and GHG Protocol
• Using product-level GHG data based on the Product
Product Standard both take a value chain or life cycle
Standard as a source of data to calculate scope 3
approach to GHG accounting and were developed
emissions associated with selected product types
simultaneously. The Scope 3 Standard builds on the
• Applying the Corporate Standard, Scope 3 Standard
GHG Protocol Corporate Standard and accounts for
and the Product Standard and using the results to
value chain emissions at the corporate level, while the
inform GHG-reduction strategies at both the product
Product Standard accounts for life cycle emissions at the
and corporate levels
individual product level. Together, the three standards
provide a comprehensive approach to value chain GHG The sum of the life cycle emissions of each of a company’s
measurement and management. products, combined with additional scope 3 categories4
(e.g., employee commuting, business travel, and
The reporting company’s business goals should drive the
investments), should approximate the company’s total
use of a particular GHG Protocol accounting standard.
corporate GHG emissions (i.e., scope 1 + scope 2 + scope
The Scope 3 Standard enables a company to identify
3). In practice, companies are not expected or required
the greatest GHG reduction opportunities across the
to calculate life cycle inventories for individual products
entire corporate value chain, while the Product Standard
when calculating scope 3 emissions.
enables a company to target individual products with the
greatest potential for reductions. The Scope 3 Standard Figure 1.1 illustrates the relationship between the
helps a company identify GHG reduction opportunities, Corporate Standard, Product Standard, and Scope 3
track performance, and engage suppliers at a corporate Standard. In this simplified example, a company
level, while the Product Standard helps a company meet manufactures one product (Product A). The example
the same objectives at a product level. shows how scopes of emissions at the corporate level
correspond to life cycle stages at the product level.
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![CHAPTeR 01 Introduction
Figure [1.1] The relationship between the Corporate, Scope 3, and Product Standards for a company
manufacturing product A
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upstream scope 1 and 2 downstream
scope 3 emissions emissions scope 3 emissions
material acquisition distribution
product A & pre-processing
production
& storage use end-of-life
scope 1 and 2 emissions required by the Corporate Standard
scope 3 emissions required by the Scope 3 Standard
product life cycle emissions required by the Product Standard
1.7 Limitations of product GHG inventories endnotes
The Product Standard accounts for the GHG emissions 1 IPCC, Summary for Policymakers (Table SPM.5: Characteristics
and removals that occur during a product’s life cycle. A of post-TAR stabilization scenarios), in Climate Change 2007:
product assessment limited to only GHGs has the benefit Mitigation. Contribution of Working Group III to the Fourth
Assessment Report of the Intergovernmental Panel on Climate
of simplifying the analysis and producing results that can
Change, ed. B. Metz, O.R. Davidson, P.R. Bosch, R. Dave, L.A.
be clearly communicated to stakeholders. The limitation
Meyer (Cambridge, United Kingdom and New York, NY, USA:
of a GHG-only inventory is that potential trade-offs or co-
Cambridge University Press, 2007).
benefits between environmental impacts can be missed.
2 In this standard, both emissions to the atmosphere and removals
Therefore, the results of a GHG-only inventory should
from the atmosphere are accounted for in order to calculate
not be used to communicate the overall environmental the total GHG inventory of a product. Removals of CO2 generally
performance of a product. Non-GHG environmental occur during photosynthesis.
impacts that occur during the life cycle of a product should 3 The term company is used throughout the standard to represent
also be considered when making decisions to reduce GHG a company or organization that may use the standard.
emissions based on the inventory results. Examples of 4 A scope 3 category is one of 15 types of scope 3 emissions
potentially significant non-GHG impacts for some products organized by activities that occur upstream and downstream
include ecosystem degradation, resource depletion, ozone from a company’s ownership or control.
depletion, and negative human health impacts.
Moreover, while this standard focuses solely on GHG
emissions and removals, the accounting requirements
and guidance provided can be used to collect data for
other environmental impacts. Companies wishing to
include non-GHG impacts along with their GHG inventory
can do so using the same steps and methodologies
provided in this standard.
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ompanies should first identify their business goals before conducting product
GHG inventories. Doing so can bring clarity and assist in selecting the appropriate
methodology and data to develop the inventory.
This standard has been designed as a comprehensive Understanding the location and amount of GHGs in a
accounting and reporting framework to enable a product’s life cycle is valuable information when assessing
company to gather information to serve all the business a company’s risk exposure from that product. Investors are
goals defined below and outlined in table 2.1. becoming more wary of companies that are not evaluating
and managing these and other GHG related risks.
A company can better model potential future costs of
2.1 Climate change management
regulations by using a product inventory to evaluate a
Product GHG inventories, performed according to a
product’s life cycle GHG risks. For example, completing a
consistent framework, provide a quantitative tool to help
product inventory can increase understanding of where
understand GHG risks along a product’s life cycle. Product
there are energy intensive operations in the life cycle. A
inventories also can be used to understand emissions
company can then use this understanding to inform
reductions and cost savings opportunities, as GHG emissions
strategies for reducing dependency on fossil fuels, such
generally relate to energy use and can be a proxy for
as switching to a less energy intensive product material
inefficiencies in a product system. The use of product GHG
or increasing the use of intermodal transportation for
inventories can help product manufacturers avoid the pitfall
product distribution. Stakeholders (e.g., investors) may
of focusing too heavily on the most proximate or obvious
also like to see this risk assessment publicly reported and
emission sources associated with a product’s production
there is growing demand for mandatory disclosure of
while missing major emission reduction and cost-saving
GHG risk in some countries.
opportunities elsewhere in the life cycle.
Performing a product inventory can also be a proactive
approach to assessing future risks related to life cycle 2.2 Performance tracking
GHG emissions. GHG regulations are already in place Product inventories provide detailed information on
in a number of countries and may be enacted in many the relative size and scale of emission sources within life
more in the future. Energy is becoming a scarcer cycle stages and across the entire product system. This
resource, creating price volatility and reduced reliability. information may be used to identify the largest emission
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Table [2.1] Business goals served by a product GHG inventory
Business goal Description
Climate change • Identify new market opportunities and regulatory incentives
management • Identify climate-related physical and regulatory risks in a product’s life cycle
• Assess risks from fluctuations in energy costs and material availability
Performance • Focus efforts on efficiency improvements and cost-saving opportunities through
tracking GHG reductions throughout a product’s life cycle
• Set product-related GHG reduction targets and develop strategies to
achieve goals
• Measure and report GHG performance over time
• Track efficiency improvements throughout a product life cycle over time
Supplier and • Partner with suppliers to achieve GHG reductions
customer • Assess supplier performance for GHG aspects of green procurement efforts
stewardship • Reduce GHG emissions and energy use, costs, and risks in the supply chain and
avoid future costs related to energy and emissions
• Launch a customer education campaign to encourage actions that reduce
GHG emissions
Product • Achieve competitive advantage by pursuing GHG reduction opportunities and
differentiation cost savings to create a low-emitting product
• Redesign a product to better respond to customer preferences
• Strengthen brand image regarding GHG performance
• Enhance employee retention and recruitment resulting from pride in
product stewardship
• Strengthen corporate reputation and accountability through public disclosure
sources – or “hot spots” – in the life cycle and focus efforts 10 percent lower life cycle emissions from its most
on the most cost effective emissions reduction activities. popular shoe might use a product GHG inventory to
determine the most cost effective means of achieving
Product GHG inventories, performed according
the target, selecting from options such as optimizing
to a consistent framework, provide a quantitative
the distribution network, using less GHG-intensive
performance metric to set targets for improvement,
materials, or improving energy efficiency at production
track progress. and communicate successes to internal
facilities. External uses of the performance results
and external stakeholders. External stakeholders,
might include communications to regulators, investors,
including customers, investors, shareholders and others
customers, and local communities, using tools such as
are increasingly interested in measured and reported
an annual corporate sustainability report.
progress in emissions reductions by companies.
Therefore, identifying reduction opportunities, setting
goals and reporting on progress to stakeholders
2.3 Supplier and customer stewardship
may help differentiate a company in an increasingly
From raw material vendors to final consumers, product
environmentally conscious marketplace.
inventories provide an opportunity for companies
Internally, product GHG inventories may be used to to engage with stakeholders throughout a product’s
support less GHG-intensive product design choices life cycle toward the common goal of reducing GHG
and production processes. For example, a shoe emissions. This engagement may also lead to supply
manufacturer seeking to meet a company target of chain efficiencies and consequent cost savings, build
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![CHAPTeR 02 Defining Business Goals
stronger supply chain relationships, and uncover 2.4 Product differentiation
valuable information that can be shared to help build Product differentiation is a broad term, encompassing
positive relationships with product users. For example, all the specific end uses of product GHG inventories
a product GHG inventory of a home appliance may show that may help a company distinguish its products in the
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that much of the emissions occur in the use stage. This marketplace and create competitive advantage. For
information can provide a platform for the manufacturer example, a company may realize product differentiation
to communicate and collaborate with their customers simply by conducting and publicizing a product GHG
(e.g., the users of the appliance) to achieve lower product inventory that demonstrates to stakeholders that
life cycle emissions. If customers then reduced emissions the brand is concerned with environmental impacts.
by reducing electricity use, they would also reap benefits With consumers increasingly concerned about the
in the form of electricity cost savings. Another example is environmental impacts of their product choices, product
a product inventory of a beverage which shows significant GHG inventories enable companies to communicate
emissions from packaging. These results may lead to a with customers about their efforts to assess and reduce
partnership with packaging suppliers to reduce packaging their product-related impacts. Products may also be
materials or replace them with less GHG-intensive differentiated by advertising that their use can lower
content. Reporting on these types of efforts and the consumers’ own GHG emissions (and related energy
progress of a company’s engagement with its suppliers expenses). Company efforts to address product emissions
can be useful information for stakeholders both external can also be an effective message to communicate to
and internal to the reporting company. employees in order to enhance pride in the company’s
1 2
product stewardship and can have positive impacts on 3
employee retention and recruitment.
Swire Beverages
As one of the Coca-Cola anchor bottlers, Swire Beverages if all retailers installed refrigerators, it would
undertakes the manufacture, sale, and distribution of the new refrigerators, save 5 -16 percent
Coca-Cola products. The company conducted life cycle of the life cycle GHG
it would save
GHG studies for nine of the Coca-Cola branded products emissions of drinking
produced in mainland China. 4 5 - 16%
5 products depending
6
of the life cycle on their size.
The results showed that packaging and refrigeration by
retailers were the processes that contributed the most GHG emissions Swire Beverages
significant GHG emissions and risks, especially for small- of drinking and Coca-Cola also
and medium-sized products. Swire Beverages either products identified packaging
leases or sells refrigerators at a discount to retailers. reduction as a key
Following completion of the inventory and evaluation climate mitigation
of reduction opportunities, the company installed strategy and rolled out a new packaging design for a
energy-efficient refrigerator equipment and aggressively bottled water product in China. The new plastic bottle
pursued hydrofluorocarbon (HFC) recovery and HFC-free design reduces packaging material weight by 34 percent
technologies. The new equipment uses 357 40 percent
- and is estimated 8 reduce GHG emissions by 11 percent
to 9
less electricity while reducing the usage of HFC-134a, a over the product life cycle. The new design also helps
refrigerant with high global warming potential. Swire Swire Beverages to save on the procurement cost of
also calculated that if all retailers installed the new packaging materials.
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03 Summary of Steps and Requirements
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T
his chapter provides a summary of the steps involved in product accounting and
reporting, as well as a list of the requirements that must be followed for a product
inventory to be in conformance with this standard.
3.1 Standard terminology
This standard uses precise language to indicate which “may” is used to indicate an option that is permissible
provisions of the standard are requirements, which or allowable. Within the guidance sections, the term
are recommendations, and which are permissible or “required” is used to refer to “shall” statements given
allowable options that companies may choose to follow. elsewhere in the standard. Also within the guidance
The term “shall” is used in this standard to indicate what sections, “needs,” “can,” or “cannot” are sometimes used
is required for a GHG inventory to conform with the to provide guidance on implementing a requirement or
Product Standard. The term “should” is used to indicate to indicate when an action is or is not possible.
a recommendation, but not a requirement. The term
Figure [3.1] Overview of steps in product accounting and reporting
Define Review Review Define the Set the Collect data
business principles funda- scope boundary and assess
goals mentals data quality
Chapter 2 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8
Perform Assess Calculate Perform Report Set
allocation uncertainty inventory assurance inventory reduction
(if needed) results results targets
Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14
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3.2 Overview of steps in product 3.3 Summary of Product Standard
accounting and reporting requirements
Figure 3.1 provides an overview of the steps taken to Table 3.1 provides a summary of all the requirements
perform a product GHG inventory that is in conformance in the Product Standard. Definitions and guidance are
with this standard. Each of these steps is described in provided in the following chapters.
detail in the following chapters.
Table [3.1] Summary of requirements
Chapter Requirements
4. Accounting and • GHG accounting and reporting of a product inventory shall follow the principles
Reporting Principles of relevance, accuracy, completeness, consistency, and transparency
5. Fundamentals of • A GHG product inventory shall follow the life cycle and attributional approaches
Product Life
Cycle Accounting
6. Establishing • Companies shall account for carbon dioxide (CO2), methane (CH4), nitrous oxide
the Scope of a (N2O), sulfur hexafluoride (SF6), perfluorocarbons (PFCs), and hydrofluorocarbons
Product Inventory (HFCs) emissions to, and removals from, the atmosphere
• Additional GHGs included in the inventory shall be listed in the inventory report
• Companies shall define the product, unit of analysis, and reference flow
• For all final products, companies shall define the unit of analysis as a
functional unit
• For intermediate products where the eventual function is unknown, companies
shall define the unit of analysis as the reference flow
7. Boundary Setting • The boundary of the product GHG inventory shall include all attributable processes
• Companies shall report the life cycle stage definitions and descriptions
• Companies shall disclose and justify any exclusions of attributable processes in
the inventory report
• Companies shall report attributable processes in the form of a process map
• Companies shall report any non-attributable processes included in the boundary
• The boundary for final products shall include the complete life cycle,
from cradle-to-grave
• The boundary of a cradle-to-gate partial life cycle inventory shall not include
product use or end-of-life processes in the inventory results
• Companies shall disclose and justify when a cradle-to-gate boundary is defined in
the inventory report
• Companies shall report the time period of the inventory
• Companies shall report the method used to calculate land-use change impacts,
when applicable
8. Collecting Data • Companies shall collect data for all processes included in the inventory boundary
and Assessing • Companies shall collect primary data for all processes under their ownership or control
Data Quality • During the data collection process, companies shall assess the data quality of
activity data, emission factors, and/or direct emissions data by using the data
quality indicators
• For significant processes, companies shall report a descriptive statement on
the data sources, the data quality, and any efforts taken to improve data quality
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![CHAPTeR 03 Summary of Steps and Requirements
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Table [3.1] Summary of requirements (continued)
Chapter Requirements
9. Allocation • Companies shall allocate emissions and removals to accurately reflect the
contributions of the studied product and co-product(s) to the total emissions and
removals of the common process
• Companies shall avoid allocation wherever possible by using process subdivision,
redefining the functional unit, or using system expansion
• If allocation is unavoidable, companies shall allocate emissions and removals based on
the underlying physical relationships between the studied product and co-product(s)
• When physical relationships alone cannot be established or used as the basis
for allocation, companies shall select either economic allocation or another
allocation method that reflects other relationships between the studied product
and co-product(s)
• Companies shall apply the same allocation methods to similar inputs and outputs
within the product’s life cycle
• For allocation due to recycling, companies shall use either the closed loop
approximation method or the recycled content method as defined by this standard
• When using the closed loop approximation method, companies shall report
displaced emissions and removals separately from the end-of-life stage
• Companies shall disclose and justify the methods used to avoid allocation or
perform allocation
• When using the closed loop approximation method, companies shall report
displaced emissions and removals separately from the studied product’s end-of-
life stage inventory
10. Assessing • Companies shall report a qualitative statement on inventory uncertainty and
Uncertainty methodological choices. Methodological choices include:
• Use and end-of-life profile
• Allocation methods, including allocation due to recycling
• Source of global warming potential (GWP) values used
• Calculation models
11. Calculating • Companies shall apply a 100-year GWP factor to GHG emissions and removals data
Inventory Results to calculate the inventory results in units of CO2 equivalent (CO2e)
• Companies shall report the source and date of the GWP factors used
• Companies shall quantify and report the following:
• Total inventory results in CO2e per unit of analysis, which includes all emissions
and removals included in the boundary from biogenic sources, non-biogenic
sources, and land-use change impacts
• Percentage of total inventory results by life cycle stage
• Biogenic and non-biogenic emissions and removals separately when applicable
• Land-use change impacts separately when applicable
• Cradle-to-gate and gate-to-gate inventory results separately or a clear
statement that confidentiality is a limitation to providing this information
• Companies shall not include the following when quantifying inventory results:
weighting factors for delayed emissions; offsets; and avoided emissions
• Companies shall report the amount of carbon contained in the product or its
components that is not released to the atmosphere during waste treatment,
if applicable
• For cradle-to-gate inventories, companies shall report the amount of carbon
contained in the intermediate product
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Table [3.1] Summary of requirements (continued)
Chapter Requirements
12. Assurance • The product GHG inventory shall be assured by a first or third party
• Companies shall choose assurance providers that are independent of,
and have no conflicts of interest with, the product GHG inventory process
• Companies shall report the assurance statement in the inventory report
The statement shall include:
• The level of assurance achieved (limited or reasonable) including assurance
opinion or the critical review findings
• Whether the assurance was performed by a first or third party
• A summary of the assurance process
• The relevant competencies of the assurance providers
• How any potential conflicts of interest were avoided for first party assurance
13. Reporting Companies shall publicly report the following information to be in conformance with
the GHG Protocol Product Standard:
General Information and Scope
• Contact information
• Studied product name and description
• The unit of analysis and reference flow
• Type of inventory: cradle-to-grave or cradle-to-gate
• Additional GHGs included in the inventory
• Any product rules or sector-specific guidance used
• Inventory date and version
• For subsequent inventories, a link to previous inventory reports and description of
any methodological changes
• A disclaimer stating the limitations of various potential uses of the report
including product comparison
Boundary Setting
• Life cycle-stage definitions and descriptions
• A process map including attributable processes in the inventory
• Non-attributable processes included in the inventory
• Excluded attributable processes and justification for their exclusion
• Justification of a cradle-to-gate boundary, when applicable
• The time period
• The method used to calculate land-use change impacts, when applicable
Allocation
• Disclosure and justification of the methods used to avoid or perform allocation
due to co-products or recycling
• When using the closed loop approximation method, any displaced emissions and
removals separately from the end-of-life stage
Data Collection and Quality
• For significant processes, a descriptive statement on the data sources, data
quality, and any efforts taken to improve data quality
Uncertainty
• A qualitative statement on inventory uncertainty and methodological choices.
Methodological choices include:
• Use and end-of-life profile
• Allocation methods, including allocation due to recycling
• Source of global warming potential (GWP) factors used
• Calculation models
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![CHAPTeR 03 Summary of Steps and Requirements
r e q u i r e m e n t s
Table [3.1] Summary of requirements (continued)
Chapter Requirements
13. Reporting Inventory Results
(continued) • The source and date of the GWP factors used
• Total inventory results in units of CO2e per unit of analysis, which includes
all emissions and removals included in the boundary from biogenic sources,
non-biogenic sources, and land-use change impacts
• Percentage of total inventory results by life cycle stage
• Biogenic and non-biogenic emissions and removals separately, when applicable
• Land use impacts separately, when applicable
• Cradle-to-gate and gate-to-gate inventory results separately (or a clear statement
that confidentiality is a limitation to providing this information)
• The amount of carbon contained in the product or its components that is not
released to the atmosphere during waste treatment, when applicable
• For cradle-to-gate inventories, the amount of carbon contained in the
intermediate product
Assurance
• The assurance statement including:
• Whether the assurance was performed by a first or third party
• Level of assurance achieved (limited or reasonable) and assurance opinion or
the critical review findings
• A summary of the assurance process
• The relevant competencies of the assurance providers
• How any potential conflicts of interests were avoided for first party assurance
Setting Reduction Targets and Tracking Inventory Changes
• Companies that report a reduction target and/or track performance over time
shall include the following:
• The base inventory and current inventory results in the updated inventory report
• The reduction target, if established
• Changes made to the inventory, if the base inventory was recalculated
• The threshold used to determine when recalculation is needed
• Appropriate context identifying and describing any significant changes
that trigger base inventory recalculation
• The change in inventory results as a percentage change over time between
two inventories on the unit of analysis basis
• An explanation of the steps taken to reduce emissions based on the
inventory results
14. Setting Reduction Note: Setting a reduction target and tracking inventory changes over time is not
Targets and required to claim conformance with the Product Standard. However, if companies
Tracking Inventory choose to set a reduction target, the following requirements apply.
Changes Over Time To set reduction targets and track inventory changes over time, companies shall:
• Develop and report a base inventory that conforms with the requirements of this
standard
• Recalculate the base inventory when significant changes in the inventory
methodology occur and report those changes
• Complete and disclose an updated inventory report including the updated results,
the base inventory results, and the context for significant changes
• Use a consistent unit of analysis to enable comparison and track performance
over time
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4.1 Introduction
T
he five accounting principles are intended to underpin all aspects of GHG accounting
and reporting for products. Their faithful application should help to ensure that the
product inventory constitutes a true and fair representation of its GHG emissions and
removals. Their primary function is to guide users in the implementation of this standard, in
particular when making accounting choices not specified by the standard.
4.2 Requirements
GHG accounting and reporting of a product Consistency
inventory shall follow the principles Choose methodologies, data, and assumptions that allow
of relevance, accuracy, completeness, for meaningful comparisons of a GHG inventory over time.
consistency, and transparency.
Transparency
Address and document all relevant issues in a
Relevance factual and coherent manner, based on a clear audit
Ensure that the product GHG inventory accounting trail. Disclose any relevant assumptions and make
methodologies and report serves the decision-making appropriate references to the methodologies and data
needs of the intended user. Present information in the sources used in the inventory report. Clearly explain any
report in a way that is readily understandable by the estimates and avoid bias so that the report faithfully
intended users. represents what it purports to represent.
Completeness Accuracy
Ensure that the inventory report covers all product life Ensure that reported GHG emissions and removals are not
cycle GHG emissions and removals within the specified systematically greater than or less than actual emissions
boundaries; disclose and justify any significant GHG and removals and that uncertainties are reduced as far
emissions and removals that have been excluded. as practicable. Achieve sufficient accuracy to enable
intended users to make decisions with reasonable
assurance as to the reliability of the reported information.
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5.1 Introduction
P
roduct life cycle GHG accounting is a subset of life cycle assessment (LCA), which seeks
to quantify and address the environmental aspects and potential environmental
impacts throughout a product’s life cycle from raw material extraction through to
end-of-life waste treatment.1 LCA became internationally standardized by the International
Organization for Standardization (ISO) with the publication of the 14040 series of life cycle
assessment standards. In 2008, the British Standards Institution (BSI), in partnership with
the UK Department of Environment Food and Rural Affairs (DEFRA) and the Carbon Trust,
published a Publicly Available Specification (PAS) for the assessment of life cycle greenhouse
gas emissions of goods and services, known as PAS 2050.2
The Product Standard builds on the framework and 5.2 Requirements
requirements established in the ISO LCA standards
(14040:2006, Life Cycle Assessment: Principles and
A GHG product inventory shall follow the
Framework and 14044:2006, Life Cycle Assessment:
life cycle and attributional approaches.
Requirements and Guidelines) and PAS 2050, with the
intent of providing additional specifications and guidance
to facilitate the consistent quantification and public
Product GHG inventories,4 also commonly known as
reporting of product life cycle GHG inventories. Other
product carbon footprints, are a subset of LCA because
standards and publications such as the ILCD Handbook3
they focus only on the climate change impact category
were also used as reference during the development
(the limitations of which are discussed in chapter 1).
of this standard. The following sections clarify the
However, the accounting methodologies and requirements
relationship between the ISO LCA framework and the
presented in this standard follow the life cycle approach as
Product Standard while identifying two fundamentals on
established by ISO LCA standards 14040 and 14044.
which the Product Standard is based: the life cycle and
attributional approaches to GHG accounting.
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The requirements and guidance in this standard follow Box [5.1] The consequential approach
the attributional approach to life cycle accounting.
The attributional approach is defined as a method in
In addition to the attributional approach, another
which GHG emissions and removals are attributed to
method of life cycle accounting is the consequential
the unit of analysis of the studied product by linking
approach. The consequential approach is defined as an
together attributable processes along its life cycle.5
approach in which processes are included in the life cycle
The attributional approach makes use of primary data
boundary to the extent that they are expected to change
provided by a supplier/customer or average (secondary)
as a consequence of a change in demand for the unit of
data for a given process. Explanation of the terms unit
analysis.6 The consequential approach makes use of data
of analysis, attributable processes, and primary data are
that is not constrained and can respond to changes in
given in chapter 6, chapter 7, and chapter 8, respectively.
demand (e.g., marginal technology information), where
change in demand can occur as a result of changes in
production volumes, production technologies, public
policies, and consumer behaviors. Although not followed
in this standard, the consequential approach can provide
valuable insight in certain applications such as evaluating
reduction projects or making public policy decisions.
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![CHAPTeR 05 Fundamentals of Product Life Cycle GHG Accounting
5.3 Guidance
5.3.1 Phases and steps of a GHG inventory step in identifying what data are needed by determining
The ISO LCA standards define four phases of a LCA attributable processes, but data collection limitations
study: the goal and scope definition, inventory analysis, (as defined in chapter 8) may result in excluding some
g u i d a n c e
impact assessment, and interpretation. To report the processes from the inventory results and justifying
results of an LCA study, ISO also defines critical review those exclusions in the inventory report. Applying the
and reporting as additional steps. Figure 5.1 shows the principles of this standard and clearly setting business
general relationship between the ISO LCA phases of an goals will help companies ensure that the decisions taken
LCA study defined by ISO and the steps to complete a while conducting the inventory and interpreting the final
GHG inventory in conformance with this standard. results are relevant to those goals.
The life cycle approach is by nature an iterative 5.3.2 Use of product rules and sector guidance
technique, where each phase or step is dependent on As mentioned in chapter 1, product comparisons,
the results or methodologies used in another (previous beyond tracking product performance over time,
or subsequent) phase or step. For example, defining need additional specifications to ensure consistent
the unit of analysis (as defined in chapter 6) is a step application of this standard for a product or product
that directly impacts the subsequent steps of boundary category. These specifications are provided within a
setting, data collection, and allocation. However, a product rule. A product rule is a document created by
company may find that to avoid allocation (as defined a group of stakeholders with an interest in a particular
in chapter 9) they need to redefine the unit of analysis. product or product category and the goal of building
Likewise, setting the boundary (chapter 7) is the first consensus on the additional specifications needed to
Figure [5.1] Comparison between the phases of an ISO LCA study and the steps
of a Product Standard GHG inventory
Phases in an
Steps in a product standard GHG inventory The life cycle
ISO LCA study
approach is by
business goals (chapter 2) nature an iterative
principles (chapter 4)
goal and scope definition
fundamentals of product life cycle accounting (chapter 5) technique, where
defining the scope (chapter 6) each phase or
step is dependent
boundary setting (chapter 7)
inventory analysis (LCI) data collection and quality assessment (chapter 8)
on the results or
allocation (chapter 9) methodologies used
in another (previous
or subsequent)
impact assessment calculating inventory results (chapter 11) phase or step.
uncertainty (chapter 10)
interpretation performance tracking (chapter 14)
reporting (chapter 13)
reporting & critical review
assurance (chapter 12)
(when applicable to the
reporting (chapter 13)
goal and scope)
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enable comparisons or declarations about the product. Sector guidance is typically created by a group of
An example is a product category rule (PCR) as defined stakeholders and sector representatives convened to
by ISO 14025:2006. Appendix A includes details on what build consensus on guidance for performing a product
specifications are needed in a product rule to enable GHG inventory within their sector, but without the goal of
different types of comparisons and gives some guidance enabling product comparison.
on creating product rules.
While using product rules and sector guidance is not
required for conformance with this standard, each provides
Table [5.1] Sector guidance and product rule specifications
Inventory step Sector guidance and product rule specifications
Chapter 6: • Choosing a studied product (in sector guidance)
Establishing • Choosing a unit of analysis (functional unit)
the Scope • Identifying whether a cradle-to-gate inventory is appropriate
• Identifying any additional GHGs that are applicable to the product or sector
Chapter 7: • Life cycle stage definitions and descriptions
Boundary Setting • Specific attributable processes
• Relevant non-attributable processes
• Justified excluded attributable processes (including insignificance threshold)
• Use and end-of-life profiles
• Time period
• Method used to calculate land-use change impacts
Chapter 8: • Type of primary data to collect for processes under the reporting company’s control
Collecting Data and • Processes not under the reporting company’s ownership/control where primary
Assessing Data Quality data should be collected
• Secondary data sources and default data values
Chapter 9: • Allocation method and appropriate allocation factor
Allocation • Recycling allocation method
Chapter 10: • Default uncertainty values
Assessing Uncertainty • Likely sources of uncertainty
Chapter 11: • The GWP values to use
Calculating • Default emission factors
Inventory Results
Chapter 12: • The type of assurance to perform
Assurance
Chapter 13: • Optional reporting elements that would be beneficial to stakeholders
Reporting • Additional requirements due to communication type (e.g., label)
Chapter 14: • The base inventory to set
Setting Reduction • Definition of changes that would warrant base inventory recalculation
Targets and Tracking
Inventory Changes
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![CHAPTeR 05 Fundamentals of Product Life Cycle GHG Accounting
additional specifications that can be useful to companies endnotes
as they prepare their inventories. Table 5.1 provides some 1 International Organization for Standardization, ISO 14044:2006,
examples of additional specifications for key inventory Life Cycle Assessment: Requirements and Guidelines. Geneva.
steps. For definitions and explanations of terms included in 2 British Standards Institution et al. PAS 2050:2008: Specification
g u i d a n c e
for the assessment of life cycle greenhouse gas emissions of
the table please see the respective chapters.
goods and services.
Companies using sector guidance and product rules 3 European Commission - Joint Research Centre - Institute for
still need to abide by the requirements of the Product Environment and Sustainability, International Reference Life
Standard. For example, companies may use a product Cycle Data System (ILCD) Handbook - General guide for Life Cycle
rule to help choose an allocation method as long as the Assessment - Detailed guidance. First edition, March 2010.
method is in conformance with chapter 9 and performed Luxembourg: Publications Office of the European Union, 2010.
4 In the Product Standard, a completed GHG assessment is called
using the attributional approach (e.g., primary supplier or
a GHG inventory to be consistent with corporate-level GHG
average data). Companies may not use sector guidance
accounting. The GHG inventory includes both the collection of
or product rules to exclude attributable processes
data and the calculation of the global warming impact. This is
without justification. Any sector guidance or product rules
different from the ISO LCA terminology which defines inventory
used during the inventory process are disclosed in the
as only the collection of data.
inventory report following the reporting requirements 5 Adapted from UNEP and SETAC, Global Guidance Principles for Life
(chapter 13). Cycle Assessment Databases. 2011.
6 Adapted from UNEP and SETAC, Global Guidance Principles for Life
Product rules and sector guidance should be developed
Cycle Assessment Databases. 2011.
through an inclusive multi-stakeholder process to ensure
broad acceptance and facilitate increased consistency and
credibility. Guidance and tools in conformance with the
Product Standard can be found at (www.ghgprotocol.org).
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6.1 Introduction
A
well-defined scope1, aligned with the five accounting principles and the company’s
business goals, can help ensure the final inventory meets the company’s and
stakeholder’s needs. In addition to identifying which GHGs to account for,
establishing the inventory scope involves choosing a product, defining the unit of analysis, and
identifying the reference flow. Specific requirements and guidance are detailed in this chapter.
6.2 Requirements
Companies shall account for carbon Removals from the atmosphere typically occur when CO2
dioxide (CO2 ), methane (CH4 ), nitrous is absorbed by biogenic sources (i.e. plants) and converted
oxide (n2O), sulfur hexafluoride to energy during photosynthesis. However, removals
(SF6 ), perfluorocarbons (PFCs), and may also occur when a product absorbs atmospheric CO2
hydrofluorocarbons (HFCs) emissions during use, or when CO2 from the atmosphere is used
to, and removals from, the atmosphere. during a processing step. Companies shall also account
Additional GHGs included in the inventory for all removals of CO2 from the atmosphere if they are
shall be listed in the inventory report. removed during the product’s life cycle.
Companies shall account for these six gases in their Companies shall define the studied product,
product GHG inventory if they are emitted during unit of analysis, and reference flow.
the product’s life cycle. Companies should account
for any other GHGs whose 100-year GWP values have
The studied product is the product on which the GHG life
been identified by the IPCC if they are emitted during
cycle inventory is performed.
the product’s life cycle.2 Any additional GHGs that are
accounted for shall be listed in the inventory report to
improve transparency.
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The unit of analysis is defined as the performance For intermediate products where the
characteristics and services delivered by the product eventual function is unknown, companies
being studied. The reference flow is the amount of shall define the unit of analysis as the
product on which the results of the study are based. reference flow.
Intermediate products are goods that are used as inputs
For all final products, companies shall define
in the production of other goods and services. For
the unit of analysis as a functional unit.
example, a plastic resin that is eventually transformed
into plastic car parts is an intermediate product.
Final products are goods and services that are ultimately
In general, an intermediate product is a good that
consumed by the end user rather than used in the
eventually becomes a material input into the life cycle of
production of another good or service. Since the function
a final product. Therefore, the service an intermediate
of a final product is known, companies shall define
product fulfills is often dependent on the final product’s
the unit of analysis as a functional unit. The functional
function. When that function is unknown to the company
unit, like unit of analysis, is defined as the performance
performing a GHG inventory on an intermediate product,
characteristics and services delivered by the product
it is not always possible to define the unit of analysis as
being studied. A defined functional unit typically includes
the functional unit. In this case, companies shall define
the function (service) a product fulfills, the duration
the unit of analysis for an intermediate product as the
or service life (amount of time needed to fulfill the
reference flow or amount of product being studied.
function), and the expected quality level.
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![CHAPTeR 06 establishing the scope of a product inventory
6.3 Guidance
6.3.1 Choosing the studied product If it is still unclear through screening exercises and further
A review or screening exercise of all the products a evaluation which product to choose, companies should
company produces, distributes, buys, or sells3 is the opt for a product with the largest anticipated strategic
g u i d a n c e
first step to identifying an individual product to study. impact and GHG reduction potential in the life cycle.
Companies should pick a product that is GHG intensive
6.3.2 Defining the unit of analysis
as well as strategically important and aligned with their
Defining the unit of analysis is a critical step in completing
business goals.
a GHG inventory because it directly influences the
The results of a corporate GHG inventory following the subsequent steps and results of the inventory. For example:
Corporate and Scope 3 Standards can be used to easily
• The duration/service life is the basis for the product’s
identify products or product categories that are GHG
use profile during boundary setting (chapter 7)
intensive. If this inventory is not available, companies
• The reference flow is the basis for all data collection
may use environmentally extended input-output (EEIO)
since it defines the magnitude of material or energy
tables to estimate the GHG intensity of products based
inputs and outputs (chapter 8)
on economic transactions. (See chapter 8 for more
• A well-defined unit of analysis can avoid allocation
information on EEIO tables.) If neither is available,
by including the studied product and co-products
companies may use physical or economic factors to rank
together (chapter 9)
products by mass, volume, or spend. This option is least
• The unit of analysis is the basis on which the inventory
preferred because physical or economic factors alone may
results are reported, and therefore a transparent unit
not correlate with GHG intensity.
of analysis is important to ensure inventory results are
Companies may decide to further evaluate a group interpreted and used correctly (chapters 11 and 13)
of products in more detail. This further evaluation
The following sections provide guidance on defining a
may include looking deeper into where reductions
product’s function, functional unit, and reference flow,
could occur along the product’s life cycle, evaluating
as well as defining the unit of analysis for intermediate
the company’s potential influence on suppliers and
products and services.
customers, researching
Companies should pick supplier relationships Identifying the function
a product that is GHG and potential for The function is the service a product provides. When
intensive as well as engagement, and the function is known (i.e., for final products and some
strategically important ranking products intermediate products), the unit of analysis is the
and aligned with their based on the ability functional unit. Some questions a company may ask to
for marketplace help identify a product’s function include:
business goals.
differential. Companies
• Why is the product created?
may consult with their
• What purpose does the product serve?
product design and/or research and development teams
• What defining characteristics or expected level of
to choose a product for which potential reductions
quality does the product have?
could be met through innovation such as design,
material, or manufacturing advancements. Or they may For example, if the studied product is a light bulb, the
choose a new or emerging product still in prototype product is created for the purpose of providing light.
or conceptual stage where GHG reductions could be The amount of service (e.g., light) that the light bulb
achieved during the product design and implementation provides depends on characteristics such as the amount
stages of development. of luminance and spectrum. In many cases, a product can
have several functions; in this step, companies should
identify all functions before selecting one to serve as the
basis of the functional unit.
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Selecting the function(s) amount of product; or define the functional unit first
If multiple functions are identified, companies should and then determine the amount of product needed to
base the functional unit on the function(s) that best fulfill it. When defining the functional unit first, it is often
reflects what the studied product was designed to do. helpful to base the parameters on product rules, sector
For example, paint fulfills the function of providing wall guidance, or industry average use-profiles. On the other
color and surface protection. If the goal of the company hand, the reference flow may be defined first to specify
is to design paint with longer-lasting color that doesn’t an amount of product included in the study. This could
have to be reapplied as frequently, that is the function be an individual product, bulk packaging of a product, or
on which the functional unit should be based. More than government- or industry-regulated product specifications
one function can be represented in a functional unit if (e.g., government-recommended serving sizes for food
applicable to the goal of the company. products). It is helpful to consider which criterion would
be most meaningful to the user of the report. For
Defining the functional unit and reference flow
example, a functional unit that requires half a product
A well-defined functional unit consists of three general
may be hard for a consumer to understand.
parameters: the magnitude of the function or service; the
duration or service life of that function or service; and the To report efficiency improvements of a product over time,
expected level of quality. Although not all parameters companies should define the functional unit so that, as
may be relevant for all products (or some parameters may improvements are made, the reference flow needed to
be mutually exclusive), considering them helps to ensure fulfill the same functional unit decreases. Consider, for
a robust functional unit definition and makes subsequent example, a laptop computer for which the functional
inventory steps easier, such as defining the use profile unit is average daily use over a 3-year lifetime and the
during boundary setting. reference flow includes two batteries that each have a
1.5-year useful life. Extending the battery life will reduce the
There are two approaches to defining the functional
reference flow in subsequent inventories. (See chapter 14
unit and reference flow: define the reference flow first
for more information on performance tracking over time.)
and then determine the functional unit based on the
ecolab
Ecolab, the global leader in cleaning, sanitizing, food The reference flow was defined as the total pounds of
safety, and infection prevention products and services, product required to fulfill the function, namely:
performed a GHG inventory on the life cycle of their
• 500 racks per day of dishes washed at a typical location
APEXTM automatic warewashing system. Ecolab selected
with 360 operating days per year
the function as the delivery of clean and sanitized dishes
• 1800 parts per million (ppm) average detergent
through an automatic dish machine, which included
concentration within the dish machine (steady-state
the necessary individual functions that the APEXTM
assumption)
warewashing system provides (APEXTM Power, APEXTM
• 0.15 grams of rinse additive per rack of dishes
Rinse Additive, and APEXTM Presoak). They chose the
• 4000 ppm presoak concentration, dispensed twice per day
magnitude and duration of the function as its use in
a typical food service facility for one year and set the By defining a detailed functional unit – considering all
expected level of quality as “clean and sanitized,” functions, quality, magnitude, and duration – Ecolab was
which requires 180 °F water during use. able to quickly and accurately define their reference flow.
Additionally, the information collected about the use of
Using this information, the functional unit was defined as
the product was used during boundary setting (chapter 7)
delivering clean and sanitized dishes through an automatic
to easily define the use profile.
dish machine in a typical food service facility for one year.
[30] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-32-2048.jpg)
![CHAPTeR 06 Establishing the Scope of a Product Inventory
g u i d a n c e
In some cases, a company produces one product in provides meaningful GHG inventory results. This could
multiple varieties (e.g., different flavors or colors). When be a single product or the amount or weight of a typical
the variation does not have an impact on GHG inventory shipment of product (for example, a box of 50 units or
results (chapter 11), companies may define the functional a slab of 100 kilograms) depending on the size of the
unit broadly enough so that the GHG inventory report product and the relative GHG emissions and removals
is applicable to all product variations. If the functional associated with its acquisition and production.
unit and subsequent inventory results are applicable to
6.3.4 Defining the unit of analysis for services
several product variations, this should be noted in the
Defining the unit of analysis for a service should follow the
inventory report.
same general procedure outlined in this chapter. As with
6.3.3 efining the unit of analysis for
D a good, the magnitude, duration, and quality parameters
intermediate products may be based on sector or product rules, industry average
Intermediate products are used as inputs into final data, or a company-specific reference flow. For example, a
products, and the company performing the GHG home insurance company may define their functional unit
inventory on an intermediate product may or may not as the provision of premium home insurance coverage for
know the function of the final product. For example, a one year. The magnitude and quality of the insurance is
steel bar has many uses and therefore the specific end specific to the definition of “premium.”
use may be unknown to a steel producing company. On
the other hand, a producer of a specialized intermediate
product that is manufactured for a specific use will likely endnotes
know the function of the final product. When the function 1 The product inventory scope is different from the concept of
of the final product is known, companies should define scopes as used in the Corporate and Scope 3 Standards.
the unit of analysis as a functional unit. 2 A full list of long-lived GHGs is available in table 2.14 of the IPCC
Fourth Assessment Report, 2007.
For intermediate products where the function of the final 3 Whether the studied product is produced, distributed, or sold
product is unknown, the unit of analysis is the reference by the reporting company depends on the company’s position in
flow. A general rule of thumb when defining a reference the product’s life cycle. For example, a manufacturing company
flow without a functional unit is to use a value that screens products they produce, while a retail company screens
products they buy and sell. More guidance is available in chapter 7.
[31]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-33-2048.jpg)
![g e q d a rn ec m e n t s
r u i u i e
7.1 Introduction
T
he next step in the inventory process is to define the boundary. The boundary identifies
which emissions and removals are included in the GHG inventory. During boundary
setting, companies should complete the following steps:
• Identify the attributable processes along the life cycle that are directly connected to
the studied product and its ability to perform its function
• Group the attributable processes into life cycle stages
• Identify the service, material, and energy flows needed for each attributable process
• Illustrate the product’s life cycle processes through a process map
The following sections include requirements and guidance to help companies define the boundary of the inventory.
7.2 Requirements
(e.g., fertilizers and lubricants), and energy used to move,
The boundary of the product GHG inventory
create, or store the product.
shall include all attributable processes.
An inventory consists of service, material, and energy Companies shall report the life cycle stage
flows that become the product, make the product, and definitions and descriptions.
carry the product through its life cycle. These are defined
as attributable processes. Examples include the studied Interconnected stages make up a product’s life cycle,
product’s components and packaging, processes that and these are a useful way to organize processes, data
create the product, materials used to improve its quality collection, and inventory results. The standard identifies
[33]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-35-2048.jpg)
![r e q u i r e m e n t s
Figure [7.1] The five stages of a product life cycle (simplified for illustrative purposes)
nature nature
material acquisition
& pre-processing
material acquisition
& pre-processing
production
distribution
production & storage
use
distribution
& storage
end-of-life
use
returned to recycled/reused into
nature another product life cycle
end-of-life
end of life
five general life cycle stages, which are illustrated in Attributable processes may be excluded from the
figure 7.1 and referred to throughout the standard. inventory if all of the following are true:
Companies may elaborate or classify the stages differently to • A data gap exists because primary or secondary data
better reflect a specific product’s life cycle. For example, cannot be collected
a company may want to disaggregate into more stages (such • Extrapolated and proxy data cannot be determined to
as separating distribution from storage) or use a term that fill the data gap
better describes the processes taking place within the stage, • An estimation determines the data are insignificant
such as service delivery when the studied product is a service.
Definitions of data types and guidance on filling data gaps
All stages should have clear and logical boundaries and be
are included in chapter 8.
consecutive and interlinked throughout the life cycle.
Companies shall disclose and justify any exclusions of
attributable processes in the inventory report. This should
Companies shall disclose and justify any
include a description of the estimation technique used
exclusions of attributable processes in the
and the insignificance threshold defined.
inventory report.
[34] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-36-2048.jpg)
![CHAPTeR 07 Boundary Setting
g e q d a rn ec m e n t s
RSA Companies shall report attributable
processes in the form of a process map.
RSA, one of the used the results to
world’s leading identify where Companies shall include a process map in their inventory
e
multinational significant GHG report. A process map illustrates the services, materials,
insurance groups, and energy needed to move a product through its
emissions arose in
delivers services in lifecycle. If specific details are considered confidential, a
the insurance process
r u i u i
over 130 countries. company may create a simplified version for the report.
RSA performed a At a minimum, the reported process map should identify
GHG inventory on their MORE TH>N® home insurance the following items:
policy. The MORE TH>N® home insurance policy covers
• The defined life cycle stages
building and contents against damage, loss, or theft.
• The generalized attributional processes in each stage
They defined the unit of analysis as the provision of an
• The flow of the studied product through its life cycle
insurance policy for a period of one year. Recognizing
• Any attributable processes excluded from the
the need to build on the general stages for a service
inventory
such as insurance, RSA adopted the following life cycle
stages for their inventory: A company should create a detailed process map for
internal use and assurance, as it serves as the basis for
• Customer requesting a quote
data collection.
• RSA providing a quote
• RSA setting up the policy and any subsequent An example of a minimal process map to be reported for
amendments the cradle-to-grave inventory of a car is given in figure 7.2.
• RSA sending correspondence throughout the period
of coverage
Companies shall report any non-attributable
• RSA servicing claims throughout the period of coverage
processes included in the boundary.
RSA then grouped their attributable processes by life
cycle stage, and used the results to identify where Some service, material, and energy flows are not directly
significant GHG emissions arose in the insurance connected to the studied product during its lifecycle
process. This, in turn, underpins ongoing GHG- because they do not become the product, make the
reduction work with suppliers. product, or directly carry the product through its life
cycle. These are defined as non-attributable processes.
[35]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-37-2048.jpg)
![r e q u i r e m e n t s
Figure [7.2] Sample process map for a car (cradle-to-grave inventory)
material acquisition distribution
& pre-processing production & storage use end-of-life
e
pre-processing
of flat m e
rolled steel
car
e part e
pre-processing
of plastics
m manufacturing
car
(20 types)
retail
e
car
e use e
pre-processing car
of
paint
m e e dismantling
car car
assembly shipment
e e
pre-processing m shredding
of
lubricants
e m e
pre-processing e energy inputs movement of material
through the lifecycle
of proprietary m material inputs
disposal*
attributable processes
goods
* Recycling of parts is not included in this simplified example
Examples include service, material, and energy flows
The boundary for final products shall include
due to:
the complete life cycle, from cradle-to-grave.
• Capital goods (e.g., machinery, trucks, infrastructure)
• Overhead operations (e.g., facility lighting, air The boundary for final products shall include the cradle-
conditioning) to-grave removals and emissions from material acquisition
• Corporate activities and services (e.g., research and through to end-of-life.
development, administrative functions, company sales
For intermediate products, if the function of the
and marketing)
corresponding final product is known, companies should
• Transport of the product user to the retail location
complete a cradle-to-grave inventory.
• Transport of employees to and from works
Companies are not required to include non-attributable The boundary of a cradle-to-gate partial
processes. However, if non-attributable processes are life cycle inventory shall not include final
included in the boundary, companies shall disclose this in product use or end-of-life processes in the
the inventory report. inventory results. Companies shall disclose
and justify when a cradle-to-gate boundary
is defined in the inventory report.
[36] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-38-2048.jpg)
![CHAPTeR 07 Boundary Setting
r e q u i r e m e n t s
If the function of the final product for which the attributable processes associated with agricultural and
intermediate product is an input is not known, a forestry practices such as growth, fertilizer application,
cradle-to-gate boundary is defined. Cradle-to-gate is a cultivation, and harvesting. For example, rice cultivation
partial life cycle inventory, including all emissions and produces CH4 emissions that would be included as a material
removals from material acquisition through to when the acquisition impact in the inventory of a rice product.
intermediate product leaves the reporting company’s
The second contributory aspect of land use is land-use
gate (typically immediately following its production) and
change. Land-use change impacts may be attributable
excluding final product use and end-of-life. If a cradle-to-
to the studied product’s material acquisition and
gate boundary is defined, companies shall disclose this
preprocessing stage, including:
in the inventory report.
• Biogenic CO2 emissions and removals due to carbon
stock change occurring as a results of land conversion
Companies shall report the time period
within or between land use categories
of the inventory.
• Biogenic and non-biogenic CO2, N2O, and CH4 emissions
resulting from the preparation of converted land, such
The time period of the inventory is the amount of time
as biomass burning or liming1
a studied product takes to complete its life cycle, from
when materials are extracted from nature until they are Guidance on determining when land-use change
returned to nature at the end-of-life (e.g., incinerated) impacts are attributable to the studied product is given
or leave the studied product’s life cycle (e.g., recycled). in Appendix B. The appendix also includes methods to
Non-durable goods, like perishable foods or fuels, typically calculate land-use change impacts for two situations:
have a time period of one year or less. Durable goods, when the specific land from which the product or product
such as computers, cars, and refrigerators, will typically component originates is known and when it is not
have a time period of three years or more. known. When land-use change impacts are attributable,
companies shall include these in the boundary and
Companies shall report the time period of the total
disclose the calculation method in the inventory report.
inventory. The time period should be based on scientific
evidence to the extent possible, and sector guidance or Indirect land-use change2 is defined as land-use change
product rules may be a source of this information when that occurs when the demand for a specific land use (e.g.,
available. If known science, sector guidance, or product an increased demand for crops as a bioenergy feedstock
rules do not exist, companies should assume a minimum in the United States) induces a carbon stock change on
time period of 100 years including the end-of-life stage other land (e.g., increased need for cropland in Brazil
(i.e., the time period cannot exclude end-of-life if the use causing deforestation). This displacement is a result
stage is more than 100 years). of market factors and calculated using data consistent
with a consequential approach. Therefore, the inclusion
of indirect land-use change is not a requirement of this
Companies shall report the method used
standard. (See chapter 5 for more information on the
to calculate land-use change impacts,
consequential versus attributional approach to life cycle
when applicable.
GHG inventories.) However, if indirect land-use impacts
can be calculated and are determined to be significant for
For studied products whose life cycle includes biogenic
a given product, the magnitude of the impacts should be
materials, land use is reflected in two aspects of the
reported separately from the inventory results.
inventory. One is through emissions and removals from
[37]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-39-2048.jpg)
![g u i d a n c e
7.3 Guidance
7.3.1 D
efining life cycle stages and identifying Material acquisition and preprocessing
attributable processes The material acquisition and preprocessing stage starts
The perspective of a company influences the life cycle when resources are extracted from nature and ends when
stage boundaries and definitions. The following guidance the product components enter the gate of the studied
provides examples of life cycle stage boundaries, product’s production facility. Other processes that may
descriptions, and attributable processes from the occur in this stage include recycled material acquisition,
perspective of a company that is performing an inventory processing of materials into intermediate material inputs
on a final product they produce or sell. (preprocessing), and transportation of material inputs
to the production facility. Transportation may also occur
Box [7.1] The role of perspective in product between processes and facilities within the stage, such as
GHG accounting the transport of coal by trucks within a coal mining facility
or the transport of a petrochemical from the refinery to a
preprocessing facility. Examples of attributable processes
Multiple entities are involved in the production,
may include:
distribution, use, and end-of-life of products – including
raw material suppliers, manufacturers, distributors,
Box [7.2] GHG removals
retailers, consumers, etc. Each entity has a different
perspective along the life cycle of a given product.
Depending on an entity’s position in the life cycle, During boundary setting, it is important to document
a portion of the product’s life cycle emissions and attributable processes for which GHG removals from
removals occurs prior to their involvement, while the the atmosphere may occur to ensure removal data are
remainder occurs subsequent to their involvement. collected later in the inventory process.
Figure 7.3 is an example of a company that sells a final
The amount of removal calculated for materials of
product called a widget. In this example, all material
biogenic origin should only reflect the amount of
acquisition and material processing occurs prior to
carbon contained, or embedded, in that material. For
the company’s involvement in the product’s life cycle.
example, if a product requires 50 tons of wood input
Figure 7.4 is an example of a company that produces
that is 50 percent carbon, 25 tons of carbon removal is
an intermediate product to be used in the production
assumed. To convert carbon to CO2, the tons of carbon
of the widget. In this example, widget production
are multiplied by the ratio of molecular weights of
occurs subsequent to the company’s involvement in
CO2 (44) and carbon (12), respectively. Removals
the product’s life cycle. Understanding a company’s
and emissions due to land-use change or other stock
perspective within the life cycle of the studied product
changes associated with the use of biogenic materials
is important as it influences the definition of life cycle
are accounted for as land-use change impacts and are
stages, data collection requirements, and supplier
defined in Appendix B.
engagement opportunities.
Figure [7.3] Perspective of a company producing a final product
material material widget widget widget widget
acquisiton processing production distribution use disposal
[38] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-40-2048.jpg)
![CHAPTeR 07 Boundary Setting
product and ends when the finished studied product
leaves the production gate. Site and gate are figurative
terms, as a product may go through many processes
and corresponding intermediate facilities before exiting
g u i d a n c e
the production stage as a finished product. Processes
associated with co-products or the treatment of wastes
formed during production may also be included in this
stage. Examples of attributable processes may include:
• Physical or chemical processing
• Manufacturing
• Transport of semi-finished products between
manufacturing processes
• Assembly of material components
• Preparation for distribution, e.g., packaging
• Treatment of waste created during production
Product distribution and storage
The product distribution and storage stage starts when
the finished studied product leaves the gate of the
• Mining and extraction of materials or fossil fuels
production facility and ends when the consumer takes
• Photosynthesis (e.g., removal of CO2 from the
possession of the product. Several legs of distribution
atmosphere) for biogenic materials
and storage may occur for one product, such as storage
• Cultivation and harvesting of trees or crops
at a distribution center and a retail location. Examples of
• Application of fertilizer
attributable processes may include:
• Preprocessing of material inputs to the studied
product, such as: • Distribution center or retail location operations
• Chipping wood including:
• Forming metals into ingots • Receipt
• Cleaning coal • Put away
• Conversion of recycled material • Heating/refrigeration
• Preprocessing of intermediate material inputs • Shipping transportation
• Transportation to the production facility and within • Transportation between storage locations
extraction and preprocessing facilities
Product use
Production The use stage begins when the consumer takes possession
The production stage starts when the product of the product and ends when the product is discarded
components enter the production site of the studied for transport to a waste treatment location. The type
Figure [7.4] Perspective of a company producing an intermediate product
material
material pre- widget widget widget widget
acquisiton production distribution use disposal
processing
[39]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-41-2048.jpg)
![g u i d a n c e
and duration of attributable processes in the use stage • Incineration and sorting of bottom ash
depends heavily on the function and service life of the • Land filling and landfill maintenance
product. For products that consume energy to fulfill their
Requirements and guidance for end-of-life recycling are
function, attributable processes in the use stage and their
available in chapter 9.
corresponding emissions may account for the largest
fraction of impacts over the complete life cycle. Examples For a service, the production and use stage may be
of attributable processes may include: combined into the service delivery stage. This stage
encompasses all operations required to complete a
• Transportation to the use location (e.g., consumers
service. For example, in the case of home appliance repair,
driving to their residences)
attributable processes may include driving to the home,
• Refrigeration at the use location
assessing the appliance, ordering or picking up parts, and
• Preparation for use (e.g., microwaving)
returning to complete the final repair. All material flows
• Use (e.g., power consumption)
(e.g., parts needed for the repair), energy flows (e.g., fuel
• Repair and maintenance occurring during usage time3
to deliver the service person and/or parts), and end-of-
end-of-life life considerations of materials and wastes make up the
The end-of-life stage begins when the used product is attributable processes along the service life cycle.
discarded by the consumer and ends when the product
7.3.2 Developing a process map
is returned to nature (e.g., incinerated) or allocated to
Developing a process map is an important requirement
another product’s life cycle (e.g., recycled). Because
when completing an inventory, since processes and
the main attributable process in the end-of-life stage
flows identified in the process map are the basis for
is the method used to treat the product (land filling,
data collection and calculation. Companies may use the
incineration, etc.), companies need to know or assume
following steps:
the fate of the product to map this stage. Examples of
attributable processes may include: 1. Identify the defined life cycle stages at the top of the
map, from material extraction through to end-of-life
• Collection and transport of end-of-life products and
(or production for cradle-to-gate inventories)
packages
• Waste management 2. Identify the position on the map where the studied product
• Dismantling of components is finished, and exits the reporting company’s gate
• Shredding and sorting
[40] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-42-2048.jpg)
![CHAPTeR 07 Boundary Setting
3. Identify component inputs and upstream processing For a cradle-to-gate inventory, the use of the product
steps necessary to create and transport the finished is unknown and therefore the process map ends when
product, aligning the processes with the appropriate the studied product is a finished intermediate product,
life cycle stage typically when it leaves the production stage.
g u i d a n c e
4. Identify the energy and material flows associated with 7.3.3 Identifying attributable processes
each upstream process, including inputs that directly in the use and end-of-life stages
impact the product’s ability to perform its function Companies need to make assumptions about the specific
(e.g., fertilizers, lubricants) and outputs such as waste attributable processes used to create, distribute, and sell
and co-products the studied product as they develop their process map.
Because the way a product is used (often referred to
5. For cradle-to-grave inventories, identify the
as the use profile) can vary significantly between users,
downstream processing steps and energy and material
companies often find it difficult to determine attributable
flows needed to distribute, store, and use the studied
processes for the use stage.
product
The first step is to look at the functional unit definition
6. For cradle-to-grave inventories, identify the energy
for the product. The defined function, as well as the
and material inputs needed for the end-of-life of the
duration and quality of service provided by the product,
studied product
should help identify the use profile processes. Because
Figure 7.5 illustrates the steps to develop a process map the service life does not always correspond directly to
with a generic, simplified cradle-to-grave inventory. the use profile, companies should assume a profile that
most accurately represents the use of their product while
Figure [7.5] Illustrative steps to developing a process map for a company that produces a final product
material acquisition distribution
& pre-processing production & storage use end-of-life
e energy inputs movement of material
through the lifecycle
processing m material inputs attributable processes
of
component A
material m e e e e
input A
production distribution use end-of-life
process process process process
material
input B
m
processing Step [1] Identify the defined life cycle stages
of
component B Step [2] Identify the studied product leaving the production gate
Step [3] Identify component inputs and upstream processes
Step [4] dentify directly connected energy and material flows
I
Step [5+6] Identify downstream processes and energy/material flows
[41]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-43-2048.jpg)
![g u i d a n c e
abiding by the attributional approach of the standard as TAL
well as the data collection requirement that specific data
be used whenever possible. This could be data collected TAL Apparel is a major
from customer surveys, when available, or data based on apparel manufacturer with
industry average values for the average product use. multiple manufacturing
facilities in China and
Attributable processes in both the use and end-of-
Southeast Asia. While TAL
life stage can vary significantly between geographical
has installed sub-meters
locations. While companies can use global averages, they
for most attributable
may find that focusing on a specific region or country
processes for their non-iron shirt, there are still some
provides greater insight into the GHG impacts of the
attributable processes, such as packing, whose energy
product’s use and end-of-life stages. Data collection
use cannot be fully separated from non-attributable
requirements and guidance are available in chapter 8 to
processes that also occur in the factory, such as R&D
help companies determine the most appropriate use and
and product testing. After deducting the emissions of
waste treatment profile.
metered processes from the overall tally, TAL captured
In the case where more than one use or end-of-life profile emissions from the remaining processes (attributable
is possible, companies may assess the scenario uncertainty and non-attributable) that are not sub-metered by
(i.e., sensitivity analysis) to understand the impact each allocating across all products produced in the factory.
potential profile may have on the total inventory results. As a result of using this approach, the product
For example, a company may want users of the report to inventory was able to meet the boundary requirement
know the impact that storing food in the freezer for three to include all attributable processes. By clearly stating
months versus one year has on the inventory results. which non-attributable processes were included in the
More information on scenario uncertainty is available in report, TAL also improved the transparency of their
chapter 10. inventory results.
7.3.4 Estimating to determine insignificance
To determine insignificance, a company should estimate the
process’s emissions using data with upper limit assumptions environmental impact; therefore, the material input is a
to determine whether, in the most conservative case, the justified exclusion. The definition of insignificance should
process is insignificant based on either mass, energy, or reflect the company’s business goals for conducting the
volume, as well as GHG relevance criteria. inventory. As stated previously, companies are required
to disclose and justify any exclusion of attributable
To determine whether an estimate is insignificant or not,
processes in the inventory report.
a company needs to establish a definition of insignificance
which may include a rule of thumb threshold. For example, 7.3.5 non-attributable processes
a rule of thumb for insignificance may be material or Companies are not required to include non-attributable
energy flows that contribute less than one percent of the processes (processes that are not directly connected to
mass, energy, or volume and estimated GHG significance the studied product) in the boundary. However, companies
over a process, life cycle stage, or total inventory.4 should include non-attributable processes in the inventory
if they cannot be separated from attributable process
For example, consider a process for which there is no
data, or if the company determines that the process is
primary or secondary data available on material input
relevant to the studied product. Relevance is determined
X other than that it contributes 0.5 grams to the 100
by the company and may be based on many different
gram total material input for the product. The company
factors including business goals and reduction potentials,
estimates that even if material X is a GHG intensive input,
product rules or sector guidance, and relative impact in
0.5 grams does not exceed one percent of the mass or
relation to the rest of the inventory.
[42] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-44-2048.jpg)
![CHAPTeR 07 Boundary Setting
Ge
GE performed a GHG inventory of their GE Energy 2.5xl were simplified to include only the main material inputs
g u i d a n c e
wind turbine, with the unit of analysis defined as the while still giving an idea of the magnitude compared
quantity of electricity delivered to the grid by one 2.5xl to other stages. The production stage includes sub-
wind turbine over its 20-year lifetime. Using the general assembly of various turbine components. The use stage
life cycle stages defined by this standard, GE developed includes operation and maintenance (O&M) that occurs
a process map to reflect how the various materials and over the 20 years the wind turbine is in operation,
activities should be categorized within the life cycle. The including any related transportation to the installation
wind turbine contains over 10,000 parts, so the material site. The end-of-life stage includes decommissioning
acquisition and preprocessing stage processes (disassembly of turbine) and recycling or disposal of the
turbine materials.
material acquisition distribution
& pre-processing production & storage use end-of-life
material acquisition and processing
transport
hub bed plate converter main shaft gearbox yaw drives
blades
nacelle generator top box main bearing pitch bearing yaw bearing
tower
pitch system main ctrl cab transformer other components
vendor parts shipped to GE
transport transport
site prep
Ge manufacturing vendor parts shipped directly to installation site
& assembly
transport installation recycling/
O&M decommissioning transport
disposal
transport transport
NOTE: The upstream and downstream material and energy inputs are not identified in this process map for simplicity.
The results of this inventory showed that 65 percent of the life cycle GHG emissions occur in the material acquisition
and preprocessing stage. Including the process map in the inventory report will allow GE’s stakeholders to have a visual
understanding of not only the life cycle processes attributable to a wind turbine but also the inventory results.
[43]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-45-2048.jpg)
![g u i d a n c e
Non-attributable process that may be relevant to geographic location, and can vary significantly depending
some products are capital goods and infrastructure. on the type of waste treatment assumed and how long
For example, renewable energy generation such it takes for the product’s carbon to return to nature. For
as hydroelectric and wind power require capital example, waste that is incinerated has a very short time
infrastructure that may have a large GHG impact relative period compared to waste that is disposed of in a landfill.
to the rest of the inventory. This can be determined using Additionally, not all waste treatment methods result in
the same basis and threshold defined when determining the release of the carbon contained in the product into
insignificance. Additionally, a company may see corporate the atmosphere. When a company knows that either
activities, a non-attributable process, as a key area of all or a portion of a product’s carbon does not return to
reduction potential and therefore determine they are the atmosphere during waste treatment, a company is
relevant to include in the product inventory. required to disclose and justify this in the inventory report.
For example, lignin is a carbon-based component of wood
7.3.6 Time period
that does not degrade under anaerobic conditions.5
The total inventory time period is dependent on the
use and end-of-life stages. The use-stage time period is A company may not assume that carbon is stored in a
based on the service life of the product. For example, product by shortening the end-of-life time period. It
if the function of a laptop computer is to provide 5,000 should be known that the carbon is stored indefinitely
computing hours, eight hours a day, five days a week, the as a result of waste treatment. For example, a company
use-stage time period would be 2.4 years. cannot assign an end-of-life time period of five years to a
product that aerobically degrades in ten years.
The end-of-life time period is based on the average waste
treatment profile of the studied product in the assumed 7.3.7 Cradle-to-gate inventories
There are two types of intermediate products: when the
company manufacturing the intermediate product knows
Box [7.3] Relevance and significance
the use profiles of the final product it becomes and when
the intermediate product can be used in many different
Both relevance and significance are used in this final products and therefore has a variety of possible use
standard to define similar concepts. profiles. Just like the unit of analysis of an intermediate
product (see chapter 6), the boundary requirements
Significance is defined as the size of emissions,
are dependent on whether the company knows the use
removals, or GHG intensity and is used quantitatively
profile (e.g., function) of the final product.
throughout the standard. Significance is used in
data quality reporting (chapter 8) to describe data If the use profile is known, companies should perform
that has a large impact on the inventory results. a full life cycle (cradle-to-grave) inventory of the
Insignificance is also used in boundary setting and intermediate product. This provides companies with more
base inventory recalculation (chapter 14) to describe reduction opportunities by including the distribution,
a threshold under which a process or change can be retail, use and end-of-life stages, and stakeholders with a
assumed insignificant to the inventory results. complete picture of the product’s life cycle. An innovative
way to do this is to work with the final product producer;
Relevance is a qualitative term used to describe how
using the primary data and expertise they have on the
decisions made during the inventory process impact
final production, use, and end-of-life can improve the
a company’s business goals. Examples of decisions
completeness and accuracy of the inventory.
that consider relevance include establishing the scope
(chapter 6), including non-attributable processes, and If the use profile is unknown, companies may still decide
screening during data collection (chapter 8). When to perform a cradle-to-grave inventory by picking a
making decisions based on relevance, it is usually representative or average use profile. Alternatively, a
recommended that companies also consider significance. cradle-to-gate inventory may be performed. Transparency
is important when performing a cradle-to-gate
[44] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-46-2048.jpg)
![CHAPTeR 07 Boundary Setting
inventory, particularly when a downstream customer endnotes
of an intermediate product wants to use the cradle-to- 1 This refers only to biomass burning, liming, and other practices
gate data to calculate the cradle-to-grave inventory of used to prepare converted land. Biomass burning and fertilizer
their final product. As stated previously, companies are application due to agricultural and forestry practices are also
g u i d a n c e
included in the inventory as attributable processes, separate from
required to clearly disclose and justify in the inventory
land-use change impacts.
report when a cradle-to-gate boundary is used. For
2 Indirect land use does not refer to the direct land used to
example, an appropriate justification could be lack of
produce an attributable input into the studied product (e.g., the
knowledge of the final product’s use profile. The fact that
land used to produce animal feed which is an attributable input
a cradle-to-gate, and not cradle-to-grave, inventory was
for the studied product beef).
performed should also be made clear in the process map 3 Material inputs such as part replacement due to operation and
and the description of life cycle stages. maintenance may fall within the use or material acquisition stage.
Although the process occurs in the use stage, it may be easiest
A cradle-to-gate inventory performed in conformance
during data collection to include all emissions associated with
with this standard does not include the use and end-of-
that material input over the product’s life cycle during material
life stages of the final product. This is to preserve the
acquisition. For example, if the product requires two timing
continuous nature of the life cycle approach and avoid
belts during its service life, companies can either assume one
cherry picking (e.g., omitting a GHG-intensive use stage during material acquisition and one during use, or both during
but including the end-of-life stage). In some cases, the material acquisition. Either is appropriate as long as this is made
company producing the intermediate product may have transparent in the inventory report.
information on end-of-life processes that would improve 4 Companies may determine significance based on the process, life
the downstream customer’s inventory, such as recycling cycle stage, or inventory level as long as this is done consistently
rates or time period. Companies may include additional throughout the inventory.
information about the end-of-life stage in the report of a 5 Treating waste under anaerobic conditions means that the waste
cradle-to-gate inventory, as long as it is clearly separated degrades with limited oxygen. This typically occurs in landfills
where oxygen is unable to penetrate buried waste.
from the inventory results (e.g., the total CO2 equivalents
[CO2e] per unit of analysis) and process map.
[45]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-47-2048.jpg)
![g e q d a rn ec m e n t s
r u i u i e
8.1 Introduction
D
ata collection can be the most resource intensive step when performing a product GHG
inventory. Data can also have a significant impact on the overall inventory quality.
This chapter provides requirements and guidance to help companies successfully
collect and assess the quality of their inventory data.
8.2 Requirements
Companies shall collect data for all processes Allocated data are considered primary data as long as the
included in the inventory boundary. data meets the other primary data requirements.
Companies shall collect primary data for all During the data collection process,
processes under their ownership or control. companies shall assess the data quality
of activity data, emission factors, and/
Primary data are data collected from specific processes or direct emissions data by using the data
in the studied product’s life cycle. Primary data can be quality indicators.
process activity data (physical measures of a process
that results in GHG emissions or removals), direct Activity data are quantified measures of a level of activity
emissions data (determined through direct monitoring, that results in GHG emissions or removals. Emission
stoichiometry, mass balance, or similar methods) from factors are GHG emissions per unit of activity data. Direct
a specific site, or data that is averaged across all sites emissions data are data on emissions released from a
that contain the specific process. Primary data can be process (or removals absorbed from the atmosphere)
measured or modeled, as long as the result is specific to determined through direct monitoring, stoichiometry,
the process in the product’s life cycle. It is important to mass balance, or similar methods (see section 8.3.4 for
note that using the reference flow of the studied product more details on data types).
(e.g., mass of finished product) as process activity data is
not considered primary data.
[47]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-49-2048.jpg)
![r e q u i r e m e n t s
Box [8.1] Definition of ownership or control The standard defines five data quality indicators to use
in assessing data quality. They are:
A company owns or controls a process if it is under • Technological representativeness: the degree to
its operational or financial control. The GHG Protocol which the data reflect the actual technology(ies)
Corporate Accounting and Reporting Standard used in the process
defines two types of control: financial control and • Geographical representativeness: the degree to
operational control. which the data reflects actual geographic location of
the processes within the inventory boundary (e.g.,
A company has financial control over a process if it
country or site)
has the ability to direct the financial and operating
• Temporal representativeness: the degree to which
policies of the process with a view to gain economic
the data reflect the actual time (e.g., year) or age of
benefits from the activity. For example, financial
the process
control usually exists if the company has the right to
• Completeness: the degree to which the data are
the majority of benefits of the operation. Similarly,
statistically representative of the process sites
a company is considered to financially control a
• Reliability: the degree to which the sources, data
process if it retains the majority of the risks and
collection methods, and verification procedures used
rewards of ownership of the operation’s assets.
to obtain the data are dependable
A company has operational control over a process
Assessing data quality during data collection allows
if the company or one of its subsidiaries has the full
companies to make data quality improvements more
authority to introduce and implement its operating
efficiently than when data quality is assessed after the
policies to the process. This criterion is consistent
collection is complete.
with the current accounting and reporting practice
of many companies that report on emissions
from facilities for which they hold the operating For significant processes, companies shall
license. If the company or one of its subsidiaries is report a descriptive statement on the data
the operator of a facility, it is expected that it has sources, the data quality, and any efforts
the full authority to introduce and implement its taken to improve data quality.
operating policies and thus has operational control,
except in very rare circumstances.
Companies need to determine which processes
For more information on ownership and control are significant in order to report the data sources,
refer to chapter 3 of the GHG Protocol Corporate quality concerns, and quality improvement efforts.
Accounting and Reporting Standard. For example, a process that contributes a substantial
amount of GHG emissions relative to the total life
cycle emissions is significant. The criteria included in
the screening steps below can be helpful to identify
significant processes. See the guidance section for
examples of reporting on data sources, quality, and
improvement efforts for significant processes.
[48] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-50-2048.jpg)
![CHAPTeR 08 Collecting Data and Assessing Data Quality
8.3 Guidance
Companies should follow the steps below when collecting Step 7. Improve the data quality, focusing on processes
data and assessing data quality: that have a significant impact on the inventory
results
g u i d a n c e
Step 1. Develop a data management plan and document
the data collection and assessment processes as The following sections provide guidance on completing
they are completed each of these steps.
Step 2. Identify all data needs using the product’s 8.3.1 Data management plan
process map A data management plan is a tool to help companies
organize and consistently document the data collection
Step 3. Perform a screening to help focus data
process, including sources of data, assumptions made,
collection efforts
and data quality. Documenting the data collection
Step 4. Identify data types process is useful for improving the data quality over
time, preparing for assurance, and revising future
Step 5. Collect primary data for all processes under the
product inventories to reflect changes in the product’s
ownership or control of the reporting company
life cycle. To ensure that all the relevant information
Step 6. For all other processes, collect primary or is documented, a data management plan should be
secondary data. Assess and document the data established early in the inventory process. Detailed
quality of the direct emissions data, activity data, guidance on how to create and implement a data
and emission factors as the data are collected management plan is given in Appendix C.
PepsiCo
PepsiCo, Inc. is a leading global food and beverage specific to the growing processes used for Tropicana
company whose brands include Pepsi, Lay’s, Quaker oranges and would allow the company to track
Oats, Gatorade, and Tropicana. Working with Columbia performance over time. PepsiCo’s selection of primary
University, and using sector guidance developed by the data was further validated when comparison of the
Beverage Industry Environmental Roundtable, PepsiCo data sources showed the secondary data were less
inventoried the GHG emissions from a 64 ounce (1.9 liter) complete and contained significant differences in the
gable top carton of their Tropicana Pure Premium brand fertilizer, on-farm activities, and transportation data.
of orange juice using the following six step process:
By using primary data, PepsiCo found that the orange
1. Develop a comprehensive list of materials growing process, which included fertilizer use and
2. Develop a process map application, contributed approximately 35 percent of the
3. Collect emissions data product’s emissions.
4. Perform a screening analysis As a result, PepsiCo By using primary data,
5. Fill data gaps with additional primary data and is now working with PepsiCo found that
acceptable secondary data one of its long-term the orange growing
6. Calibrate against sector guidance and report orange growers to
process... contributed
test two lower-GHG
35%
By collecting secondary data through the screening
fertilizers in the
analysis step, PepsiCo discovered that the orange
growing process. of the
growing process was a large emissions contributor
to the product inventory. This result led PepsiCo to
product’s emissions.
collect its own primary data since these would be
[49]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-51-2048.jpg)
![g u i d a n c e
8.3.2 Identifying data needs should at a minimum identify and focus data collection on
The attributable processes identified during boundary processes that are known to consume or produce large
setting and in the process map provide a basis for the list amounts of GHG-intensive energy or material inputs.
of data that needs to be collected. The data management
During the screening process it is also helpful to assess
plan can also be used to organize attributable processes if
the estimated uncertainty. Processes that contribute
it is not possible to include them all in a process map.
significantly to the total life cycle emissions based on data
8.3.3 Data screening with high levels of uncertainty should be priority areas for
Screening processes based on their estimated contribution data collection.
to the total life cycle helps companies focus their data
Processes may be relevant for non-emissions-
collection efforts. While such screening is not required,
related reasons for some companies. Under such
it may deliver surprising findings and help companies
circumstances, companies may want to use the
prioritize data collection resources more effectively.
following criteria, in addition to the ones above, to
The most effective way to perform screening is to establish data collection priorities:
estimate the emissions and removals of processes
• Processes that are significant by spend relative to
and process inputs using secondary data and rank the
other processes in the product’s life cycle
estimates in order of their contribution to the product’s
• Processes with potential emissions reductions that
life cycle. Companies can then use this list to prioritize
could be undertaken or influenced by the company
the collection of primary or quality secondary data on the
• Processes that are controlled by suppliers with
processes and process inputs that have the largest impact
strategic importance to the company’s core business
on the inventory results. If companies choose not to
• Processes that meet additional criteria developed by
estimate emissions and removals during screening, they
the company or industry sector
[50] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-52-2048.jpg)
![CHAPTeR 08 Collecting Data and Assessing Data Quality
8.3.4 Identifying data types Box [8.2] Using environmentally extended input-
Identifying the data types used in an inventory will output emission factors
provide companies with a better understanding of the
data and their quality. Typically, data can be gathered in Environmentally extended input-output (EEIO)
g u i d a n c e
one of two ways: models estimate energy use and/or GHG emissions
resulting from the production and upstream supply
1. Directly measuring or modeling the emissions
chain activities of different sectors and products
released from a process
within an economy. The resulting EEIO emissions
2. Collecting activity data and emission factors for factors can be used to estimate GHG emissions for
a process and multiplying the activity data by the a given industry or product category. EEIO data are
emission factor particularly useful in screening emission sources
when prioritizing data collection efforts.
The sources of data used in the inventory should be
documented in the data management plan (see Appendix EEIO models are derived by allocating national GHG
C). Direct emissions data, activity data (process and emissions to groups of finished products based on
financial), and emission factors are types of data defined economic flows between industry sectors. EEIO
in this standard. models vary in the number of sectors and products
included and how often they are updated. EEIO data
Direct emissions data
are often comprehensive, but the level of granularity
Direct emissions data are derived from emission
is relatively low compared to other sources of data.1
releases and are determined through direct monitoring,
stoichiometry, mass balance, or similar methods.
Examples of direct emissions data include:
• Energy (e.G., Joules of energy consumed)
• Emissions from an incinerator measured through
• Mass (e.G., Kilograms of a material)
a continuous emissions monitoring system (CEMS)
• Volume (e.G., Volume of chemicals used)
• A chemical reaction’s emissions determined using
• Area (e.G., Area of a production facility)
stochiometric equation balancing
• Distance (e.G., Kilometers travelled)
• Fugitive refrigerant emissions determined using a
• Time (e.G., Hours of operation)
mass balance approach
Activity data
Financial activity data
Activity data are the quantitative measure of a level of
Financial activity data are monetary measures of a process
activity that results in GHG emissions. Activity data can be
that results in GHG emissions. Financial activity data,
measured, modeled, or calculated.
when combined with a financial emission factor (e.g.,
There are two categories of activity data: process activity environmentally extended input-output [EEIO] emission
data and financial activity data. factor), result in the calculation of GHG emissions.
Process activity data While process activity data measure the physical inputs,
Process activity data are physical measures of a process outputs, and other metrics of a process, financial activity
that results in GHG emissions or removals. These data data measure the financial transactions associated with
capture the physical inputs, outputs, and other metrics a process.
of the product’s life cycle. Process activity data, when
If a company initially collects financial activity data on a
combined with a process emission factor, result in the
process input and then determines the amount of energy
calculation of GHG emissions. Examples of process activity
or material inputs using a conversion factor, the resulting
data include:
activity data are considered process data. For example,
[51]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-53-2048.jpg)
![g u i d a n c e
a company that knows the cost of the fuel consumed in databases is available at (www.ghgprotocol.org). More
a process and the cost per liter of fuel can easily convert information on calculating emissions and inventory results
the fuel value into the physical amount of litres consumed is available in chapter 11.
in the process.
8.3.5 Collecting primary data
emission factors To achieve conformance with this standard, primary
Emission factors are the GHG emissions per unit of activity data are collected for all processes2 under the ownership
data, and they are multiplied by activity data to calculate or control of the reporting company. Primary data are
GHG emissions. Emission factors may cover one type of defined as data from specific processes in the studied
GHG (for example, CH4/liter of fuel) or they may include product’s life cycle. Direct emissions data and process
many gases in units of CO2 equivalents (CO2e). Emission activity data can both be classified as primary data if they
factors can include a single process in a product’s life meet the definition.
cycle, or they can include multiple processes aggregated
Examples of primary data include:
together. Life cycle emission factors that include
emissions from all attributable upstream processes of a • Liters of fuel consumed by a process in the product’s
product are often called cradle-to-gate emission factors. life cycle, either from a specific site or an average
Companies should understand which processes are across all production sites
included in the inventory’s emission factors to ensure that • Kilowatt-hours consumed by a process from an
all processes in the product’s life cycle are accounted for individual site or an average across sites
in the data collection process. • Kilograms of material added to a process
• GHG emissions from the chemical reaction of a process
The types of emission factors needed depend on the
types of activity data collected. For example, if companies Companies typically do not have control over the source
collect financial activity data on a material input to a of emission factors used to calculate the GHG emissions
process, they can select an EEIO emission factor to associated with process activity data, even if the activity
calculate the upstream emissions. Conversely, a company data is primary. Therefore, the source of emission factor
may first collect available emission factors and then has no bearing on the classification to meet the primary
decide which type(s) of activity data to collect.
Examples of emission factor sources include life cycle
Box [8.4] Collecting supplier data
databases, published product inventory reports,
government agencies, industry associations, company-
developed factors, and peer reviewed literature. A list of
Quality data are important to develop a useful
inventory report and to track reductions over time.
Box [8.3] Selecting electricity emission factors
Therefore, the best type of data from suppliers:
• Are based on process-specific information, not
As with data from other emission sources, companies
disaggregated site information from a corporate
should select electricity emission factors that are
inventory; and
geographically specific to the electricity sources used
• Provide sufficient supporting information to enable
in the product inventory. When an electricity supplier
users to understand how the data were gathered,
can deliver a supplier-specific emission factor and
what calculation methodologies were used, and the
these emissions are excluded from the regional
quality of inventory.
emission factor, the supplier’s electricity data should
be used. Otherwise, companies should use a regional Guidance on how to collect supplier data and
average emission factor for electricity to avoid develop a data collection strategy is available at
double counting. (www.ghgprotocol.org).
[52] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-54-2048.jpg)
![CHAPTeR 08 Collecting Data and Assessing Data Quality
data requirement and emission factors do not need to be the primary data collection requirement and therefore
classified as primary or secondary. are always classified as secondary.
If available and of sufficient quality, primary data should Examples of secondary data include:
g u i d a n c e
be collected for all processes in the product’s life cycle.
• Average number of liters of fuel consumed by a
There are several reasons why collecting primary data can
process, obtained from a life cycle database
be beneficial to a company even if the processes are not
• Kilowatt-hours consumed by another similar process
under the company’s ownership or control. For example:
used as a proxy in the studied product’s life cycle
• Collecting primary data from suppliers throughout • Industry-average kilograms of material input into
the product’s life cycle can expand transparency, a process
accountability, and data management to partners in • Industry-average GHG emissions from a process’s
the value chain chemical reaction
• Primary data can better reflect changes in emissions • Amount spent on process inputs, either specific to
resulting from operational changes taken to reduce the process or a company/industry average
emissions, whereas secondary data sources may not
Secondary data can come from external sources (e.g.,
reflect such changes
lifecycle databases, industry associations, etc.) or can be
• Collecting primary data enables companies to more
data from another process or activity in the reporting
effectively track and report progress toward its GHG-
company’s or supplier’s control that is used as a proxy for
reduction goals
a process in the inventory product’s life cycle. This data
8.3.6 Collecting secondary data can be adapted to the process or can be used “as-is” in the
Secondary data are defined as data that are not from studied product’s inventory. For example, suppose the
specific processes in the studied product’s life cycle. studied product’s life cycle includes a process using a steam-
Direct emission data and process activity data that do not generating boiler. If the company does not have primary
meet the definition of primary data can be classified as data for the boiler but does have process activity data for a
secondary. Financial activity data cannot be used to meet boiler used in another product’s life cycle, the company may
use this data for the studied product’s boiler process.
Box [8.5] Questions to assist with selecting a lifecycle database to use with the Product Standard
Many life cycle databases exist, and they vary in 2. Were the data developed using a consistent
their geographic focus, cost, update frequency, methodology?
and review processes. A few questions to use in the 3. For agricultural and forest products, are land-use
selection of a database are listed below. While these impacts included in the LCA emissions data? If yes,
questions can be used to evaluate entire databases, what impacts are included?
companies are required to assess the quality (both in 4. How long has the database existed, and how
representativeness and data collection methods) of the extensively has the database been used?
individual data points chosen from databases as part of 5. How frequently is the database updated?
data quality assessment. A list of databases is available 6. How current are the data sources used for
at (www.ghgprotocol.org). developing the LCA emissions data?
7. Can uncertainties be estimated for the data?
1. Are the process data from a collection of actual
8. Is there any risk that the data will be perceived as
processes or estimated/calculated from other
biased and, if so, have the data and methodologies
data sources?
been independently reviewed?
[53]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-55-2048.jpg)
![g u i d a n c e
8.3.7 Assessing data quality
During data collection, there may be cases where several process(es) in the product’s life cycle. Generally, data
data types (direct emissions data, activity data, emission quality can indicate how representative the data are (in
factors) and data classifications (primary and secondary) time, technology, and geography) and the quality of the
are available for the same process. Figure 8.1 illustrates data measurement (completeness of data collection and
this with an example of 4 different options for collecting the reliability of the data).
the GHG data for process A: direct emissions data (option
Assessing data quality is valuable for a number of
1); primary process activity data (option 2A); secondary
reasons, including:
process activity data (option 2B); and financial activity
data (option 3). Companies may also have several choices 1. Improving the inventory’s data quality. The results
for emission factors. Assessing data quality during data of a data quality assessment can identify which data
collection helps companies determine which data most sources are of low quality, allowing companies to
closely represents the actual emissions released by the improve the overall inventory quality by collecting
process during the studied product’s life cycle. different data of higher quality
Data quality should not be based on intuition or 2. Assisting the assurance process. An assurer may
assumption (e.g., primary data is always better than request information on the quality of the data used in
secondary). Companies are required to assess data the product inventory
quality using data quality indicators. Data quality
3. Demonstrating to stakeholders the quality of the data
indicators can be used to qualitatively or quantitatively
used in the product inventory
address how well the data characterizes the specific
Figure [8.1] Options available to calculate the GHG data for process A
Process A that uses diesel fuel
Option 1 Option 2 Option 3
Direct emissions data Process activity data
e.g., 10 kg CO2 emitted Financial activity data
from process A Option 2A Option 2B e.g., 15 dollars of
(direct measurement diesel fuel purchased
of emissions)
Primary Secondary
e.g., process A uses e.g., an average process A
5 liters of diesel fuel uses 8 liters of diesel fuel
eeIO emission
factor
LCA database emission factor
GHG data for process A
[54] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-56-2048.jpg)
![CHAPTeR 08 Collecting Data and Assessing Data Quality
Data quality indicators and methods quality. Therefore, if resource constraints exist, companies
The five data quality indicators used to assess individual should focus data assessment and subsequent collection of
data points for processes in the product inventory are higher quality data on the largest sources of emissions.
listed in table 8.1.
g u i d a n c e
Qualitative data quality assessment
There are multiple methods for using indicators to The qualitative data quality assessment approach applies
assess data quality, including the qualitative data quality scoring criteria to each of the data quality indicators. This
assessment method outlined in this standard. Regardless rating system has elements of subjectivity. For example,
of the method used, companies should document the some fuel emission factors do not change significantly
approach and results in the data management plan to over time. Therefore, a fuel emission factor that is over
support the assurance process, ensure internal inventory 10 years old, which would be assigned a temporal score
quality controls, and track data quality improvements of ‘poor’ with the data quality in table 8.2, may not be
over time. different from a factor less than 6 years old (a ‘good’
temporal score). Companies should consider the individual
Improving the quality of data for large emission sources can
circumstances of the data when using the data quality
result in a significant improvement in the overall inventory
Table [8.1] Data quality indicators
Indicator Description Relation to data quality
Technological The degree to which the data reflects Companies should select data that
representativeness the actual technology(ies) used are technologically specific.
Temporal The degree to which the data reflects Companies should select data that
representativeness the actual time (e.g., year) or age of are temporally specific.
the activity
Geographical The degree to which the data reflects Companies should select data that
representativeness the actual geographic location of the are geographically specific.
activity (e.g., country or site)
Completeness The degree to which the data are Companies should select data that
statistically representative of the are complete.
relevant activity.
Completeness includes the percentage
of locations for which data is available
and used out of the total number that
relate to a specific activity. Complete-
ness also addresses seasonal and other
normal fluctuations in data.
Reliability The degree to which the sources, data Companies should select data that are
collection methods and verification reliable.
procedures3 used to obtain the data are
dependable.
NOTE: Adapted from B.P. Weidema, and M.S. Wesnaes, “Data quality management for life cycle inventories - an example of using data quality
indicators,” Journal of Cleaner Production. 4 no. 3-4 (1996): 167-174.
[55]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-57-2048.jpg)
![g u i d a n c e
Table [8.2] Sample scoring criteria for performing a qualitative data quality assessment
Score Representativeness to the process in terms of:
Technology Time Geography Completeness Reliability
Very Data generated Data with less Data from the Data from all relevant Verified4 data
good using the same than 3 years of same area process sites over an based on
technology difference adequate time period measurements5
to even out normal
fluctuations
Good Data generated Data with less Data from a Data from more than Verified data
using a similar than 6 years of similar area 50 percent of sites for partly based on
but different difference an adequate time period assumptions
technology to even out normal or non-verified
fluctuations data based on
measurements
Fair Data generated Data with less Data from a Data from less than Non-verified
using a different than 10 years of different area 50 percent of sites for data partly
technology difference an adequate time period based on
to even out normal assumptions
fluctuations or from more or a qualified
than 50 percent of sites estimate (e.g.,
but for shorter time period by sector expert)
Poor Data where Data with more Data from an Data from less than Non-qualified
technology is than 10 years of area that is 50 percent of sites for estimate
unknown difference or the unknown shorter time period
age of the data or representativeness
are unknown is unknown
NOTE: Adapted from Weidema and Wesnaes, 1996.
[56] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-58-2048.jpg)
![CHAPTeR 08 Collecting Data and Assessing Data Quality
Table [8.3] Example of reporting on data sources, quality, and improvement efforts for a significant process
Significant Data sources Data quality Efforts to improve
process name data quality
g u i d a n c e
Fruit product transport Activity Data: Average The activity data We are working to
from distribution kilometers traveled for does not reflect the improve our internal
center to retail store produce in Germany product’s actual data collection efforts
transport distance or on product distance
Source: Trucking
our company’s shipping traveled to obtain
Association
efficiency practices. country-specific
Emission Factor: U.K. emission factors for
The transport emis-
Defra’s Freight Transport truck transport.
sion factor is specific to
United Kingdom trans-
port operations and not
specific to Germany’s
transportation system
(poor geographic
indicator score).
criteria results as a basis for collecting new data or when Allocated data
using the results in an uncertainty assessment. (See Data that has been collected to avoid allocation are
chapter 10 for requirements and guidance on uncertainty.) preferable to data that require allocation. For example,
with other data quality indicators being roughly equal,
When companies do not know the uncertainty of
data gathered at the process level that does not need
individual data points in the inventory they may use the
to be allocated is preferable to facility-level data that
data quality indicator scores to estimate the level of
needs to be allocated between the studied product and
uncertainty. For information on this approach see chapter
other facility outputs. For requirements and guidance on
10. Additional uncertainty calculation guidance and tools
performing allocation see chapter 9.
are available at (www.ghgprotocol.org).
Data transparency
8.3.8 Reporting on data quality
Companies should have enough information to assess
for significant processes
the data with the data quality indicators. If there is not
Companies are required to report on the data sources,
enough information on the collection procedures, quality
data quality, and efforts to improve data quality for
controls, and relevant data assumptions, companies
significant processes. Table 8.3 provides an example
should use that data only if no other data of sufficient
of reporting on data sources, quality, and improvement
quality is available.
efforts for a significant process. The criteria included
in the screening steps can be helpful to identify Uncertainty
significant processes. Data with high uncertainty can negatively impact the
overall quality of the inventory. More information on
8.3.9 Additional data quality considerations
uncertainty is available in chapter 10.
In addition to the data quality indicators in table 8.1,
companies should consider the following quality
considerations:
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![g u i d a n c e
Figure [8.2] Decision tree for filling data gaps
are proxy data available? yes fill data gap with this secondary data
no
disclose and justify
is the process estimated
to be insignificant? yes the data gap
in the inventory report
collect new data
or
no include estimated data in the
inventory results
8.3.10 Data gaps
Data gaps exist when there is no primary or secondary • Adapting an electricity grid emission factor for one
data that is sufficiently representative of the given region to another region with a different generation mix
process in the product’s life cycle. For most processes • Customizing the amount of material consumed by a
where data are missing, it should be possible to obtain process from another product’s life cycle to match a
sufficient information to provide a reasonable estimate. similar process in the studied product
Therefore, there should be few, if any, data gaps. The
estimated data
following sections give additional guidance on filling data
When a company cannot collect proxy data to fill a
gaps with proxy and estimated data.
data gap, companies should estimate the data to
Proxy data determine significance. If processes are determined to
Proxy data are data from similar processes that are used be insignificant based on estimated data, the process
as a stand-in for a specific process. Proxy data can be may be excluded from the inventory results. Criteria for
extrapolated, scaled up, or customized to represent the determining insignificance are outlined in chapter 7.
given process. Companies may customize proxy data
To assist with the data quality assessment, any
to more closely resemble the conditions of the studied
assumptions made in filling data gaps, along with the
process in the product’s life cycle if enough information
anticipated effect on the product inventory final results,
exists to do so. Data can be customized to better match
should be documented. Figure 8.2 illustrates the guidance
geographical, technological, or other metrics of the
for filling data gaps with proxy data or estimated data.
process. Identifying the critical inputs, outputs, and
other metrics should be based on other relevant product 8.3.11 Improving data quality
inventories or other considerations (e.g., discussions with Collecting data and assessing its quality is an iterative
a stakeholder consultant) when product inventories do process for improving the overall data quality of the
not exist. Examples of proxy data include: product inventory. If data sources are identified as low
quality using the data quality indicators, companies should
• Using data on apples as a proxy for all fruit
re-collect data for the particular process. The following
• Using data on PET plastic processes when data on the
steps are useful when improving data quality.
specific plastic input is unknown
[58] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-60-2048.jpg)
![CHAPTeR 08 Collecting Data and Assessing Data Quality
g u i d a n c e
Step 1: Identify sources of low quality data in the endnotes
product inventory using the data quality 1 UNEP and SETAC, Global Guidance Principles for Life Cycle
assessment results. Assessment Databases. 2011.
2 Non-attributable processes under the control of the company
Step 2: Collect new data for the low quality data may be included in the inventory without available primary data.
sources as resources allow. Sources with low This is to be expected if the general rules for collecting quality
quality data that have also been identified as data are applied, since including non-attributable processes in the
significant through the screening process should inventory is not a requirement of this standard.
be given priority. 3 Verification may take place in several ways, for example by on-site
checking, reviewing calculations, mass balance calculations, or
Step 3: Evaluate the new data. If it is of higher quality cross-checks with other sources.
than the original data, use in its place. If the data 4 Verification may take place in several ways, e.g., by on-site
are not of higher quality, either use the existing checking, by recalculation, through mass balance, or by cross-
data or collect new data. checks with other sources.
5 Includes calculated data (e.g., emissions calculated using
Step 4: Repeat as necessary and as resources allow.
activity data) when the basis for calculation is measurement
If companies change data sources in subsequent (e.g., measured inputs). If the calculation is based partly on
inventories they should evaluate whether this change assumptions, the score should be good or fair.
creates the need to update the base inventory. (See
chapter 14 for more information.)
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![g e q d a rn ec m e n t s
r u i u i e
9.1 Introduction
I
n most product life cycles, there is at least one common process that has multiple
valuable products as inputs or outputs and for which it is not possible to collect data at
the individual input or output level. In these situations, the total emissions or removals
from the common process need to be partitioned among the multiple inputs and outputs. This
partitioning is known as allocation, an important and sometimes challenging element of a
product inventory process. Accurately allocating emissions or removals to the studied product
is essential to maintaining the quality of a GHG inventory.
This standard defines two types of products produced This chapter provides requirements and guidance to
from common processes: help companies choose the most appropriate allocation
method to address common processes in their product
• The studied product for which the GHG inventory is
inventory. In addition, definitions and examples of the
being prepared
methods available to avoid or perform allocation are
• Co-product(s) that have value as an input into another
given. The chapter concludes with guidance, including
product’s life cycle
how to choose between allocation methods. For
Inputs to the common process may be services, materials, simplicity, the methods and examples below focus only
or energy inputs. Outputs may be intermediate or final on emissions. However, removals are also subject to
products, energy outputs (such as electricity or district allocation following the same requirements and guidance.
heat), or waste. A typical common process is illustrated
in figure 9.1.
[61]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-63-2048.jpg)
![r e q u i r e m e n t s
Figure [9.1] Illustrative generic common process 9.2 Requirements
that requires allocation1
Companies shall allocate emissions
and removals to accurately reflect the
contributions of the studied product and
emissions
co-product(s) to the total emissions and
removals of the common process.
inputs outputs A studied product, as defined in chapter 6, is the product
on which the GHG inventory is performed. A co-product
is produced during the studied product’s life cycle and
intermediate studied
product A product has value as an input into another product’s life cycle.
To abide by the principle of completeness and accuracy,
companies shall allocate emissions and removals to
intermediate
common co-product
accurately reflect the contribution of the studied product
product B
process A
and co-product(s) to the total emissions and removals of
the common process. A co-product without economic
value is considered a waste and, hence, no emissions or
removals are allocated.
energy input waste
Companies shall avoid allocation wherever
possible by using process subdivision,
redefining the functional unit, or using
system expansion.
[62] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-64-2048.jpg)
![CHAPTeR 09 Allocation
r e q u i r e m e n t s
Table 9.1 describes the methods companies shall Table 9.2 describes the methods companies shall use to
use to avoid or minimize the use of allocation in a perform allocation, starting with physical allocation.
product inventory.
Companies shall apply the same allocation
If allocation is unavoidable, companies methods to similar inputs and outputs
shall allocate emissions and removals based within the product’s life cycle.
on the underlying physical relationships
between the studied product and co- To abide by the principle of consistency, companies shall
product(s). When physical relationships apply the same allocation methods to similar inputs and
alone cannot be established or used as outputs, for example, when an allocated co-product output
the basis for allocation, companies shall is also an input to another process within the life cycle.
select either economic allocation or another
allocation method that reflects other
relationships between the studied product For allocation due to recycling, companies
and co-product(s). shall use either the closed loop
approximation method or the recycled
content method as defined by this standard.
Table [9.1] Methods to avoid allocation
Method Definition
Process subdivision Dividing the common process into sub-processes.
Redefining the unit Inclusion of the co-products (additional functions) in the functional unit.
of analysis
System expansion Using the emissions from an alternative product that comprises the same functional
unit as a co-product to estimate the emissions of the co-product. Only applicable when
companies have direct knowledge of the function and eventual use of the co-product.
Table [9.2] Method to perform allocation
Method Definition
Physical allocation Allocating the inputs and emissions of the system based on an underlying physical
relationship between the quantity of product and co-product and the quantity of
emissions generated.
Economic allocation Allocating the inputs and emissions to the product and co-product(s) based on the
market value of each when they exit the common process.
Other relationships Allocating the inputs and emissions to the product and co-product(s) based on
established and justifiable relationships other than physical or economic.
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![r e q u i r e m e n t s
Allocation due to recycling processes can be especially
Companies shall disclose and justify
challenging. Recycling occurs when a product or material
the methods used to avoid allocation or
exits the life cycle of the studied product to be reused
perform allocation due to co-products
or recycled as a material input into another product’s life
or recycling. When using the closed loop
cycle. This creates a unique allocation scenario because
approximation method, companies shall
the common processes for recycling are often shared
report displaced emissions and removals
between different life cycles.
separately from the studied product’s end-
When recycling occurs in a studied product’s boundary, of-life stage inventory.
companies need to allocate the emissions and removals
associated with the extraction and processing of raw Regardless of which allocation methods are used,
materials and the final disposal of products (including companies shall report a brief explanation of the choice
recycling) between more than one product life cycle of specific allocation methods and factors (if applicable)
(i.e., the product that delivers the recycled material and used in the inventory, including why the methods and
the subsequent product which uses recycled material). factors most accurately reflect the studied product’s or
Therefore, all allocation requirements for common co-product’s contribution to the common process’s total
processes also apply to allocation due to recycling. emissions and removals (See chapter 13).
However, because of the additional complexity When the closed loop approximation method is used in
associated with recycling processes, this standard a GHG inventory, the virgin material displacement factor
provides two specific methods for allocating emissions (as described in section 9.3.6) is subtracted from the total
and removals between product life cycles: the closed inventory results. However, the displacement factor shall
loop approximation method and the recycled content be reported separately from the percentage of inventory
method. The closed loop approximation method is a type results by stage to avoid a negative end-of-life value.
of system expansion that accounts for the impact that
end-of-life recycling has on the net virgin acquisition of
a material. The recycled content method allocates the
recycling process emissions and removals to the life cycle
that uses the recycled material.
If neither the closed loop approximation nor the recycled
content method is appropriate, companies may use
another method if all of the following are true:
• The method conforms to the allocation and all other
requirements of this standard (including being
disclosed and justified in the inventory report)
• The method accounts for all emissions and removals
due to recycling (i.e., applies an allocation factor
between 0 and 100 percent consistently between
inputs and outputs to avoid double counting or
undercounting emissions)
• The method uses as the basis for allocation (in the
following order of preference, if feasible): a physical
properties factor, an economic value factor, or a factor
based on the number of subsequent uses2
[64] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-66-2048.jpg)
![CHAPTeR 09 Allocation
9.3 Guidance
9.3.1 Choosing an appropriate allocation method part of the refinery’s total emissions should be allocated to
This standard provides six valid methods for avoiding the diesel product. Therefore, the refinery process should be
allocation or for allocating emissions from a common subdivided as much as possible into processes that include
g u i d a n c e
process, each suited to different scenarios. only diesel fuel.
Figure 9.2 presents a decision process for selecting the However, because diesel fuel comes from one material
best method for avoiding or performing allocation for a input (crude oil) which is chemically separated into many
given common process in various situations. As shown in different products, process subdivision cannot be used for
figure 9.2, if the output is a waste no allocation is needed. all allocations. After considering process subdivision and
In this case, all emissions are allocated to the studied- simplifying the common processes as much as possible, a
product, and the waste treatment is also included as an company should allocate or avoid allocation of the remaining
attributable process. This is because waste without value common processes using one of the other recommended
is not subsequently used. In the situation where waste allocation methods.
is subsequently used, that output would have some
Redefining the unit of analysis
economic value and is no longer classified as “waste.”
Another method to avoid allocation is to redefine the unit
of analysis to include the functions of both the studied
9.3.2 Avoiding allocation product and the co-product. For guidance on defining the
Process subdivision unit of analysis, see chapter 6.
Process subdivision is used to avoid allocation when it is
exAMPLe
possible to divide the common process into two or more
A company produces a PET bottle designed to contain
distinct processes. Process subdivision may be done
beverages. The company defines the functional unit (unit of
through sub-metering specific process lines and/or using
analysis) and inventory boundary to include only the processes
engineering models to model the process inputs and
attributable to producing, using, and disposing of the bottle.
outputs. The common process is disaggregated into
The production, use, and disposal processes of the beverage
sub-processes that separately produce the studied
are excluded. However, many processes within the inventory
product and co-products. The common process needs
boundary affect both the bottle and the beverage. To avoid
to be sub-divided only to the point at which the studied
allocation the company decides to redefine the functional unit
product and its function is isolated, not to the point that
to include the function of the beverage (to be consumed by
every co-product has a unique and distinct process.
customers). The functional unit is now defined as one bottle
Process subdivision should be considered first and is containing one liter of beverage consumed.
often used together with other methods to avoid or
System expansion
perform allocation, particularly when a single material
The system expansion method estimates the emissions and
input is transformed into more than one product. In this
removals contribution of the co-products to the common
case, process subdivision is not possible for all common
process by substituting the emissions and removals of a
processes because there is a physical, chemical, or
similar or equivalent product or the same product produced
biological separation of the material input. However,
by a different product system.3
process subdivision may only be useful in a limited capacity
for less technical common processes if transparent data Some life cycle assessment practitioners consider system
are not available for all process steps. expansion as a consequential approach to allocation. (See
chapter 5 for more information on consequential and
exAMPLe
attributional approaches to life cycle assessment.) This is
A petroleum refinery produces many outputs including, but
true if marginal data or market trends are used to identify
not limited to, gasoline, diesel fuel, heavy oil, petrol, coke,
the substituted co-product. To ensure the attributional
and bitumen. If the studied product is diesel fuel, then only a
approach is used when performing system expansion, the
[65]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-67-2048.jpg)
![g u i d a n c e
Figure [9.2] Steps to select an allocation method4
Step 1: Avoid allocation if possible
can the co-product’s
emissions be modeled
is the process output can the common process is it practical to combine using a similar process or
a waste (of no be divided the studied product product, and do you have
economic value)? and evaluated and co-product(s) into one direct knowledge
as separate processes? single functional unit? about the eventual use of
the co-product(s)?
yes yes yes yes
redefine the
no need to allocate use process subdivision use system expansion
functional unit
Step 2: If allocation is necessary, determine if a physical relationship exists
is there an underlying physical relationship between
the studied product, co-product(s)
and their emissions contributions?
yes
use physical allocation
Step 3: If a physical relationship cannot be established or is not applicable,
use economic allocation or other relationships
are the market values of the studied product and are there other relationships between
co-product(s) free of significant market effects on their the studied product and co-product(s)
valuation (e.g. brand value, constrained supply, etc.)? that can be established?
yes yes
use economic allocation use other relationships
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![CHAPTeR 09 Allocation
reporting company should know the exact use of the co- multiple inputs (including the studied product) and an
product and collect quality supplier-specific and/or average energy co-product. For example, at a pulp mill, wood is
emission factor data to perform system expansion. converted into pulp and black liquor. Black liquor can be
combusted for internal power generation and/or sold as
g u i d a n c e
When disclosing and justifying which allocation methods
excess power to the grid. To account for the electricity co-
were used, companies that use system expansion should
product from black liquor, system expansion should be used
explain how the selected substitute (and its associated
to identify the emissions associated with the electricity
emissions) a reasonable replacement for the co-product.
generated using the black liquor (based on average grid
Companies that are unsure whether system expansion
values at the mill location). Therefore, if the mill created
is appropriate for their situation should explore other
1000 kg of GHG emissions and 5 MW of electricity, and
methods for avoiding or performing allocation.
the grid data shows that 5 MW of average electricity on
exAMPLe the grid is equivalent to 50 kg of GHG emissions, then the
One situation where system expansion may be particularly mill emissions allocated to the pulp product would be
useful is in allocating incineration emissions between 950 kg (i.e., 1000 kg from the mill - 50 kg from the created
Levi Strauss & Company
Levi Strauss & Co. (LS&Co.) used process subdivision Process subdivision
and physical allocation methods for different allocation For the garment manufacturer, LS&Co. created a process
challenges within the life cycle of a pair of Levi’s® Jeans. model to estimate the studied product’s emissions. Each
step in the garment manufacturing process was modeled
Production
according to the capital equipment used for that step.
LS&Co. collected primary data directly from the two
For example, sewing of the back pocket was modeled by
suppliers of the studied product, a Levi’s® Jean. The
the amount of machine minutes it takes to fully complete
two suppliers were a fabric mill that creates the denim
that assembly step.
fabric from cotton fiber and a garment manufacturer
responsible for cutting, sewing, and finishing the denim Distribution-physical allocation
fabric into the final jeans. After production, the jeans are sent to a distribution
center that packages and ships various products. LS&Co.
Physical allocation
allocated emissions from the energy and material used
For the fabric mill, LS&Co. allocated the GHG emissions
by the total number of products shipped during a year.
from fabric production using a mass allocation factor
This method assumes that all units shipped result in the
because mass is one of the main determinants of material
same emissions, which LS&Co. considers to be reasonable
and energy inputs during the milling process. The fabric
since all products go through the same processes at the
mill provided aggregated data on material use, energy
distribution center.
use, production outputs, and waste streams for their full
production over the year. The fabric mill only produces Retail- physical allocation
denim fabric, so LS&Co. was able to estimate emissions Each retail store sells a variety of products, which
per product by dividing the total facility emissions by requires allocating total store emissions to each product
the facility output. Emissions per product were then type. LS&Co. allocated emissions according to the retail
applied to the total LS&Co. fabric order from the mill to floor space occupied by each product compared to the
determine the total emissions attributable to LS&Co. entire store. They did this by determining the average
floor space and emissions of a retail store along with the
floor area (physical space) occupied by each product to
estimate retail emissions per individual unit.
[67]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-69-2048.jpg)
![g u i d a n c e
Box [9.1] Using physical relationships to allocate emissions from transportation
Allocating emissions from transportation is necessary products and their emissions contributions because
when one or more products are transported but a the fuel use per unit of product in a transport vessel
company only knows the total emissions for the transport is dependent on the mass or volume of their load. To
mode (e.g., a truck, train, aircraft, or vessel). determine which physical allocation factor best describes
this relationship, a company should determine the
Transportation example
limiting factor of the transportation mode (typically mass
A truck transports two products: fruits and vegetables.
or volume).
There is a clear physical relationship between the two
Figure [9.3] Allocating emissions based on a mass physical factor
fuel
fruits 60%
emissions
fruits
60% load mass
transportation
vegetables
40% load mass
vegetables 40%
emissions
In figure 9.3, the amount of fruits and vegetables the truck transports are limited by the mass of the products.
However, if the fruits and vegetables are transported by rail and the limiting factor is the volume of products, the
most appropriate allocation factor would be volume.
Figure [9.4] Allocating emissions based on a volume physical factor
fuel
fruits 30%
emissions
fruits
transportation
30% load volume
vegetables vegetables 70%
30%
emissions
70% load volume emissions
Figure 9.4 shows how the emissions would be allocated using a volume allocation factor.
[68] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-70-2048.jpg)
![CHAPTeR 09 Allocation
electricity). In this example, system expansion would not economic allocation
be appropriate if it was not known that the black liquor Economic allocation is the division of emissions from a
created excess power or if a marginal emission factor was common process to the studied product and co-product(s)
used as data for the electricity substitution. according to the economic values of the products when
g u i d a n c e
leaving the multi-output process.
9.3.3 Performing allocation
Physical allocation When selecting an economic allocation factor,
When performing physical allocation, the factor chosen companies should use the price of the co-product(s)
should most accurately reflect the underlying physical directly after it leaves the common process (i.e., its value
relationship between the studied product, co-product, prior to any further processing). When this direct price
and process emissions and removals. For example, if the is not available or cannot be evaluated, market prices or
mass of the process outputs determine the amount of prices at a later point of the life cycle may be used, but
emissions and removals, choosing an energy content downstream costs should be subtracted to the fullest
factor would not provide the most accurate allocation. extent possible. The market price is the value of the
Examples of physical allocation factors include: product in a commercial market.
• Mass of co-product outputs Other relationships
• Volume of cargo transported The “other relationships” allocation method uses
• Energy content of heat and electricity co-products established sector, company, academic, or other sources
• Number of units produced of conventions and norms for allocating emissions when
• Protein content of food co-products neither physical nor economic allocation is applicable.
• Chemical composition
When no established conventions are available and
the other allocation methods are not applicable to the
common process, a company may make assumptions
GNP Company, makers of Just BARE Chicken
GNP Company, a U.S. poultry producer, conducted a product as two potential allocation methods. The chicken breasts
inventory on their Just BARE® Boneless and Skinless represent 16 percent of the chicken’s total mass and
Chicken Breasts. Just BARE® products come from birds that about 35 percent of the revenue. While a range of
receive no antibiotics and are fed special vegetarian feed products come from the whole chicken, the majority of
formulations. The product package contains 2 to consumer demand is for the boneless, skinless breasts.
3 individual chicken breasts packaged for retail purchase. Other fresh chicken co-products such as tenders, thighs,
Each package is traceable to the specific farm on which and drumsticks would not be produced without also
the chicken was raised and the product is shipped to producing the chicken breasts. Additionally, about half of
retail locations in the the weight of the chicken consists of inedible parts that
net selling price
continental United States. have a low selling price and are not sold in retail stores.
data by meat cut Therefore, GNP Company identified economic allocation
The energy and material
were averaged over as the most appropriate method.
inputs for Just BARE®
a one-year period
as well as other branded Using economic allocation, 35 percent of the facility’s
to determine products are available on energy and material activity data were allocated to the
the economic a facility-wide basis. GNP boneless, skinless breasts. Net selling price data by meat
allocation factor. Company identified mass cut were averaged over a one-year period to determine
and economic allocation the economic allocation factor.
[69]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-71-2048.jpg)
![g u i d a n c e
on the common process in order to select an allocation Economic allocation is preferred when:
method. When using assumptions, companies should
• The physical relationship cannot be established (as
assess the scenario uncertainty to determine how the
described above)
assumptions may impact the inventory results. (See
• The co-products would not be produced using the
chapter 10 for more guidance on assessing uncertainty.)
common process without the market demand for the
9.3.4 Choosing between physical studied product and/or other valuable co-products
and economic allocation (e.g., by-catch from lobster harvesting)
Step 3 in figure 9.2 states that if a physical relationship • The co-products were a waste output that acquires
between the studied product, co-product, and the value in the market place as a replacement for another
emissions and removals of a common process is not material input (e.g., fly ash in cement production)
applicable or cannot be established, then companies • The physical relationship does not adequately reflect
should use economic or other relationships. Physical the relative emissions contributions
relationships cannot be established when the following exAMPLe
conditions apply: In the process of catching lobster, additional fish are often
caught by default and sold as by-catch. By-catch is much
• There is no data available on the physical relationship
less valuable than lobster, but in some cases can account
between the studied product, co-products, and the
for a substantial portion of the mass output of the catching
process emissions and removals (e.g., the process
process. Economic allocation is preferred in this case because
is operated by a supplier and that information is
the co-product (by-catch) would most likely not be caught
proprietary)
in the same manner if the fisherman were not also catching
• There are multiple co-products along with the studied
lobster, and because a change in the physical output of
product and no one common physical allocation factor
products is not strongly correlated to a change in process
is applicable (e.g., some outputs are measured in terms
emissions (i.e., depending on the day more or less by-catch
of energy and others in volume or mass)
and lobster are possible using the same amount of fuel).
However, in many cases it may not be clear whether a
physical relationship can be established, and companies may
Box [9.2] Allocating removals
struggle to determine if an economic relationship is more
applicable. In general, physical allocation is preferred when:
CO2 removals that occur upstream from a common
• A physical relationship between the studied product
process also need to be allocated when part of
and co-products can be established that reflects their
the material that removed the CO2 from the
relative emissions contributions
atmosphere becomes a co-product. In the example
• A change in the physical output of the studied product
illustrating system expansion, black liquor contains
and co-products is correlated to a change in the
lignin and other biogenic materials separated from
common process’s emissions (e.g., if more co-product
the wood during pulping. A company needs to
is produced more emissions occur)
determine the amount of the original wood that
• There is a strong brand influence on the market value
is exiting the boundary as electricity, and then
of the various co-products which does not reflect the
subtract the equivalent amount of removals from
relative emissions contribution of the outputs. (e.g., a
the material acquisition stage. This is also true when
process creates the same product with different brand
a material that contributed to removals is recycled
names that therefore has different prices, but the
into another product’s life cycle. Correctly allocating
relative emissions are the same)
removals is important to avoid double counting
among different products.
[70] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-72-2048.jpg)
![CHAPTeR 09 Allocation
9.3.5 Comparing allocation results 9.3.6 Methods for allocation due to recycling
When one allocation method is not clearly more suitable Closed loop approximation method
than another, companies should perform multiple The closed loop approximation method accounts for
allocations with different methods and compare the the impact that end-of-life recycling has on the net
g u i d a n c e
results. This is particularly important when companies virgin acquisition of a material. Its name derives from
are deciding whether physical, economic, or another the assumption that the material being recycled is used
allocation method is more appropriate. If several methods to displace virgin material input with the same inherent
are performed and similar results are obtained, the choice properties5. The closed loop approximation method is
between the methods should not impact the inventory also known as the following: the 0/100 method; the end-
results and the company should note this in the inventory. of-life approach as defined and supported by many in the
report. If the allocation method(s) result in different metal industry6; the recyclability substitution approach
GHG emissions, companies should select the allocation in the ILCD Handbook 7; and the closed loop8 method
method that provides the more conservative result (e.g., defined in ISO 14044:2006 and shown with examples in
the method that allocates more emissions to the studied ISO 14049:2000.
product as opposed to the co-products).
Since the closed loop approximation method is defined
Companies are required to disclose and justify the methods as a method to allocate recycled materials that maintain
used to avoid allocation or perform allocation. Companies the same inherent properties as its virgin material input,
may also report a range of results as part of the qualitative the properties (e.g., chemical, physical) of the recycled
uncertainty description in the inventory report. material have to be similar enough to the properties
of the virgin material input to be used interchangeably
without any additional changes to the product’s life cycle.
A process map illustrating the closed loop approximation
method is given in figure 9.5.
Alcoa
Alcoa, a leading producer of aluminum, performed aluminum ingot with the same inherent properties as
a cradle-to-grave GHG inventory of their LvL One primary metal. Because of this, it can be assumed that
aluminum truck wheel. Recycling occurs twice during the recycled metal displaces the production of virgin
the life cycle of the wheel. First, scrap created during metal in another product’s life cycle.
the wheel fabrication process is sent to be recycled in
To account accurately for the recycling activity, Alcoa
an ingot casting facility,
calculated the mass of recycled metal during the wheel
and second, the wheels achieved a
fabrication process using a mass balance. For end-of-
themselves are recycled 10% reduction life recycling, Alcoa assumed a recycling rate of 95
at the end-of-life. Both in the total percent based on peer-reviewed literature data specific
metal streams fall into the
inventory results to the recycling rates of aluminum in the commercial
category of the closed loop
compared to an vehicle sector.
approximation method as
described in the standard. LvL One aluminum Alcoa achieved a 10 percent reduction in the total
The recycled metal is wheel with inventory results compared to an LvL One aluminum
processed, remelted, no recycling wheel with no recycling.
and cast into secondary
[71]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-73-2048.jpg)
![g u i d a n c e
Figure [9.5] Example process map illustrating the closed loop approximation method
material acquisition distribution
& pre-processing production & storage use end-of-life
waste
material waste
treatment
output
recovered
virgin material production distribution use collection material
acquisition process process process process
& pre-processing output
assumed virgin recycled recycled materials material recovery
material material pre-processing facility (MRF)
displacement output
movement of material
through the lifecycle
attributable processes
Material recovery facility and recycled material Virgin material displacement factor: Recycling
preprocessing are general terms for the attributable rate of material (recycled output/virgin material input)
processes needed to convert recovered material (e.g., multiplied by the attributable processes for virgin
material collected for reuse) into a recycled material material acquisition and preprocessing.
output ready to be used in another product system.
The virgin material displacement factor is calculated
Specific examples of potential attributable processes
only for the virgin material that has the same inherent
include sorting, shredding, cleaning, melting, and deinking.
properties as the recycled material. For products with
In the closed loop approximation method no emissions several material inputs, only the attributable processes
or removals associated with recycling are allocated associated with the displaced material are considered.
to another product system. However, the creation of
Virgin material acquisition and preprocessing impacts
recyclable material results in the displacement of virgin
should be calculated assuming that all material input is
material and the emissions and removals associated with
virgin. In the case where recycled material is also used as an
its creation.
input, the material acquisition and preprocessing impacts
The following illustrates how to calculate inventory are calculated assuming all virgin input in order to correctly
results for the material acquisition, end-of-life stage, apply the closed loop approximation method. Alternatively,
and virgin material displacement using the closed loop to avoid double accounting, the recycled content approach
approximation method as illustrated in figure 9.5. can be applied to the recycled input with a closed loop
approach applied to the remaining net material output
Virgin material acquisition and preprocessing stage:
(displacing only the primary material input). However this
All attributable processes due to virgin material acquisition
could be difficult and therefore is not advised.
and preprocessing (assumes all input material is virgin).
The closed loop approximation method can also be used
End-of-life stage: All attributable processes due to end-
for recycling within a life cycle stage (e.g., the creation
of-life (including recycling). In figure 9.5 this includes
and reuse of scrap during production).
collection9, waste treatment, material recovery facility,
and preprocessing of recycled material.
[72] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-74-2048.jpg)
![CHAPTeR 09 Allocation
Figure [9.6] Example process map illustrating the recycled content method
material acquisition distribution
& pre-processing production & storage use end-of-life
g u i d a n c e
waste
material waste
treatment
output
virgin virgin
virgin material
material material
pre-
acquisition input
processing
production distribution use collection
process process process process
material recycled
recovery material recycled
facility pre- material
(MRF) processing input
recovered
material
output
movement of material
through the lifecycle
attributable processes
Recycled content method
The recycled content method allocates the recycling The recycled content method does not include
process emissions and removals to the life cycle that attributable processes due to recovered material output.
uses the recycled material. The recycled content
While a virgin material displacement factor is not included
method can be used in open loop situations10 that
in this method, figure 9.6 does illustrate two potential
include recycled material inputs and outputs. Figure
benefits due to recycling in the studied product’s
9.6 illustrates a simplified process map for a product
inventory: the reduction in the amount of waste entering
that uses the recycled content method11. The recycled
waste treatment and the reduction of upstream virgin
content method is also referred to as the cut–off
material acquisition. Reducing the amount of waste
method or the 100-0 method.
entering waste treatment reduces the GHG emissions
The following describes the calculation of the material from waste treatment in the end-of-life stage. Reducing
acquisition and end-of-life stages using the recycled upstream virgin material acquisition reduces the GHG
content method as illustrated in figure 9.6. emissions and removals from material acquisition if the
recycling processes are less GHG intensive than virgin
Material acquisition and preprocessing stage:
extraction. If this is not the case (e.g., recycling processes
All attributable processes due to virgin and recycled
are more GHG intensive than virgin inputs), it is possible
material acquisition and preprocessing. In figure 9.6 this
that using virgin inputs would result in a lower total
includes virgin material preprocessing, virgin material
product inventory than using recycled inputs. This is
acquisition, recycled material preprocessing, and material
an example of when focusing on one impact category
recovery facility.
may drive companies to make product decisions that
End-of-life: All attributable processes due to end-of-life are desirable for one impact (e.g., GHG emissions)
treatment of waste material output. In figure 9.6 this but unfavorable to another (e.g., material depletion).
includes collection and waste treatment. Companies are encouraged to consider all applicable
environmental metrics before making reduction decisions,
as discussed in chapter 14.
[73]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-75-2048.jpg)
![g u i d a n c e
9.3.7 Choosing between closed loop There may be situations where a company feels neither
approximation and the recycled method is appropriate for a given recycled material
content method input or output. In these cases the method used should
In cases where both the closed loop approximation and abide by the specifications given in the requirements
recycled content methods are equally applicable to the section and be referenced from available sector guidance,
studied product, the following guidance provides insight product rules, technical reports, journal articles, or
on which method is most appropriate in certain situations. other standards. For example, companies with paper
products may want to use the “number of subsequent
The recycled content method should be used in the
uses” method recommended by the American Forest
following situations:
and Paper Association for recycling cellulosic fiber in
• When the product contains recycled input, but no paper products.12 Another company may feel economic
recycling occurs downstream allocation is more appropriate for its product’s inventory
• When the market for the recycled material is saturated and therefore reference ISO 14049:2000.13 If a company
(e.g., not all material that is recovered is used as a is using a method that is not published, the company is
recycled input, supply exceeds demand) and therefore strongly encouraged to include details on the method,
the creation of recycled material may not displace the either in the inventory report or as a supplementary
extraction of virgin material document, and to have the method externally verified to
• When the content of recycled material in the product ensure its conformance with this standard.
is directly affected by the company’s activities alone,
When it is not obvious which method is most appropriate,
and therefore the company has control over how
companies should perform a scenario uncertainty
much recycled material input to procure (which could
assessment (e.g., sensitivity analysis) on the potential
potentially be used as a reduction mechanism)
methods and include the results in the inventory report
• The time period of the product’s use stage is long and/
(see chapter 10 for more information on uncertainty).
or highly uncertain and therefore the amount of material
recycled at the end-of-life is also highly uncertain
Box [9.3] Recycling in a cradle-to-gate inventory
The closed loop approximation method should be used in
the following situations:
As defined in chapter 7, the boundary of a cradle-to-
• When the recycled content of the product is unknown
gate inventory does not include the use or end-of-
because recycled material is indistinguishable from
life stages. If an intermediate product has recycled
virgin material in the market
inputs, companies can use the recycled content
• When the market for the recycled material is not
method and account for the material recovery
saturated (e.g., all material that is recovered is used
facility (MRF) and recycling process emissions and
as a recycled input, demand exceeds supply) and
removals for that input. If an intermediate product
therefore creating more recycled material is likely to
is known to be recycled at its end-of-life regardless
increase the amount of recycled material used
of its function during use, companies may report
• When the time period of the product’s use stage is
this separately in the inventory report along with
short and/or well known
any other end-of-life information that may be
useful to a stakeholder. Companies may include
end-of-life recycling in the inventory results for an
intermediate product only if the company knows
the function of the final product and performs a
cradle-to-grave inventory.
[74] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-76-2048.jpg)
![CHAPTeR 09 Allocation
9.3.8 Collecting recycling data
To abide by the attributional approach of the standard, aggregates recycled materials, and it is known that some
data used to determine the amount of recycled material inherent property change occurs, companies should
output is based either on specific recycling data of a assume a percentage of property loss based on other
g u i d a n c e
product, or on average recycling data for the product in available data. Examples of other available data include
the geographic location where the product is consumed reduction in economic value or percentage loss of material
(as defined by the use profile). Recycling data is subject to property such as elasticity. Where it is not possible to
the same requirements and guidance given in chapter 8 disaggregate the data but some portion of the material
for data collection and quality. properties are known to change, it should be clearly noted
as a data quality limitation in the inventory report.
Companies using the closed loop approximation method
should ensure that the data used to determine recycled
material output excludes material where the inherent
properties have changed. Where the only data available
Anvil Knitwear
Anvil Knitwear, Inc. performed a cradle-to-grave GHG for material acquisition and preprocessing as virgin
inventory on two of their t-shirt lines: one that contains yarn. However, with the additional guidance provided
a pre-consumer recycled yarn input and the other a post- by this standard and during the road testing process,
consumer recycled yarn input. The AnvilSustainable™ Anvil determined that the recycled content method was
t-shirt is made from a blend of transitional cotton and also appropriate for the AnvilRecycled® t-shirt. Anvil
recycled polyester (from recycled plastic bottles). The performed the recycled content method by including
AnvilRecycled® t-shirt is produced from yarn spun from the transport, cleaning, and production of the yarn
recycled textile waste clippings from textile cut and sew made from recycled textile clippings as the attributable
operations. Additionally, clippings from the cut and sew processes for the acquisition and preprocessing of the
operations of the AnvilRecycled t-shirt are sold as a
®
yarn. They also assumed no attributable processes for the
recycled material output. end-of-life processing of the sold clipping from their cut
and sew operations because they are used as a recycled
The AnvilSustainableTM t-shirt contains 50 percent
input into other product life cycles. The use of the
post-consumer Polyethylene terephthalate (PET) from
recycled content method reduced the GHG inventory of
recycled plastic bottles and after use is assumed to
the AnvilRecycled® t-shirt
be disposed of in a conventional landfill. Because no the recycled content
significantly compared to
recycling occurs at the end-of-life, Anvil used the recycled method reduced the
the inventory conducted
content method to account for the recycled PET input. GHG inventory of assuming a virgin yarn
The attributable processes for the material acquisition
the AnvilRecycled® emission factor. The
and preprocessing of recycled PET included the curbside
t-shirt significantly additional specificity
collection, sorting, and flaking of PET bottles.
compared to the provided in this standard
However, accounting for recycling in the AnvilRecycled® inventory conducted gave Anvil confidence
t-shirt was more challenging because of the pre-consumer that they were using
assuming a virgin
recycled yarn input and output. In previous assessments, an established and
yarn emission factor.
Anvil took a conservative approach of assuming the accepted recycling
pre-consumer yarn input had the same emission factor allocation method.
[75]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-77-2048.jpg)
![g u i d a n c e
Box [9.4] Comparing closed loop approximation and the recycled content method
The closed loop approximation and recycled content method allocate emissions and removals differently, and
choosing one method over the other can produce different inventory results. The following simplified example
highlights this difference: in this case both methods are equally appropriate for a product that has virgin and
recycling material input, recycled material output, and waste.
example parameters
Data Value Units
Material input 5 tons
Material output 5 tons
Recycled material input 40% Percent of total input
Virgin material input 60% Percent of total input
Recycled material output 25% Percent of total output
Waste output 75% Percent of total output
Virgin material acquisition and preprocessing 10 kg CO2e/ton
Recycled material acquisition (MRF) and preprocessing 3 kg CO2e/ton
Waste treatment 5 kg CO2e/ton
example Results
Inventory results (CO2e) Recycled content Closed loop
method approximation
Material acquisition and preprocessing 36 50
End-of-life 19 23
Virgin material displacement factor 0 [13]
Total 55 60*
*Total = material acquisition & pre-processing + end-of-life - virgin material displacement factor
[76] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-78-2048.jpg)
![CHAPTeR 09 Allocation
Box [9.4] Comparing closed loop approximation and the recycled content method (continued)
Although in this example using the recycled content Additionally, a disclaimer is required as part of the
g u i d a n c e
method results in lower emissions and removals inventory report to avoid incorrect comparisons of
allocated to the studied product, a different scenario inventory results based on different allocation methods
may have the opposite results. To avoid the misuse (see chapter 13 for more details). In cases where choices
or misinterpretation of methodological choices, the are needed in a general standard to accommodate a
standard includes the following requirements related large range of products, companies are encouraged
to recycling: to look towards available product rules and sector
guidance to ensure consistency and comparability (if
• Disclose and justify the method used for recycling;
desired) within a product category or sector. Companies
• Use that same method consistently over time to track
can choose a method other than the recycled content
performance, or if the method changes recalculate the
or closed loop approximation based on product rules or
base inventory as required in chapter 14; and
sector guidance as long as this is disclosed and justified
• Disclose the calculated virgin material displacement
in the inventory report.
separately.
The standard also recommends that companies include
quantitative uncertainty results in their inventory report
(e.g., sensitivity analysis).
endnotes
1 The term “common process” can be one or more processes that 9 Collection may be considered part of the material recovery facility
require allocation. in some product life cycles.
2 As defined in ISO 14044:2006, 4.3.4.3. 10 Recycled material that does not leave a product system
3 In some LCA literature, this method is known as the substitution (e.g., scraps that do not leave the control of the production
or avoided-burden method. company) is an example of a closed loop situation. Material that
4 Steps adapted from ISO 14044:2006, 4.3.4.2. is recycled at the end-of-life and then used in a different product
5 A true closed loop recycling scenario occurs when the recycled (e.g., tires being recycled into asphalt) is an example of an open
material does not leave the studied product’s life cycle and loop situation.
therefore does not require allocation. 11 The collection process is listed as an attributable end-of-life
6 John Atherton, “Declaration by the Metals Industry on Recycling process; however, the location of this process depends on how
Principles,” International Journal of Life Cycle Assessment, 12 no. the recycled material is collected, as discussed above and in
1 (2007):59-60. chapter 7.
7 European Commission - Joint Research Centre - Institute for 12 International Working Group, Life Cycle Inventory Analysis:
Environment and Sustainability, International Reference Life Enhanced Methods and Applications for the Products of the
Cycle Data System (ILCD) Handbook - General guide for Life Cycle Forest Industry. (Washington DC: American Forest and Paper
Assessment - Detailed guidance. Association,1996).
8 ISO 14044:2006 defines open and closed loop recycling as well 13 International Organization for Standardization, ISO 14049:2000,
as open and closed loop allocation procedures. In ISO 14044, an Environmental management — Life cycle assessment —
open loop recycling situation where there is no change in the Examples of application of ISO 14041 to goal and scope definition
inherent properties of the material is treated using a closed loop and inventory analysis. Geneva.
allocation procedure.
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r u i u i e
10.1 Introduction
T
he term uncertainty assessment refers to a systematic procedure to quantify or qualify
the uncertainty in a product inventory. Understanding uncertainty can be crucial
for properly interpreting inventory results. Identifying and documenting sources of
uncertainty can assist companies in understanding the steps needed to improve inventory
quality and increase the level of confidence users have in the inventory results. Because the
audience for a product inventory report is diverse, companies should make a thorough yet
practical effort to communicate the level of confidence and key sources of uncertainty in the
inventory results.
This chapter provides requirements and guidance to 10.2 Requirements
help companies identify, assess, and report qualitative
information on inventory uncertainty. Detailed Companies shall report a qualitative
descriptions of quantitative approaches to assess statement on sources of inventory
uncertainty, and an uncertainty calculation tool are uncertainty and methodological choices.
available at (www.ghgprotocol.org). While remaining Methodological choices include:
current with leading science and practice, the chapter
• Use and end-of-life profile
is intended to favor practicality and feasibility for
companies with a range of uncertainty expertise. • Allocation methods, including allocation
due to recycling
• Source of global warming potential
(GWP) values used
• Calculation models
See table 10.2 for guidance on reporting on these choices.
[79]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-81-2048.jpg)
![g u i d a n c e
Figure [10.1] Iterative process of tracking and evaluating uncertainty
improve quality in areas of high uncertainty
establish set the collect data allocate assess calculate perform report
the scope boundary assess data data uncertainty inventory assurance inventory
quality (if needed) results results
assessment
uncertainty
identify and track uncertainties prioritize, quantify document and report
• parameter uncertainty and/or evaluate uncertainty
• scenario uncertainty
• model uncertainty
10.3 Guidance
10.3.1 Role of the uncertainty assessment process The categories are not mutually exclusive, but they are
Figure 10.1 illustrates the role of uncertainty assessment evaluated and reported in different ways. For example,
within the GHG inventory process. Companies should the same uncertainty source might be characterized as
keep a list of uncertainties throughout the inventory either a component of parameter uncertainty and/or as a
process in order to facilitate the uncertainty assessment, component of scenario uncertainty.
assurance, and reporting processes.
As shown in figure 10.1, these types of uncertainties arise
While the reporting requirements are focused on throughout the stages of the GHG inventory compilation
qualitative descriptions, quantitative assessments of process. Table 10.1 illustrates these various types of
uncertainty can assist companies in prioritizing data uncertainties and how each type can be presented.
quality improvement efforts on the sources that
Parameter uncertainty
contribute most to uncertainty and in understanding the
Parameter uncertainty is the uncertainty regarding
influence methodological choices have on the overall
whether a value used in the inventory accurately
product inventory. A quantitative approach can also add
represents the process or activity in the product’s life
clarity and transparency in reporting on uncertainty to
cycle. If parameter uncertainty can be determined it can
inventory report readers. When available, companies
typically be represented as a probability distribution of
should report quantitative uncertainty results in the
possible values including the value used in the inventory
inventory report. Guidance on quantifying uncertainty can
results. In assessing the uncertainty of a result, parameter
be found at (www.ghgprotocol.org).
uncertainties can be propagated within a model to
10.3.2 Types of uncertainty provide a quantitative measure (also as a probability
The results of a GHG inventory may be affected by various distribution) of uncertainty in the final inventory result.
types of uncertainty, which can arise from different
Single parameter uncertainty
sources within the inventory process. Uncertainty is
Parameter uncertainty addresses the question, how well
divided into three categories: parameter uncertainty,
do the data that are used to represent a parameter fit
scenario uncertainty and model uncertainty, which are
the process in the product inventory. Single parameter
defined in the following section.
uncertainty refers to incomplete knowledge about the true
value of a parameter1. It can arise in relation to three data
types: direct emissions data, activity data, and emission
[80] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-82-2048.jpg)
![CHAPTeR 10 Assessing Uncertainty
Table [10.1] Types of uncertainties and exAMPLe
corresponding sources An emission factor for the production of the plastic used
in a toner cartridge is 4.5 kg of CO2 per kg of plastic resin
Types of uncertainty Sources produced. The emission factor data might be based on a
g u i d a n c e
limited sampling of producers of such resin and may source
Parameter uncertainty • Direct emissions data from an older timeframe or different geography than that
• Activity data in which the resin in question is being produced. Therefore,
• Emission factor data there is parameter uncertainty in the emission factor value
• Global warming being used.
potential (GWP)
Propagated parameter uncertainty
factors
Propagation of parameter uncertainty is the combined
Scenario uncertainty • Methodological effect of each parameter’s uncertainty on the uncertainty
choices of the total computed result. Methods are available
Model uncertainty • Model limitations to propagate parameter uncertainty from single data
points. Two prominent methods applied to propagation
of parameter uncertainty include random sampling (such
as the Monte Carlo method) and analytical formulas (such
Box [10.1] Uncertainty of global warming as the Taylor Series expansion method). These methods
potential factors are described in the quantitative uncertainty guidance
available at (www.ghgprotocol.org).
The uncertainty of the direct global warming exAMPLe
potential (GWP) for CO2, CH4, N2O, HFCs, and PFCs Company A inventoried their printer cartridge product
is estimated to be ± 35 percent for the 90 percent and determined that the total inventory results equaled
confidence interval (5 percent to 95 percent of 155 kg CO2e per functional unit of printing of 50,000
the distribution). This is based on information pages. The activity data, emission factor data and GWPs
provided in the IPCC’s Fourth Assessment Report, applied in this calculation each have a level of individual
and the range given is to reflect the uncertainty parameter uncertainty. Using the Monte Carlo method, the
in converting individual GHG emissions into units propagated parameter uncertainty assessment shows that
of CO2e. As identified in the requirements section there is a 95 percent confidence that the true value of the
10.2, companies are required to report the source product inventory is between 140 and 170 kg CO2e. This
of GWP values used. If companies choose to can also be presented as the inventory total is 155 kg CO2e
quantify inventory uncertainty they may include the (+/-15 kg CO2e)2 per functional unit.
uncertainty of GWP values in their calculations.
Scenario uncertainty
While parameter uncertainty is a measure of how close
the data used to calculate the inventory results are to
factors. Measurement errors, inaccurate approximation,
the true (though unknown) actual data and emissions,
and how the data was modeled to fit the conditions of the
scenario uncertainty refers to variation in results due to
process all influence parameter uncertainty.
methodological choices. The uses of standards reduce
For example, two data points of similar measurement scenario uncertainty by constraining choices the user may
precision may result in very different levels of uncertainty make in their methodology. For example, the attributional
depending on how the data points represent the process’s approach and boundary setting requirements standardize
specific context (i.e., in temporal, technological, and the inventory approach for all products. However, when
geographical representativeness, and completeness terms). there are multiple methodological choices available in the
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![g u i d a n c e
standard scenario uncertainty is created. Methodological exAMPLe
choices include but are not limited to: A model of soy production is involved in predicting emissions
from the production of the cartridge’s soy-based ink. Emissions
• Allocation methods
of N2O due to application of nitrogen fertilizers are based on a
• Product use assumptions
linear modeling of interactions of the fertilizer with the soil and
• End-of-life assumptions
plant systems. As these interactions are more complicated than
To identify the influence of these selections on results, the model assumes, there is uncertainty regarding the emissions
parameters (or combinations of parameters) are varied in resulting from this model.
an exercise known as scenario analysis. Scenario analysis is
10.3.3 Reporting qualitative uncertainty
also commonly called sensitivity analysis. Scenario analysis
Companies are required to report a qualitative description
can reveal differences in the inventory results due to
of uncertainty sources and methodological choices
methodological choices.3
made in the inventory. These include the use and end-
exAMPLeS of-life profiles for cradle-to-grave inventories, allocation
ExAmPLE 1 methods (including recycling allocation methods), the
A company may choose to allocate facility electricity source of GWP used, and any calculation models used to
consumption between the toner production and other quantify emissions and removals.
production lines using the physical allocation factor of the
Quantitative uncertainty assessment is not required,
number of units produced. Using this factor, 30 percent of the
but such an assessment is desirable since it can provide
electricity consumption is allocated to the toner production
a more robust result that can identify specific areas of
process. However, allocating the electricity by the mass of
high uncertainty to track over time. Companies may wish
products results in 40 percent of the electricity consumption
to present both qualitative and quantitative uncertainty
allocated to the toner production process.
information in the inventory report. Companies may
ExAmPLE 2 also describe their efforts to reduce uncertainty in
Company data indicates that 40 percent of the toner future revisions of the inventory. Table 10.2 includes the
cartridges are recycled. Therefore, it can be assumed that required qualitative uncertainty sources to report.
40 percent of the plastic in the cartridge’s casing is recycled.
10.3.4 Uncertainty in comparisons
For both the reporting company and stakeholders, it may be
Comparative uncertainty differs from the various types
interesting to consider how a change in the overall recycling
of uncertainty previously mentioned in that more than
rate would change the inventory results. From an individual
one product or system is considered. This standard is
consumer’s perspective, there might be interest in how the
not intended to support product comparison beyond
inventory results would change when an individual recycles
performance tracking (as described in chapter 1).
(100 percent rather than 40 percent recycling) or does not
However, even within a product inventory, comparative
recycle (0 percent recycling) the cartridge.
uncertainty may arise, such as when comparing the
Model uncertainty impact of one process or stage to another process or
Model uncertainty arises from limitations in the ability of stage in the product’s life cycle.
the modeling approaches used to reflect the real world.
Whenever considering uncertainty in comparisons, the
Simplifying the real world into a numeric model always
uncertainty ranges of each process, life cycle stage, or
introduces some inaccuracies.
product should not be directly compared; instead, the
In many cases, model uncertainties can be represented– uncertainty in the comparison itself should be assessed.
at least in part–through the parameter or scenario That is, rather than comparing the distribution of A
approaches described above. However, some aspects and the distribution of B, companies may assess the
of model uncertainty might not be captured by those distribution of A divided by B. This can be done for both
classifications and are otherwise very difficult to quantify. parameter uncertainty and scenario uncertainty.
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![CHAPTeR 10 Assessing Uncertainty
Table [10.2] Qualitative description of required uncertainty sources
Source of uncertainty Qualitative description
g u i d a n c e
Scenario uncertainty
• Use profile4 Describe the use profile of the product. If more than one use profile
was applicable, disclose which method was used and justify the choice.
• End-of-life profile4 Describe the end-of-life profile of the product. If more than one end-
of-life profile was applicable, disclose which method was used and
justify the choice.
• Allocation method(s) Describe any allocation problems in the inventory and which
allocation method was used. If more than one allocation method was
applicable, disclose which method was used and justify the choice.
• Recycling allocation method(s) Disclose and reference which method was used (closed loop
approximation method or recycled content method).
Parameter uncertainty5
• Global warming potential factors List the source of global warming potential (GWP) factors used.
Model uncertainty
• Model sources not included in Describe the models, identify their published source, and identify
scenario or parameter uncertainty areas where they may deviate from real world conditions.
When comparing the uncertainties between two or more endnotes
processes, stages, or products, it is important to track any 1 Parameter refers to the value(s) assigned to processes, inputs,
common inputs, outputs, and/or processes. When the outputs, within the product’s life cycle.
two items being compared share common elements their 2 In some cases, such as in the use of log-normal distributions,
the distribution around the mean is not symmetrical and the
uncertainties are likely correlated, which should not be
upper and lower confidence levels might need to be specified
included in the uncertainty comparison result. Because
separately (e.g., “-10, +20”, rather than “+/- 15).
of correlation, a comparison of two relatively uncertain
3 Mark A. J. Huijbregts, “Application of uncertainty and variability
results could have relatively high certainty. Identifying
in LCA. Part I: A General Framework for the Analysis of
correlations is important in tracking any changes in the
Uncertainty and Variability in Life Cycle Assessment.”International
product’s inventory over time. Journal of Life Cycle Assessment, 3 no. 5 (1998):273 – 280.
4 For cradle-to-grave inventories.
exAMPLe
5 The description of single parameter uncertainty is included in the
The manufacturer of the toner cartridge determines the
data quality reporting requirements (see chapter 7).
product inventory’s parameter uncertainty is +/- 20 percent.
The company develops a lighter weight cartridge body,
reducing 30 percent of the weight of that component and
3 percent of the total product inventory result. Besides the
difference in weight, the processes in the two inventories are
the same and the data sources are also consistent. Therefore,
while both the original and revised inventories each have a
parameter uncertainty of +/- 20 percent and the difference in
their results is 3 percent, the company can be confident that
the new design has a lower GHG impact.
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![g e q d a rn ec m e n t s
r u i u i e
11.1 Introduction
T
his chapter outlines key requirements, steps, and procedures involved in quantifying
the GHG inventory results of the studied product necessary for public reporting.
11.2 Requirements
Companies shall apply a 100 year global Companies shall quantify and report the
warming potential (GWP) factor to GHG total inventory results in CO2e per unit of
emissions and removals data to calculate analysis, which includes all emissions and
the inventory results in units of CO2 removals included in the boundary from
equivalent (CO2e). Companies shall report biogenic sources, non-biogenic sources,
the source and date of the GWP factor used. and land-use change impacts.
The global warming potential (GWP) is a metric used to Once data collection, allocation, and data quality
calculate the cumulative radiative forcing impact of assessments are complete, companies shall quantify
multiple GHGs in a comparable way. When emissions and report the total inventory results in CO2e per unit
or removals are multiplied by their respective GWP, of analysis (e.g., functional unit). For more information
they become CO2 equivalents (CO2e). Companies on the unit of analysis please refer to chapter 6.
should use GWP values from the Intergovernmental
Panel for Climate Change (IPCC) Fourth Assessment
Report, published in 2007, or the most recent IPCC
values when the Fourth Assessment Report is no longer
current. Although the IPCC provides GWP metrics for
different time periods (e.g., 20 and 500 years), 100 years
is used most often by programs and policies as the
median metric and therefore shall be used to calculate
inventory results in this standard.
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![r e q u i r e m e n t s
In addition to the total inventory results, with a better understanding of what type of emissions
companies shall quantify and report: and removals dominate the inventory and where they
occur along the life cycle.
• Percentage of total inventory results
by life cycle stage
Companies shall not include the following
• iogenic and non-biogenic emissions and
B
when quantifying inventory results:
removals separately when applicable
• Weighting factors for delayed emissions
• Land-use change impacts separately
when applicable • Offsets
• Cradle-to-gate and gate-to-gate • Avoided emissions
inventory results separately or a clear
statement that confidentiality is a
limitation to providing this information In a life cycle, particularly for products that have long
use and end-of-life time periods, emissions may occur
at different points in time and have different impacts
Separately calculating and reporting these components of on the atmosphere. Some methodologies try to capture
the inventory results adds transparency to the product’s this in the life cycle results by applying a weighting
life cycle and provides companies and their stakeholders factor to account for emissions delayed over time (also
[86] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-88-2048.jpg)
![CHAPTeR 11 Calculating Inventory Results
r e q u i r e m e n t s
referred to as emission discounting). In this standard, Companies shall report when carbon contained in
inventory results shall not be calculated with weighting a product or its components is not released to the
factors. This is true for both biogenic and non-biogenic atmosphere during waste treatment and therefore is
emissions, removals, and products. Companies may show considered stored. The amount of carbon stored will
the impact of delayed emissions and removals separately depend on the waste treatment process, the scientific
from the inventory results. It is important to note that understanding of the product’s degradation in certain
if a weighting factor is applied to calculate the impact environments, and the time period chosen. More
of delayed emissions or removals in the end-of-life information on time period is available in chapter 7.
stage, the same factor needs to be applied to end-of-life
In cradle-to-gate inventories, contained carbon leaves the
allocation of co-products and recycled materials.
boundary of the inventory as part of the intermediate
Offsets and avoided emissions are both classified as product. For intermediate product cradle-to-gate inventory
actions that occur outside the boundary of the product’s results to be useful to a downstream customer doing a final
life cycle. Offsets are emission credits (in the form of product cradle-to-grave inventory, companies shall report
emission trading or funding of emission-reductions1 the amount of carbon contained in the product leaving the
projects) that a company purchases to offset the studied boundary (e.g., gate). Companies may include additional
product’s inventory results. Avoided emissions are information about the end-of-life properties of an
quantified as emissions reductions that are indirectly intermediate product separate from the inventory results.
caused by the studied product or a process that occurs
in the studied product’s life cycle. Avoided emissions as
defined here are not the same as emissions reductions
that occur due to directly attributable reduction projects,
or allocated emissions using the system expansion
allocation method. Purchased offsets and avoided
emissions shall not be deducted from the product’s
total inventory results, but may be reported separately.
Guidance on using offsets to meet reduction targets is
available in chapter 14.
Companies shall report the amount of carbon
contained in the product or its components
that is not released to the atmosphere
during waste treatment, if applicable. For
cradle-to-gate inventories, companies shall
report the amount of carbon contained in the
intermediate product.
Many products contain carbon as part of their chemical
makeup or composition. This carbon, which can be
biogenic or non-biogenic, is either recycled or reused
in another product cycle, released as CO2 or CH4 during
waste treatment (due to combustion or decomposition),
or stored as a result of waste treatment (due to land
filling or other treatments that prevent decomposition).
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![g u i d a n c e
11.3 Guidance
11.3.1 Calculating the inventory results of the When direct emissions data has been collected, an emission
studied product factor is not needed and the basic equation to calculate
Companies should follow these steps when calculating inventory results for an input, output, or process is:
the GHG impact of the studied product:
kg CO2e = Direct Emissions Data x GWP
(kg GHG) [kg CO2e/kg GHG]
1. Choose a GWP value
Because radiative forcing is a function of the
concentration of GHGs in the atmosphere, and because If direct emissions data and activity data are available,
the methodology to calculate GWP continues to companies may find benefit in completing and calculating
evolve, GWP factors are reassessed every few years both ways as a cross-check.
by the IPCC. The most current GWP factors published
When CO2 is removed from the atmosphere by the
by the IPCC at the time of this standard’s publication
product during the use phase (e.g., CO2 uptake by
are the factors published in the Fourth Assessment
cement), the removal data may come in the form of a
Report (2007). The Fifth Assessment Report is set
removal rate per mass or volume of product. However,
to be completed in 2013-2014 and will likely contain
the most typical form of atmospheric CO2 removal is due
updated factors. A table of the most recent GWP
to biogenic uptake during photosynthesis. In this case,
values is available at (www.ghgprotocol.org).
companies usually only know the amount of biogenic
Companies may choose to use other GWP values. For carbon contained in the material or product. To convert
example, some companies may want to use the second this to CO2, the amount of carbon is multiplied by the
assessment report values to be consistent with national ratio of molecular weights of CO2 (44) and carbon (12),
inventories following the UNFCCC. Although it is required respectively. CO2 removal data, like direct emissions data,
that companies calculate inventory results using the does not need to be multiplied by an emission factor and
100-yr GWP, companies may choose to calculate and can simply be multiplied by the GWP of 1 for CO2.
separately report results using a 20 or 500 year GWP
kg CO2e = kg Biogenic Carbon x (44/12) x GWP
factors or other impact assessment metrics such as global [kg CO2e/kg GHG]
temperate potential (GTP) if they feel this would be
useful information to their stakeholders.
Alternatively, companies may want to sum all emissions
Multipliers or other corrections to account for radiative and removals per GHG per unit of analysis before applying
forcing may be applied to the GWP of emissions arising the GWP. This approach is recommended if companies
from aircraft transport. When used, the type of multiplier wish to have the option of reporting results separately by
and its source should be disclosed in the inventory report. GHG or using a different GWP value.
2. Calculate CO2e using collected data Companies should be cognizant of significant figures and
The following equations illustrate how to calculate CO2e rounding rules when calculating emissions and removals,
for an input, output, or process based on activity data, particularly when using emissions factors from a life
emission factors, and GWP. More information on data cycle database or software program that automatically
collection and sources of emission factors are available in calculates emissions when activity data are given as an
chapter 8. input. The number of significant figures of the emission
data should not exceed that of the activity data or
When process or financial activity data is collected, the
emission factor with the least significant figures used in
basic equation to calculate CO2e for an input, output, or
the calculation.
process is:
kg CO2e = Activity Data x Emission Factor x GWP
(unit) [kg GHG/unit] [kg CO2e/kg GHG]
[88] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-90-2048.jpg)
![CHAPTeR 11 Calculating Inventory Results
g u i d a n c e
3. Calculate total inventory results The total CO2e/unit of analysis represents the amount
(CO2e/unit of analysis) of CO2 equivalent GHGs entering the atmosphere as a
Once the inventory results in CO2e are calculated, the result of fulfilling the function of a product. Therefore,
company needs to ensure that all results are on the same emissions are treated as positive values and removals are
reference flow basis. For example, if the reference flow treated as negative values.
for the studied product is 10 kg and the inventory results
Land-use change impacts are included in the total
are per kg of product, all the inventory results need to
inventory results if they are attributable to the studied
multiplied by 10. Because the reference flow represents
product. Guidance on calculating land-use change impacts
to amount of product needed to fulfil the unit of
is included in Appendix B. If no land-use change impacts
analysis, results on the reference flow basis are summed
are attributable and no removals occur during the
together to calculate the total CO2e/unit of analysis. More
product’s life cycle, the total inventory results are simply
information on reference flows and unit of analysis is
the sum of emissions in CO2e per reference flow.
available in chapter 6.
The following components make up the total inventory
results:
Total CO2e CO2e Emissions (Biogenic) CO2e Removals (Biogenic)
= – +
unit of analysis reference flow reference flow
CO2e Emissions (Non-Biogenic) CO2e Removals (Non-Biogenic) CO2e Land Use Change Impacts
– +
reference flow reference flow reference flow
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![g u i d a n c e
4. Calculate percentage of total inventory If companies are unsure whether emissions are from a
results by life cycle stage biogenic or non-biogenic source, they should include
The inventory results per life cycle stage are calculated those emissions as non-biogenic. In some cases, a product
using the same equation given in step 3 above. Land-use may have no biogenic emissions, biogenic and non-
change impacts and removals are typically included in the biogenic removals, or land-use change impacts. If only
material acquisition and preprocessing or production stage non-biogenic emissions occur in the inventory, companies
depending on the perception of the reporting company. may report only the total inventory results and note this
In some cases removals may occur during the use stage in the inventory report.
(e.g. the absorption of CO2 by cement). If the removals are
6. Calculate cradle-to-gate and gate-to-gate
large enough to create a negative percent impact from that
inventory results separately
stage, this should be noted clearly in the inventory report.
In addition to reporting separately the inventory result
The following equation is used to determine the components, reporting inventory results by cradle-to-gate
percentage of total inventory results by life cycle stage: and gate-to-gate gives some insight into what emissions
and removals occur under the control of the reporting
Percentage per CO2e per life cycle stage
= x 100 company. However, it is recognized that reporting gate-
life cycle stage Total CO2e inventory results
to-gate inventory results may jeopardize the reporting
company’s confidentiality. If this is the case, companies
As required in chapter 9, the virgin material displacement
may state this as a limitation to reporting these results
factor is reported separately from the inventory results
separately. For cradle-to-gate inventories, the total
by life cycle stage to avoid a negative percent impact in
inventory results are the cradle-to-gate results and
the end-of-life stage. The percentage impact of the virgin
therefore do not need to be repeated here.
material displacement can be reported next to the end-
of-life stage results as shown in the reporting template 11.3.2 Offsets and avoided emissions
(available at www.ghgprotocol.org). The virgin material As previously stated, offsets are emission credits (in the
displacement factor is included as part of the total form of emission trading or funding of emission-reduction
inventory results. projects) that a company purchases to offset the impact
of the studied product’s emissions. Companies typically
5. Separate reporting of biogenic and
purchase offsets for one of two reasons: to meet a
non-biogenic emissions and removals and
reduction goal that they cannot reach with reductions
land-use change impacts, when applicable
alone, or to claim a product as carbon neutral. Companies
Separate reporting of the total inventory result
are encouraged to set reduction targets and meet these
components provides transparency to the reporting
with absolute reductions. However if a company wishes to
company and their stakeholders.
purchase offsets for its product inventory, this standard
Biogenic emissions include CO2, CH4, and N2O that does allow for offsets to be reported separately from the
are produced as a result of the combustion and/or inventory results. For offsets to be reported separately in
degradation of biogenic materials, wastewater treatment, a product inventory, the company should:
and a variety of biological sources in soil and water. For
• Purchase offsets based on the GHG Protocol Project
example, if paper degrades in a landfill, the CO2 and CH4
Protocol or similar internationally accepted GHG
emitted would be classified as biogenic emissions. Non-
mitigation project accounting methodologies for
biogenic emissions include all GHG emissions from non-
quantifying the GHG benefits of climate change
biogenic (e.g., fossil-based) materials. Biogenic removals
mitigation projects; and
are due to the uptake of CO2 by biogenic materials during
• Clearly separate corporate-level and product-level
photosynthesis, while non-biogenic removals only occur
offset purchases to avoid double counting.
if CO2 is removed from the atmosphere by a non-biogenic
product during its production or use stage. Appendix B If a company purchases offsets to meet their corporate
provides guidance on calculating land-use change impacts. reduction goals, double counting can occur if the same
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![CHAPTeR 11 Calculating Inventory Results
offsets were reported in a product inventory. Similarly if
a company sells reductions that occur at sources included
DuPontTM
in the boundary for use as offsets, these should not be
DuPontTM Sorona® is an advanced polymer that
included in tracking performance towards their own
g u i d a n c e
contains 37 percent renewably sourced (e.g., biogenic)
reduction target. Companies should separately report any
ingredients by weight and can be used in place of
sold offsets from sources that they own or control that
traditional petrochemical polymers in a wide range
are part of the product boundary.
of applications such as fibers, fabrics, filaments, and
In this standard, avoided emissions are quantified as engineering resins. Because of the range of functions
emissions reductions that are indirectly caused by market and products Sorona® can be used for, DuPont
responses to the studied product or process that occurs performed a cradle-to-gate inventory. However, the
in the studied product’s life cycle. For example, consider resulting fate of the carbon in the molecule is an
a company that performs a GHG inventory on energy- important evaluation for any cradle-to-grave inventory
efficient appliances. Avoided emissions can be calculated that uses Sorona® as a material input. To ensure
by assuming that the energy-efficient appliances replace that downstream customers have all the necessary
non-efficient appliances in the market place. The company information to perform a cradle-to-grave assessment,
also installs an energy-efficient wood-fired boiler in the DuPont included in the inventory report the amount
production facility to reduce emissions. Avoided emissions of carbon (fossil and biogenic) contained within the
can be calculated by assuming that the use of the wood- product as it leaves the cradle-to-gate inventory
fired boiler reduces the demand for coal-fired power. boundary. DuPont also has information on the fate of
the contained carbon in different end-of-life scenarios
This standard does not allow avoided emissions to be
that they included in the inventory report separate
subtracted from the total inventory results. However,
from the cradle-to-gate inventory results as optional
companies may report avoided emissions separately
information to help downstream customers define
in the inventory report. Avoided emissions are often
their end-of-life profiles.
calculated using the consequential approach, which
among other things considers how emissions might
change as a result of a shift in demand (see chapter 5 for
more information). Companies calculating and reporting endnotes
avoided emissions should also consider any indirect 1 Emissions increases can also be indirectly caused by the studied
emissions caused by market responses to the studied product or process that occurs in the studied product’s life cycle
product or its life cycle. For example, indirect land-use and should also be reported separately with avoided emissions.
change impacts are a form of indirect impact that could
increase the GHG inventory of a product and should also
be reported separately if other avoided emissions are
considered. It is not appropriate to consider only the
emissions savings associated with indirect effects.
In LCA, the term avoided emissions is sometimes used
to describe allocation due to system expansion, or
emission reductions due to a reduction project within
the product’s boundary. These cases are not considered
avoided emissions as defined by this standard and
therefore are not required to be reported separately
from the inventory results. However, the requirements
for allocation (chapter 9) and performance tracking
(chapter 14) are applicable in these cases.
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![g e q d a rn ec m e n t s
r u i u i e
12.1 Introduction
A
ssurance is the level of confidence that the inventory results and report are
complete, accurate, consistent, transparent, relevant, and without material
misstatements. Obtaining assurance over the product inventory is valuable for
reporting companies and other stakeholders when making decisions using the inventory results.
Carefully and comprehensively documenting the inventory process in a data management plan
is a vital step in preparing for assurance.
12.2 Requirements
The product GHG inventory shall be assured party other than the reporting company performs
by a first or third party. the assurance, this is known as third party assurance.
Table 12.1 explains the differences between first and
Three key parties are involved in the assurance process: third party assurance.
1. The reporting company seeking assurance Both first and third party assurers should follow similar
procedures and processes. For external stakeholders,
2. Stakeholder users of the inventory report
third party assurance is likely to increase the credibility
3. The assurer(s) of the GHG inventory. However, first party assurance can
also provide confidence in the reliability of the inventory
When the reporting company also performs the
report, and can be a worthwhile learning experience for
assurance, this is known as first party assurance. When a
a company prior to commissioning third party assurance.
[93]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-95-2048.jpg)
![r e q u i r e m e n t s
Table [12.1] Types of assurance
Type of assurance Description Independence mechanism
First party assurance Person(s) from within the reporting Different lines of reporting
company but independent of the GHG
inventory determination process
conducts internal assurance.
Third party assurance Person(s) from an organization Different business entity from the
independent of the product GHG reporting company
inventory determination process
conducts third party assurance.
Inherently, assurance provided by a third party offers
Companies shall choose assurance a higher degree of objectivity and independence.
providers that are independent of, and Companies receiving first party assurance are required
have no conflict of interest with, the to report how potential conflicts of interests were
product GHG inventory process. avoided during the assurance process (see the assurance
statement reporting requirement below for more
information). Typical threats to independence may
Assurers are defined as person(s) providing assurance include financial and other conflicts of interest between
over the product inventory and shall be independent the reporting company and the assurer. These threats
of any involvement in the determination of the product should be assessed throughout the assurance process.
inventory or development of any declaration. Assurers
shall have no conflicts of interests, such that they can
Companies shall report the assurance
exercise objective and impartial judgment.
statement in the inventory report. The
statement shall include:
• Whether the assurance was performed
by a first or third party
• The level of assurance achieved (limited
or reasonable) including assurance
opinion or the critical review findings
• A summary of the assurance process
• The relevant competencies of
the assurers
• ow any potential conflicts of interest
H
were avoided for first party assurance
[94] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-96-2048.jpg)
![CHAPTeR 12 Assurance
r e q u i r e m e n t s
Competencies of assurers
Selecting a competent assurer (also known as an assurance The critical review process is intended to ensure
provider) is important for the assurance findings to have consistency between the product inventory and the
the credibility needed to support the reporting company’s principles and requirements of the Product Standard. It
business goals and stakeholder needs. is an established practice in life cycle assessment. The
critical review process ensures that:
A competent GHG inventory assurer has:
• Methods used to carry out the product inventory are
• Assurance expertise and experience using assurance
consistent with the Product Standard
frameworks
• Methods used to carry out the product inventory are
• Knowledge and experience in life cycle assessment
scientifically and technically valid
and/or GHG corporate accounting, as well as familiarity
• Data used are appropriate and reasonable for
with key steps in the product inventory process
public reporting
• Knowledge of the company’s activities and
• The inventory report and any conclusions based on the
industry sector
results are appropriate for GHG-only inventories
• Ability to assess the emission sources and the
• The inventory report is transparent and consistent
magnitude of potential errors, omissions and
misrepresentations There are two types of critical review: those performed
• Credibility, independence and professional skepticism by an internal or external expert, and those performed by
to challenge data and information a review panel of interested parties.
Assurance process For critical reviews conducted by a review panel, the
Achieving assurance over the product inventory results panel should be comprised of at least three members.
can be achieved through two methods: verification and The members may come from life cycle assessment
critical review. expert groups, government agencies, non-governmental
organizations, industry groups, and other companies.
Verification is an independent assessment of the
reliability of the product GHG inventory. Verification Levels of assurance
engagements, whether performed by a first or third In verification, the level of assurance refers to the
party, have common elements, including: degree of confidence that stakeholders can have over
the information in the inventory report. There are two
1. Planning and scoping (e.g., determine risks and
levels of assurance: limited and reasonable. The level
material misstatements)
of assurance requested by the reporting company will
2. Identifying emission sources determine the rigor of the verification process and
the amount of evidence required. The highest level of
3. Performing the assurance process (e.g., gathering
assurance that can be provided is a reasonable level of
evidence, performing analytics, etc.)
assurance. Absolute assurance is never provided as 100
4. Evaluating results percent of the inputs to the GHG Inventory are not tested
due to practicality and feasibility limitations.
5. Determining and reporting conclusions
The thoroughness with which the assurance evidence is
The nature and extent of verification procedures can vary
obtained is less rigorous in limited assurance. Table 12.2
depending on whether the verification engagement is
provides examples of limited and reasonable assurance
designed to obtain reasonable or limited assurance (as
opinions for an assertion of product inventory emissions.
described below). Verification of inventory data may take
place in several ways, for example by on-site checking,
reviewing calculations, mass balance calculations, or cross-
checks with other sources.
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![r e q u i r e m e n t s
Critical review findings
The critical review findings include whether the product For more information on critical review, companies should
inventory is in conformance with the Product Standard refer to the following texts:
and the methodological choices and assumptions made
1. ISO 14040, section 7
are reasonable for public reporting.
2. ISO 14044, section 6
3. The Society of Environmental Toxicology and
Chemistry’s (SETAC) Guidelines for Life Cycle
Assessment: A ‘Code of Practice’
Table [12.2] Examples of limited and reasonable assurance opinions
Assurance opinion Limited assurance Reasonable assurance
Nature of opinion Negative opinion Positive opinion
Example wording "Based on our review, we are not aware "In our opinion the reporting
of opinion of any material modifications that company’s assertion that the
should be made to the company’s inventory product’s emissions
assertion that the inventory product’s are 23 kilograms CO2e is fairly
emissions are 23 kilograms CO2e and stated, in all material respects,
are in conformance with the and is in conformance with
requirements of the GHG Protocol the GHG Protocol Product Life
Product Life Cycle Accounting and Cycle Accounting and Reporting
Reporting Standard.” Standard."
[96] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-98-2048.jpg)
![CHAPTeR 12 Assurance
12.3 Guidance
12.3.1 Benefits of assurance Qualitative misstatements tend to be those that have
Assuring product inventory results can provide a variety immaterial quantitative effects but could materially affect
of benefits, including: the reporting company’s emissions in the future as well
g u i d a n c e
as those that mislead the intended user.
• Increased confidence in the reported information on
which to base reduction targets and related decisions Uncertainty is a separate concept from materiality
• Enhanced internal accounting and reporting practices because it is not a known error, rather an indicator
(e.g., data collection, calculation, and internal of how well the data represents the processes in the
reporting systems), and facilitation of learning and product inventory.
knowledge transfer within the company
12.3.4 Preparing for assurance
• Increased confidence in the results by other companies
Preparing for assurance is a matter of ensuring that the
in the product’s life cycle that may use the results in
evidence that the assurer needs is easily accessible. The
their own inventories
type of evidence and documentation requested by the
• Improved efficiency in subsequent inventory update
assurer will depend on the subject matter, the industry,
processes and when undertaking inventories of other
and the type of assurance being sought. Maintaining
company products
documentation of the inventory process through the use
• Greater stakeholder trust in the reported information
of a data management plan (see Appendix C) is helpful for
12.3.2 Key concepts in assurance ensuring the assurance evidence is available.
In the assurance field many different terms are used to
Prior to starting the assurance process, the reporting
describe various assurance processes (e.g., verification,
company should ensure that the following are prepared
validation, quality assurance, quality control, audit, etc.).
and available to the assurer:
Though not comprehensive, table 12.3 includes many key
terms and concepts used in the assurance process. • The company’s written assertion (e.g., inventory
results);
12.3.3 Materiality
• The completed data management plan; and
A material misstatement occurs when individual
• Access to sufficient and appropriate evidence (i.e.,
or aggregate known errors, omissions and
invoices, bills of sale, etc.).
misrepresentations have a significant impact on the GHG
inventory results and could influence a user’s decisions. Timing of verification
Materiality has both quantitative and qualitative aspects. Verification is conducted before the public release of
The assurer and reporting company should determine the inventory report by the reporting company. This
an appropriate threshold or benchmark of materiality allows for material misstatements to be corrected
during the assurance process. prior to the release of the opinion (or revised opinion)
and assertion. The work should be initiated far enough
Quantitative materiality is typically calculated as a
in advance of the inventory report release so that it is
percentage of the inventory (in total or on an individual
useful in improving the inventory when applicable. The
line item basis). In determining the quantitative
period of the verification process is dependent on the
materiality benchmark, assurers should contemplate
nature and complexity of the subject matter and the
the risk of a potential misstatement and the history of
level of assurance.
previous misstatements. A materiality threshold (e.g., a
point at which a discrepancy becomes material) can be
pre-defined by the assurer.
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![g u i d a n c e
Table [12.3] Key assurance concepts
Assurance Description examples
concept
Assertion A statement by the reporting company • The studied product’s emissions
on the inventory results. The assertion is are 23 kilograms of CO2e. They are
presented to the assurer. calculated in accordance with the
Product Standard and supplemented
by our company-specific policies
and methodologies described in the
inventory report
Subject matter The inventory results and supporting • Inventory results
information included in the inventory • Other information presented in the
report. The type of assurance performed inventory report (See chapter 13 for
will determine which subject matter(s) more information on reporting)
should be assessed.
Criteria The benchmarks used to evaluate or • Requirements of the standard
measure the subject matter. • Methodological choices
• Data quality and uncertainty (assessed
for appropriateness for a public report)
• Others determined to be suitable by
the reporting company and assurer
Evidence Data sources and documentation used • Physical observations, such as site
to calculate emissions and support the tours to confirm the existence and
subject matter of the reporting company’s completeness of the sources
assertion. Evidence should be sufficient in • Assurer’s calculations
quantity and appropriate in quality. • Statements by independent parties
and/or the reporting company, such
as an interview with the production
manager about production capacity
• Documents prepared by an
independent party and/or the
reporting company, such as invoices
Assurance Standards, used by assurers, which set • ISO 14064-3 Specification with
standards requirements on how the assurance Guidance for the Validation and
process is performed. Verification of Greenhouse Gas
Assertions
Assurance The results of the assurer’s assessment • See table 12.2 for examples of limited
opinion of the reporting company’s assertion (i.e., and reasonable assurance opinions
inventory results). If the assurer determines
that a conclusion cannot be expressed, the
statement should cite the reason.
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![CHAPTeR 12 Assurance
Timing of the critical review process 12.3.6 Assurance statement
Critical review may be performed during the inventory The assurance statement conveys the assurer’s
process (known as an interactive review) or at the end conclusion about the inventory results, and it may take
(a posteriori). An interactive critical review may be useful different forms depending on whether the company is
g u i d a n c e
in correcting any problems with the inventory before conducting critical review or verification, as well as if the
the inventory’s completion, and it can reduce delays assurance was performed by a first or third party. The
in publishing the inventory report. A posteriori review required contents of an assurance statement are listed
allows the panel members to have a fresh perspective in the requirements section. An assurance statement
when reviewing the inventory results. It is important should also include the following:
that the critical review expert(s) remains objective and
Introduction
independent from the inventory development process
• A description of the studied product
during interactive reviews, and that the critical review
• A reference to the reporting company’s assertion
findings are based on the final product inventory report.
included in the inventory report
12.3.5 Assurance challenges • Description of assurance process
There are several challenges in assuring product • List of the assurance criteria
inventories. Emissions calculations rely on a mixture of • Description of the reporting company’s and
data sources and assumptions. Inventory uncertainty, assurer’s responsibilities
especially scenario uncertainty related to use and end- • The assurance standard or type of critical review
of-life stage emissions, may affect the quality of the process used to perform the assurance
inventory. It is important to consider the state of data • A summary of the work performed
collection systems and the integrity of the data and • The materiality threshold or benchmark, if set
methodological choices for assurance.
Conclusion
One of the primary challenges is that the majority of • Any additional details regarding the assurer’s
emission sources are usually outside the reporting conclusion, including details regarding any exceptions
company’s control and the assurer’s ability to obtain noted or issues encountered in performing the
sufficient appropriate evidence. assurance
• When there are material departures in the assertion
Three approaches to addressing this diminished
from the assurance criteria, the reporting company
control are:
should report the effect of the departures
1. Change the level of assurance i.e., reasonable to
limited (for verification)
endnotes
2. Change from verification to critical review 1 Adapted from ISO 14064:3:2006, Greenhouse gases - Part 3:
Specification with guidance for the validation and verification of
3. Rely on the assurance statement of another assurer greenhouse gas assertions.
for emission and removal sources outside of the 2 Adapted from the GHG Protocol Corporate Standard.
company’s control (i.e., assurance over a supplier’s 3 Adapted from ISO 14040:2006, Environmental Management –Life
emission sources by a different assurance firm) Cycle Assessment –Principles and framework.
4 Adapted from ISO 14044:2006, 6.1
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![g e q d a rn ec m e n t s
r u i u i e
13.1 Introduction
R
eporting is crucial to ensure accountability and effective engagement with
stakeholders. This chapter summarizes the various reporting requirements
specified in other chapters and identifies additional reporting considerations
that together provide a credible reporting framework and enable users of reported data
to make informed decisions. It is essential that the reported information is based on the key
accounting principles (relevance, accuracy, completeness, consistency, and transparency).
13.2 Requirements
Companies shall publicly report the • Additional GHGs included in the
following information to be in conformance inventory;
with the GHG Protocol Product Standard:
• ny product rules or sector-specific
A
guidance used;
General information and scope
• Inventory date and version;
• Contact information;
• For subsequent inventories, a link
• Studied product name and description;
to previous inventory reports and
• The unit of analysis and reference flow; description of any methodological
changes; and
• Type of inventory, cradle-to-grave or
cradle-to-gate; • A disclaimer stating the limitations
of various potential uses of the report
including product comparison.
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![r e q u i r e m e n t s
Boundary setting Uncertainty
• ife cycle stage definitions and
L • A qualitative statement on inventory
descriptions; uncertainty and methodological choices.
Methodological choices include:
• A process map including attributable
processes in the inventory; • Use and end-of-life profile;
• non-attributable processes included • Allocation methods, including allocation
in the inventory; due to recycling;
• excluded attributable processes • Source of global warming potential
and justification for their exclusion; (GWP) factors used;
• ustification of a cradle-to-gate
J • Calculation models.
boundary, when applicable;
• The time period; and Inventory results
• The method use to calculate land-use • The source and date of the GWP
change impacts, when applicable. factors used;
• Total inventory results in units of CO2e
Allocation per unit of analysis, which includes all
emissions and removals included in
• isclosure and justification of the
D
the boundary from biogenic sources,
methods used to avoid or perform
non-biogenic sources, and land-use
allocation due to co-products or
change impacts;
recycling; and
• Percentage of total inventory results by
• When using the closed loop
life cycle stage;
approximation method, any displaced
emissions and removals separately • iogenic and non-biogenic emissions and
B
from the end-of-life stage. removals separately when applicable;
• Land use impacts separately when
Data collection and quality applicable;
• or significant processes, a descriptive
F • Cradle-to-gate and gate-to-gate
statement on the data sources, data inventory results separately (or a clear
quality, and any efforts taken to improve statement that confidentiality is a
data quality. limitation to providing this information);
• The amount of carbon contained in the
product or its components that is not
released to the atmosphere during waste
treatment, when applicable; and
• For cradle-to-gate inventories, the
amount of carbon contained in the
intermediate product.
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![CHAPTeR 13 Reporting
r e q u i r e m e n t s
Assurance Setting reduction targets and tracking
inventory changes
The assurance statement including:
Companies that report a reduction target
• Whether the assurance was performed
and/or track performance over time shall
by a first or third party;
report the following:
• Level of assurance achieved (limited or
• The base inventory and current inventory
reasonable) and assurance opinion or the
results in the updated inventory report;
critical review findings;
• The reduction target, if established;
• A summary of the assurance process;
• Changes made to the inventory, if the
• The relevant competencies of the
base inventory was recalculated;
assurance providers; and
• The threshold used to determine when
• An explanation of how any potential
recalculation is needed;
conflicts of interest were avoided for
first party assurance. • Appropriate context identifying and
describing significant changes that
trigger base inventory recalculation;
• The change in inventory results as a
percentage change over time between
the two inventories on the unit of
analysis basis; and
• An explanation of the steps taken
to reduce emissions based on the
inventory results.
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![g u i d a n c e
13.3 Guidance
13.3.1 Goal of public reporting included, and a reporting template is provided at
The overarching goal of producing a GHG inventory in (www.ghgprotocol.org) to help companies organize
conformance with the GHG Protocol Product Standard is to their inventory report.
create positive drivers to pursue GHG emission reductions
13.3.2 Identifying the audience
across the product life cycle. The full process from
Keeping the audience in mind is important right from
developing the inventory to reporting results is designed to
the start as companies set objectives and develop an
help improve the understanding of reduction opportunities
inventory. A key opportunity to make a meaningful
as well as facilitate and leverage inputs from stakeholders
connection with the audience is when a company
to prioritize and reduce emissions. Identifying target
prepares their inventory report. Helping users understand
audience and specific business goals is the first step and
the purpose, context, and rationale behind various
reporting is the final step to achieving this goal.
accounting decisions as well as the limitations and
The following sections provide guidance on potential uses of the inventory results are examples of
understanding the audience and completing some of objectives that a company should seek to address in the
the reporting requirements not included elsewhere in inventory report.
the standard1. A list of optional reporting elements is
Table [13.1] Potential audiences of a publicly disclosed product GHG inventory report
Audience category/role Audience description
General public Lay person. No understanding or prior experience with LCA/GHG
inventories may be assumed.
GHG inventory / LCA practitioner Practitioner wishing to use the inventory results as data inputs to
another study.
Assurance provider Assurer performing assurance on the inventory.
Report partners Employees, suppliers, product-owning organization, report-
commissioning organization.
Sustainability / environmental General interested party seeking to understand more about a specific
practitioner product, a product sector, an industry sector, or other aspects of life
cycle emissions and removals.
Green purchasing Purchasing decision-maker seeking differentiation across products.
Downstream customers Retail decision-maker making purchase decisions that may use the
inventory results.
Environmental/carbon/ GHG programs that may provide a platform to report, register, and
GHG labeling organizations disseminate inventory results.
Policy makers and government Government stakeholders that may use the inventory results to plan
program administrators future programs and policies.
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![CHAPTeR 13 Reporting
Box [13.1] Example disclaimer
It is important to recognize that public disclosure does
not mean there is one homogenous audience with a
The results presented in this report are unique to the
uniform set of requirements. Table 13.1 lists distinct
g u i d a n c e
assumptions and practices of company X. The results
audiences for a product GHG inventory report, and
are not meant as a platform for comparability to other
identifies how the reporting requirements can help
companies and/or products. Even for similar products,
address their needs. This is not an inclusive list as other
differences in unit of analysis, use and end-of-life stage
audiences not identified here may still find value in
profiles, and data quality may produce incomparable
reports produced following the reporting requirements
results. The reader may refer to the GHG Protocol
in the Product Standard.
Product Life Cycle Accounting and Reporting Standard
13.3.3 Disclaimer (www.ghgprotocol.org) for a glossary and additional
Providing a disclaimer ensures that readers understand the insight into the GHG inventory process.
scope and intended purpose of the inventory results and
are aware of any limitations. (See box 13.1 for an example.)
13.3.4 Use of results
The audience of the public report may be most
interested in what the company is doing, or plans to
do, to reduce the GHG emissions associated with the
product as a result of the inventory. Additionally, the
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![g u i d a n c e
audience may be interested in what they can do, as a • A summary of reductions or increases based on a
user or consumer of the product, to reduce their impact previous inventory, highlighting the most effective
on the inventory. Therefore, a company should inform initiatives or the reasons why emissions have increased.
its stakeholders of the steps it plans to implement as
Increases in emissions over the reduction-reporting period
well as measures its customers or users can implement,
should be reported with a clear indication that the figure
in order to reduce emissions based on the inventory
represents an increase rather than a reduction. A minus
results. If this is a subsequent report, a company should
sign should not be used as this may confuse the audience.
also provide an overview of any reductions achieved.
This should be brief and highlight key initiatives or A key step in completing the report is to review the
results. Examples include: purposes and context of the study and summarize the
overall conclusions that can be drawn from the inventory.
• A plan to focus reductions around a few key emission
This step involves evaluating key accounting choices
sources;
exercised in developing the inventory and providing a
• Information on how users/consumers can reduce key
perspective on the significance and limitations in the
emission sources ( e.g., reuse, following manufacturer
product life cycle study. Companies should also clarify
use instructions, purchasing green power, etc.); and/or
the purposes that the study sought to fulfill and the
decisions that were outside its purview.
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![CHAPTeR 13 Reporting
13.3.5 Optional reporting
In addition to required elements, a company should • Weighting factors for delayed emissions
consider reporting on elements that meet the needs • Information on offsets that have been purchased
of its potential audience, its specific business goals, or or developed outside the inventory boundary and
g u i d a n c e
the requirements of product rules and sector guideline reported separately from the inventory results. This
developed in conformance with the Product Standard. information should:
These elements may be added to the public report or • Disaggregate offsets by emissions reductions and/
made available upon request and may include: or removals
• Specify the types of offset project/s
• Business goals met by performing a GHG inventory
• Specify geographical and organizational origin
• Additional background information on inventory
• Specify how offsets have been quantified
results and how they are calculated
• Specify how double counting of offsets has
• Additional disclaimers around proper use of results
been avoided
SKU, NAICS code, UNSPSC code or other unique
• Specify whether they have been certified
product/service identifier
or recognized by an external GHG program
• Additional details around why a particular unit of
(e.g., the Clean Development Mechanism) and
analysis was chosen
• Specify whether and to what extent purchased
• The country(ies) where the raw material acquisition,
offsets were used to meet reduction targets
production, and distribution stages occur
(if established)
• Information on data collected from suppliers,
• Information on any reductions sold as offsets from
including:
sources within the inventory boundary that are owned
• Percent engagement from supplier surveys
or controlled by the reporting company
• Data collection techniques and sources
• Avoided emissions and/or emissions caused by sources
• Quantitative uncertainty assessments
outside the inventory boundary reported separately
• Data for other GHGs that may be relevant to the
from the inventory results
studied product
• Other emissions or removals calculated by
• Inventory results using a 20 or 500 year GWP factor
consequential modeling reported separately from
or other impact assessment metrics such as global
the inventory results
temperate potential (GTP)
• Additional guidance on how the results should be
• If the functional unit and subsequent inventory
interpreted and used
results are applicable to multiple product varieties
• Detailed reduction plans for future inventories
(e.g., different flavors or colors), information on those
• A summary and explanation of any increase in
varieties
emissions or decrease in removals since the last
• Indirect land-use change impacts reported separately
inventory, including what plans the company has to
from the inventory results
achieve inventory reductions in the future
• Additional disaggregation of GHG impacts.
Examples include:
• CO2e emissions reported as a fraction of all GHG endnote
components (i.e., grams of CO2, N2O, CH4, etc.) 1 More information on reporting outputs from a specific inventory
• For specific attributable processes or material, step are included in their respective chapters.
energy and service inputs, such as product
packaging
• The sum of transportation occurring throughout
the life cycle
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![g e q d a rn ec m e n t s
r u i u i e
14.1 Introduction
T
his standard is designed to help improve the quality and consistency of product
inventories and public reporting with the ultimate goal of helping companies and
other stakeholders reduce emissions of the products they design, manufacture, sell,
purchase, and use. This step in the inventory process allows companies to set and meet
reduction targets by consistently and accurately tracking inventory changes and identifying
reduction opportunities.
14.2 Requirements
To set reduction targets and track inventory changes over time, companies shall:
• Develop and report a base inventory that • Complete and disclose an updated
conforms with the requirements of this inventory report including the updated
standard; results, the base inventory results, and
the context for significant changes; and
• Recalculate the base inventory when
significant changes in the inventory • Use a consistent unit of analysis to enable
methodology occur and report those comparison and track performance over time.
changes;
Companies can publicly report a GHG inventory in
conformance with the Product Standard without setting a
reduction target and tracking inventory changes. However,
companies that do set reduction targets and track
inventory changes shall abide by these requirements.
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![g u i d a n c e
14.3 Guidance
14.3.1 Steps for setting reduction targets and 6. Complete and disclose an updated inventory report
tracking changes including the updated results and the base inventory
Setting reduction targets and tracking changes involves results. Companies should report the inventory results
the following steps: as a percentage change over time on the unit of
analysis basis.
1. Complete and report a base inventory done in
conformance with the requirements of this standard. The following section describes each step in more detail.
2. Identify reduction opportunities. Step 1: Complete and report a base inventory
The first step is to ensure that a base inventory has been
3. Set a reduction target.
completed and publically reported in conformance with
4. Achieve reductions and account for these by this standard. The base inventory does not have to be
performing an updated inventory. the first inventory a company performs on a product; for
example, companies may want to improve data quality
5. Recalculate the base inventory as needed when
before finalizing the base inventory. Once a company has
significant changes in the inventory occur, including,
identified the base inventory, however, any changes made
but not limited to: changes in the product’s boundary;
that warrant a recalculation should be done following the
quality of data; and allocation or recycling methods.
guidance in step 5.
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![CHAPTeR 14 Setting Reduction Targets and Tracking Inventory Changes
Step 2: Identify reduction opportunities
Companies can begin identifying potential emissions comparing inventories over time. This means that if an
reduction opportunities along the product’s life cycle improvement made along the product’s life cycle changes
while creating the base inventory. These opportunities its unit of analysis, then a new inventory is completed and
g u i d a n c e
can then be assessed based on the magnitude of the the company needs to redefine the base inventory and
reductions and the company’s level of influence. In reduction goal based on the new unit of analysis.
general, companies have the largest influence on
Step 4: Achieve and account for reductions
processes they control and therefore, a first step may be
Companies may achieve reductions in different ways, such
to identify energy savings or fuel switching opportunities
as working within the company to improve the processing
within those processes.
or design of the product or engaging with customers
In many cases the largest potential for improvement and suppliers. For the latter, the first step is to set up a
comes from processes that are under the control of strategy for supplier and customer engagement (See
suppliers and customers along the product’s life cycle. www.ghgprotocol.org for further guidance). Companies
To address these emissions, companies should identify should work with partners along the product’s life cycle
suppliers and customers to engage with, based on both to identify emissions reduction opportunities. This may
their level of influence and reduction potential. For use include working with a supplier to help them manage
and end-of-life processes, the company may determine and reduce their corporate (scope 1, 2, and 3) emissions.
that improvements are influenced primarily by the design Other opportunities can include working with suppliers
of a product and less by the behaviors of customers. In to come up with substitute materials that are less GHG
this case, companies should engage their product design intensive during production and/or reduce GHG impacts
or research and development team. further upstream (e.g., a lighter car panel that reduces
fuel use in the product use stage).
Step 3: Set a reduction target
A robust business strategy often includes setting To account for reductions in emissions, companies
targets for revenues, sales, and other core business are referred to the data collection requirements of
indicators, as well as tracking performance against this standard (chapter 8). Any reductions should be
those targets. Likewise, although performance tracking assessed using collected direct measurement data,
a GHG product inventory over time can be done without activity data, or emission factors that abide by the
a reduction target, effective GHG management involves attributional approach of the standard (i.e., historical,
setting a GHG target. fact-based, and measurable) and have occurred prior
to the updated inventory.
Companies should set a reduction target for the total
product’s life cycle to avoid the perception of cherry-
picking. In addition companies may also set individual Box [14.1] Trade-offs between environmental impacts
targets for stages or processes. A target should include
both a completion date and a target level - the numeric
One limitation of a GHG product inventory is that it
value of the reduction target per unit of analysis (e.g.,
focuses on a single environmental impact. Before
20 percent reduction). In general, companies should set
making a decision to reduce GHG emissions by
an ambitious target that reaches significantly beyond
making changes in the product life cycle, companies
business-as-usual. “Stretch goals” tend to drive greater
should consider whether any environmental trade-
innovation and are seen as most credible by stakeholders.
offs could occur as a result of that change - for
It is important to note that all reduction targets set for example, switching from a GHG intensive processing
a product inventory are made on the basis of the unit step to one that uses more water resources.
of analysis, and the unit of analysis cannot change when
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![g u i d a n c e
Step 5: Recalculate the base inventory Step 6: Update the inventory report
Overtime, changes and improvements may occur Once reductions have occurred, new data has been
to activity data, emission factors1, data quality, and collected, and the base inventory has been recalculated
methodologies. When such parameter or methodological (if needed), the inventory report should be updated to
changes influence the results of the base inventory, include results from both the new and base inventories.
the base inventory should be recalculated to ensure The updated inventory report must meet the requirements
comparability of emissions information over time. These of the reporting chapter and include the same reporting
changes may include redefining attributable processes, elements as the base inventory. The introduction should
collecting higher quality data, or changing allocation or be updated to reflect the purpose of the update including
recycling methodologies. As required above, any changes the reduction target, and any information that has changed
made that warrant recalculation of the base inventory are since the base inventory should be clearly noted. The
reported in the updated inventory report. number of updated inventory reports for the studied
product should be reported, with a link to previous reports
Before recalculating a base year inventory, companies
as available. If the base inventory is recalculated, all changes
should develop a recalculation policy to clearly articulate
are listed. If the base inventory was not recalculated,
the basis and context for any recalculation. Companies are
companies are required to report the threshold under
required as part of reporting (see chapter 13) to disclose
which no recalculation was warranted. In either case, both
the threshold for insignificance above which a change
the base inventory results and the updated results are
warrants recalculation. For example, if a new emission
included in the updated inventory.
factor is published that when used has a one percent
impact on the inventory results, a company may decide In addition to the base inventory reporting requirements,
that is below the threshold and opt not to recalculate companies should report a reduction percentage by
the base inventory. If a threshold for insignificance was taking the difference between the base inventory and the
already established for justified exclusions (see chapter 7) new inventory divided by the base inventory.
then the same threshold should be used here.
In the case that GHG emissions have actually increased
If a change is made that causes the unit of analysis to be since the last inventory, companies should report these
redefined, the base inventory cannot be recalculated. In results, adding an explanation for their stakeholders as to
this case, companies need to create a new base inventory why the emissions increased and what plans the company
and set a new reduction target. has to reduce this value in the future.
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![CHAPTeR 14 Setting Reduction Targets and Tracking Inventory Changes
14.3.2 Using offsets to achieve reduction targets It is important to ensure the offsets used to meet a
Companies should strive to achieve their reduction reduction target are based on credible accounting
targets entirely from emission sources within the standards. In addition, companies should ensure steps to
inventory boundary. If the company is unable to meet avoid double counting of reductions by multiple entities
g u i d a n c e
the target through those reductions, it can use offsets or in multiple targets. For example, if a company sells
that are generated from sources external to its inventory offsets that occur at sources included in its inventory
boundary. Any purchased, sold, or banked offsets relevant boundary, these reductions should not be included in
to the inventory results are subject to the same reporting tracking performance towards a reduction target that is
requirements as defined in chapter 13 and therefore are applicable to the same sources.
reported separately from the inventory results.
For additional guidance on using offsets that are based
Although the inventory results are presented on a unit of on credible accounting methodologies and standards
analysis basis, companies that purchase offsets for their see GHG Protocol Guideline for Project Accounting and
products should do so for all products sold in a particular to avoid double counting in achieving targets see the
time frame (e.g., a year). For example, a company Corporate Standard (chapter 11, pp 81-83).
produces a million products a year at 50 kg CO2e per unit
of analysis. To meet a zero-carbon reduction target for
this product, the company needs to purchase 50,000 endnote
tons of offsets each year. In this case, the company would 1 If a change in emission factor represents an actual change in
report the inventory results per unit of analysis and the emissions, then the base inventory does not need to be updated.
total amount of products that are offset over the selected However, if an emission factor is updated to be more complete or
have less uncertainty, this may warrant a base inventory recalculation.
time frame. Companies should also disclose information
on the credibility of the offset, including:
• The type of project
• Geographical and organizational origin
• How offsets have been quantified
• How double counting of offsets has been avoided
• Whether the offsets have been certified or recognized
by external programs
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![Appendix A. Guidance on Product Comparison
T
he quantification of GHG emissions and removals across a product’s life cycle is complex
and the results are highly dependent on methodological choices and assumptions. Valid
product comparison requires the use of equivalent methodologies that minimize the
methodological variability. In order to compare products on a fair and valid basis, companies
need to supplement use of the Product Standard.
As stated in chapter 1, this standard is intended to support comparison, and table A.2 illustrates the applicability of
performance tracking of one product over time. For this standard for each comparison type.
other types of product comparison – including consumer
For companies and stakeholders that choose to
and business purchasing decisions, product labels, and
perform product comparison, the following additional
performance claims – additional specifications are needed.
specifications are recommended.
Claims regarding the overall environmental superiority or
equivalence of one product versus a competing product, Performance tracking:
referred to in ISO 14044 as comparative assertions, are • The unit of analysis should be identical
not supported by the Product Standard. Table A.1 provides • If the parameters and methodologies change, the
descriptions and examples of types of product previous inventory shall be adjusted to permit
comparison on the same basis
Table [A.1] Types of comparisons that can be made using a product GHG inventory
Comparison type Description example
Performance tracking Comparing the performance of the same Product X emits 8 lbs. of CO2e per unit
product over time. of analysis in 2010 compared with a
2005 base inventory of 10 lbs. CO2e
per unit of analysis, demonstrating a
20-percent improvement.
Consumer and business A consumer or business changes A retailer increases milk purchases from
purchasing decisions purchasing habits based on the GHG the milk producer with the lowest GHG
performance of one product compared product inventory.
with a competing product.
Product labels A label printed on a product making a A label on a bag of popcorn states the
claim (either quantitative or qualitative) product GHG emissions are 7 grams.
about the life cycle performance of
the product.
Performance claims Advertising the GHG benefits of a A consumer group advertises on
product by the company performing their website a list of products they
the inventory or a third party. claim emit less GHG emissions than
competing products.
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![Table [A.2] The use of Product Standard for product comparisons
Supported by the Product Supported by the Product Standard with additional GHG
Standard “as-is” program specifications or product specific guidance
Performance tracking
Consumer and business purchasing decisions
Product labels
Performance claims
See chapter 14 for more information on performance A.1 Role of product rules
tracking and setting reduction targets. Product rules provide additional specifications that enable
valid comparisons of two or more products. Product rules
Consumer and business purchasing decisions, quantitative
may vary in quality. When developing a new product
product labeling, and performance claims:
rule or evaluating the quality of an existing product rule
• The unit of analysis should be identical
before use, criteria to consider include whether:
• The system boundaries and temporal boundary should
be equivalent • The rule is developed by a diverse group of
• The same allocation methods should be used for stakeholders with relevant subject matter expertise
similar processes • The rule is peer-reviewed by qualified experts
• The data types used and the data quality and • There are safeguards in place to prevent conflict
uncertainty of data should be reported and assessed to of interest
determine if a fair comparison can be made • The rules apply internationally so they can be adopted
• The temporal and geographical representativeness of by other programs and policies
the inventories should be assessed to determine if a • A policy is in place to determine when product rules
fair comparison can be made are updated
• Third party assurance should be performed
ISO labels and declarations: endnotes
• Environmental Labels (Type I) , Self-declared
1 1 International Organization for Standardization, ISO 14024:1999,
Environmental Claims (Type II)2, Environmental Product Environmental labels and declarations -- Type I environmental
Declarations (Type III)3, and comparative assertions4 labeling -- Principles and procedures. Geneva.
2 International Organization for Standardization, ISO 14021:1999,
should meet the accounting and communication
Environmental labels and declarations -- Self-declared
requirements of the respective standards
environmental claims (Type II environmental labeling). Geneva.
3 International Organization for Standardization, ISO 14025:2006,
Environmental labels and declarations -- Type III environmental
declarations -- Principles and procedures. Geneva.
4 International Organization for Standardization, ISO 14044:2006,
Life Cycle Assessment: Requirements and Guidelines.
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![Appendices
Appendix B. Land-Use Change Impacts
T
his appendix provides guidance on identifying when land-use change impacts are
attributable to the studied product. If they are attributable, guidance is also included
for calculating and allocating those impacts.1
For studied products whose life cycle includes biogenic Box [B.1] Key concepts in land-use impacts
materials (materials produced by living organisms
or biological processes, not fossilized or from fossil
Carbon stock refers to the total amount of carbon
sources), attributable processes associated with those
stored on a plot of land at any given time in one or
materials include emissions and removals associated
more of the following carbon pools: biomass (above
with agricultural and forestry practices such as growth,
and below ground), dead organic matter (dead wood
fertilizer application, cultivation, and harvesting. In
and litter), and soil organic matter.4 A change in carbon
addition to these agricultural and forestry practices,
stock can refer to additional carbon storage within
land-use change impacts may be attributable to a studied
a pool, the removal of CO2 from the atmosphere
product’s material acquisition and preprocessing stage.
to the carbon stock, or the emission of CO2 to the
Land-use change impacts2 include the following: atmosphere from the carbon stock.
• Biogenic CO2 emissions and removals due to carbon Land-use change occurs when the demand for a
stock change occurring as a results of land conversion specific land use results in a change in carbon stocks
within or between land-use categories on that land. A change in carbon stock can occur from
• Biogenic and non-biogenic CO2, N2O, and CH4 one land-use category to another (e.g., converting
emissions resulting from the preparation of converted forest to cropland) or within a land-use category (e.g.,
land, such as biomass burning or liming3 converting a natural forest to a managed forest or
converting agricultural land from till to no-till). Land-
This appendix provides guidance for two situations: when
use change does not include changes in crop cover or
the specific land that the product or product component
crop rotations that occur within the cropland category
originates from is known, and when it is not. The
or forest harvesting and regeneration into the same
concepts of assessment period, amortization period, and
general forest type, for which the regenerated forest
distribution of impacts are used across both situations.
is expected to have comparable carbon stocks to the
It is important to note that while this appendix focuses harvested forest. Land-use categories include forest
on agricultural and forest products, significant land-use land, cropland, grassland, wetlands, settlements, and
change impacts are not limited to biogenic products. other lands such as bare soil, rock, ice, etc.5
Any company with a studied product that uses a large
Land-use change impacts are the emissions and
amount of land, such as a new settlement, should
removals due to land-use change.
use this guidance to determine whether the land use
changed within the assessment period and whether
that had any impact on the area’s carbon stocks.
As referenced in chapter 7, companies are required to
disclose the method used to calculate land-use change
impacts in the inventory report.
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![B.1 When the specific land is known
B.1.1 Determining attributable land-use impacts B.1.2 Calculating land-use change impacts
Land-use impacts are attributable to a product if the When information about the specific land is available,
following are true: collecting data for land-use change impacts follows
the same data collection and quality requirements
• The carbon stock change is the direct result of
given in chapter 8 of this standard. For example, if the
extraction or production of biogenic material to create
reporting company owns the land from which a product is
a product
harvested, primary data are required. Primary data from a
• The carbon stock change was caused by human
supplier is preferred for land not owned by the reporting
intervention with the intent of creating a product
company. These types of data are collected directly from
• The carbon stock change occurred within the
the production site, with actual areas and the mass or
assessment period – 20 years or a single harvest period
volume of inputs used.
from the extraction (e.g., harvesting) of a biogenic
product or product component, whichever timeframe Even with primary data from the production site, it is
is longer unlikely that primary data is available for the measurement
of carbon stock changes and emissions from soils. In some
exAMPLeS
cases secondary data is available in peer-reviewed journals;
1. A product is made from an annual crop that was
otherwise, common sources include:
harvested in 2010. The crop is from a plot of land
where the last known carbon stock change occurred 50 • Sector-specific activity data/emission factors: These
years ago. In this case no land-use change impacts are data are usually provided by associations, cooperatives,
attributable to the product. and institutes representing a particular sector. It can
include aggregate activity data/emissions from site-
2. A product is made from wood that is extracted from a
specific sources.
naturally grown forest (extraction and production occur
• Country-specific activity data/emission factors:
in the same year). If the extraction of above-ground
Information that reflects country-specific biomes,
biomass causes a change in carbon stock of the land,
agricultural practices, climate conditions, soil types,
the impacts of the land-use change are attributable to
vegetation groups, etc. This can be further broken
the product.6
down into regional data. This type of information can
3. A product is made from wood that is grown on a be found in national greenhouse gas inventories and
plantation. The wood takes 28 years to grow, and is other official government publications, as well as from
harvested in 2010 from a plot of land that was converted country experts.
from a natural growth forest in 1982. Because the • Generic activity data/emission factors: These are
length of the harvest cycle is longer than 20 years, the default values provided by the IPCC8, FAOSTAT9, etc.
company must consider any carbon stock changes that These data refer to broad categories, such as high
may have occurred up to 28 years ago (from 2010 to activity clay soils and tropical rainforest, and usually
1982). Therefore, the impacts of the land-use change (i.e., include carbon stock change impacts as well as land-
the original clearing of the natural growth forest) are use change practice emissions within the default
attributable to the product. emission factor.
4. A product is made from a bi-annual crop that was Figure B.1 is a simplified illustration to show how carbon
harvested in 2010. The plot of land used to grow the crop stock information can be used to calculate land-use
was converted from forest in 2000 due to a naturally change impacts. In this example, forest land is converted
occurring fire.7 Because the carbon stock change was into cropland, creating a 150-ton release of carbon due
not caused by human intervention with the intent of to the change in carbon stock. If several carbon stock
creating a product, the land-use change impacts are not changes occur within the assessment period, then the
attributable to the product. overall impact of all changes must be considered. If
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![Appendix B. Land-Use Change Impacts
Figure [B.1] Simplified illustration of a carbon stock change calculation
200 tons C 50stock tons C
total carbon
stock change
150
forest stock crop
20 years (or length of harvest) tons C
wood is harvested from a forest that is not converted companies to delay inventory reporting in an effort to
(forest remaining forest), a carbon stock change can reduce land-use change impacts. It is recognized that
be calculated based on the change in forest density. applying any time period to amortize emissions creates
To complete the land-use change impact calculation, an arbitrary cut off after which companies are free to
companies need to consider what emissions may have grow products on the land without a land-use change
occurred as a result of the carbon stock or land-use burden. However, identifying no time period would create
change unless these are already included in the default additional uncertainties and inconsistent inventories.
emission factors.
There are several ways a company may distribute land-use
B.1.3 Distribution of land-use change impacts change impacts using the amortization period depending
Once land-use change impacts are deemed attributable on the harvested product:
and impacts are identified, a company needs to distribute
1. For an annually harvested crop, a company applies
those impacts between the studied product and other
1/20th of the impacts to the products produced from
co-products that are outputs of the land. This is because,
each yearly harvest
in most cases, land-use change occurs on land that
produces products over many years, and therefore it is 2. For a semi-annual crop or herbaceous plant, a company
not appropriate to apply all the land-use change impacts may estimate the production of the land over 20 years
to the first products generated within the area. Using the and then apply the impacts to each ton of harvested
example from figure B.1 above, a company has calculated biomass
a carbon stock change associated with the product (in this
3. For biomass with an extended harvest period (greater
example, a crop) of 150 tons. The next question is how
than 20 years) or where additional cultivation of the
to distribute those emissions to the products that are
land is not planned, all of the land-use change impacts
harvested from that land. Figure B.2 illustrates three ways
are applied to the harvested products from the first
land-use change impacts can be distributed over time:
harvest period
A) single year, B) 20 year constant, or C) 20 year decline.
Methods 1 and 2 can be used for both annual and semi-
In this standard, land-use change impacts are distributed
annual crops depending on the preference of
using option B: evenly over an amortization period of
the company.
either 20 years or the length of one harvest (whichever
is longer). This option was chosen as the most consistent B.1.4 Forestry and wood products
way to distribute impacts for use in a GHG inventory, Some forest products are grown on managed forest
as both option A and option C create an incentive for plantations that are harvested over relatively short time
[119]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-121-2048.jpg)
![Figure [B.2] Distributing GHG impacts over a 20 year time period
single year 20 year constant 20 year decline
100 100 100
Option A Option B Option C
GHG Distribution (%)
C allocation (%)
0.0 0.0 0.0
time time time
Source: Zaks, D.P.M., C. C. Barford, N. Ramankutty and J. A. Foley, “Producer and consumer responsibility for greenhouse gas emissions from
agricultural production –a perspective from the Brazilian Amazon.”Environmental Research Letters. 4 (2009).
frames, while others may be extracted from natural period. Consider an example in which a stock change of
forests that take over 100 years to grow. Some forests 150 tons of carbon is calculated with an initial harvest of
are removed with the intent of producing annual crops, 100 tons of wood and an annual harvest of 1 ton of crop for
while others are removed for the stock of wood that the remaining 19 years of the amortization period. This means
can be extracted at the time of removal. Depending that 150 tons of carbon are distributed among 119 tons
on the type of product or wood being studied and the of products. The additional impacts of land-use change (e.g.,
location where that wood is cultivated, vastly different liming applications) may also need to be distributed. This
harvesting techniques occur which have a significant scenario is only applicable when the converted land is managed
effect on the amount and distribution of land-use change and the production of that land is known. In this context,
impacts. Furthermore, co-product allocation (as defined managed refers to land that is continuously maintained for the
in chapter 9) may be needed during land-use change if purpose of cultivating and harvesting a product. Distribution
the converted land also produces biogenic co-products. is not applicable for forest land that has been harvested and
If the studied product is a crop but the land-use change replanted but is not maintained, or for a plot that is replanted
event created a co-product of wood, a company needs and managed but with an extensive harvest period (greater
to accurately allocate these emissions. The following than 50 years). In both cases the uncertainty associated with
scenarios provide some insight into the correct the eventual production of the replanted product makes it
distribution and allocation10 of land-use impacts due to most accurate to apply all land-use change impacts to the first
forest and wood products. harvest of wood.
Scenario A: A forest is harvested for wood Scenario C: A forest is converted to another land category
but the land is not converted into another category and the wood is not harvested into a co-product.
or the future use of the land is unknown.
In this scenario, a company may not allocate any land-use
In this scenario, any stock change that is calculated based on
change impacts to the wood as it was not used to create
the density change of the forest is attributable to the products
a co-product. All land-use change impacts (including the
created from the harvested wood. No distribution is needed
burning of the wood not recovered) must be distributed to
because additional growth is not planned, or is unknown.
the product produced on the converted land. If a company
Scenario B: A forest is harvested for wood then does not have data that justifies the use of scenario B (i.e.,
converted into another managed land category. proof that the wood was harvested and used for a product)
In this scenario, land-use change impacts should be distributed then scenario C is used.
to all products produced by the land within the amortization
[120] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-122-2048.jpg)
![Appendix B. Land-Use Change Impacts
B.2 W
hen the specific land use is unknown
When a company has limited information on the specific to their product. While these methods may be the most
land from which the product or product components accurate, they are often complex, time consuming, and
are extracted or harvested, it can be difficult to not freely available. Additionally, they may not provide an
determine how to attribute or distribute impacts. accurate representation for some countries. If a company
This situation occurs when a company buys crops or has access to these tools they are encouraged to use
biomass from a supplier who receives indistinguishable them to determine land-use change impacts as long as
shipments from a wide range of land-based sources. the modeled results are justified and transparent.
Under such circumstances, primary data are not
When a company does not have access to models or
available and secondary data are used to calculate stock
imaging data, it may use average statistics to estimate
changes and determine how much land-use change
land-use change impacts. For example, companies may
impacts should be distributed to a product.
use the agricultural or forestry statistic for the assumed
The first step in estimating land-use changes impacts location to determine the change in land occupation
is to determine in what location the crops or biomass for the studied product versus the total land change
were likely grown. If the crop or biomass is grown only in that location. The following example shows the
in certain locations due to climates and soil types, those steps companies can follow to use agricultural data
locations should be used. If the crop or biomass is grown to determine whether land-use change has occurred.
in many locations, a company may choose the largest The same technique may be used for managed wood
producing location or the most likely location (e.g., due products using forestry data. If the crop or biomass that
to proximity to the production facility). Companies are is being studied is shown to occupy less land over the
encouraged to perform scenario uncertainty if more than 20-year assessment period, the company can assume that
one location is plausible. Companies may also take an no land-use change has taken place. If the amount of
average of locations if data are available to support that land occupied by the crop or biomass being studied has
calculation (e.g., all locations have carbon stock change increased, then land-use change impacts are attributable.
data available). Once the location has been determined, In this case the company needs to assume what the
companies may use the following data to estimate the original land category was. This should be based on the
carbon stock and land-use change impacts: type of land present in the assumed location and when
more than one land type is possible the conservative
• Land-use imaging and/or agricultural demand-
choice should be made.
based models
• Average data, including: It is important to note that any assumptions made
• International statistics about land-use change impacts are only estimations
• Country- or region-specific statistical databases and subject to much uncertainty. Because these
• Statistical yearbooks estimation techniques cannot identify when the land-
use change occurs, companies should always assume
Land-use imaging and/or agricultural demand-based
1/20th of the land-use change impact, as shown in
models include using remote sensing11 or GIS data to
the following examples. Companies may also choose
estimate land-use change in a particular location or
not to make any assumptions about land-use change
market-based models12 to estimate land-use change
and only use the worst case scenario (e.g., all land is
based on the market trends of a crop or wood product.
converted from the most carbon rich land category).
For example, if the studied product is a crop assumed to
Information on the methods used to determine
be produced in New Zealand, and satellite imagery shows
land-use change impacts should be included in the
that land use for that crop has remained constant in New
inventory report for transparency.
Zealand for the past 20 years, then the company can
assume that no land-use change impacts are attributable
[121]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-123-2048.jpg)
![Box [B.2] Estimating land-use change impacts without specific data
In this example, the following steps were taken to these statistics, where the crops not shown (because they
determine whether land-use change impacts are are less than 1 percent individually) contribute 4 percent
attributable to palm oil and rice, and, if so, to produce to the total acreage.
the land-use impact estimate. The Food and Agriculture
2. Collect historical land-use data
Organization’s (FAO) statistical database is used to make
for the studied product.
the estimations, and both products are assumed to come
The second step is to collect historical land-use data for
from Malaysia. (See FAO website for more information:
the studied products to determine whether their land
http://faostat.fao.org/site/567/default.aspx#ancor.)
use has increased or decreased over the assessment
1. Determine the most-planted crops period (20 years in this example). Because statistical
in the assumed location land-use data are often published a few years behind
The first step is to determine the country profile for schedule (e.g., 2008 data published in 2010), companies
the most-planted crops. Because many agricultural can use the data as long as the unknown period does not
products are harvested in Malaysia, only crops that on exceed three years. If the unknown period does exceed
their own contribute more than 1 percent of the countries’ three years, companies should either supplement the
harvested area are considered. If the studied crop is not data with more recent statistics or consider another
within the top 1 percent of area harvested in the location, method to estimate land-use change impacts.
this is an indication that the assumed location is not
In figure B.3, the total change in the area harvested
appropriate. Companies should assume a location where
for rice paddy over the 20-year period remains fairly
a large amount, if not the largest amount, of the studied
steady (e.g., does not exceed a 1-percent increase). It
product is harvested from each year. Table B.1 shows
can be assumed that land-use change did not occur in
Table [B.1] Area harvested for crops grown in Malaysia in 2008 that contribute more than 1 percent
individually to total harvested hectares (ha).
Crop Area harvested 2008 [ha] Percent total area harvested
Cassava 41000 1%
Coconuts 174000 3%
Coffee, green 50000 1%
Natural rubber 1247000 19%
Oil palm fruit 3900000 60%
Oilseeds 150000 2%
Rice, paddy 667656 10%
Total 6478175 100%
Source: FAO, FAOSTAT. Available from http://faostat.fao.org/site/567/DesktopDefault.aspx?PageID=567#ancor, 2011.
[122] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-124-2048.jpg)
![Appendix B. Land-Use Change Impacts
Box [B.2] Estimating land-use change impacts without specific data (continued)
Figure [B.3] Area harvested (1000 ha) for rice Figure [B.4] Area harvested (1000 ha) for oil palm
paddy production in Malaysia for the fruit production in Malaysia for the
period from 1988-2008 period from 1988-2008
710 4500
700
area harvested (1000 ha)
area harvested (1000 ha)
4000
690
3500
680
3000
670
2500
660
650 2000
640 1500
630 1000
620 500
610 0
1990
1995
2000
2005
1990
1995
2000
2005
year year
Source: FAO, FAOSTAT. Available from http://faostat.fao.org/site/567/ Source: FAO, FAOSTAT. Available from http://faostat.fao.org/site/567/
DesktopDefault.aspx?PageID=567#ancor, 2011. DesktopDefault.aspx?PageID=567#ancor, 2011.
Malaysia due to rice production over the assessment 3. Determine what percentage of land-use change is
period. Assuming the GHG inventory is being assessed due to converted cropland
in 2010 companies should also consider whether Looking at the major crops dynamics in Malaysia over the
any recent changes in land use in Malaysia may have past 20 years, table B.2 shows a decrease in harvested
caused an increase in rice production over the past area for some crops and an increase in harvested area for
two years not shown in the data. If there is no reason palm oil. This indicates that the total growth of harvested
to believe this is the case, the company can assume area in the country is driven by increases in palm oil
that no land-use change impacts are attributable to production.
the studied product rice.
As table B.2 suggests, around 27 percent of the overall
Taking the same approach for palm oil, it is obvious from land-use growth could potentially come from the
figure B.4 that there has been an increase in land used for conversion of other cropland where area is decreasing.
palm production over the assessment period. Therefore the company may assume that 72 percent
of the palm oil produced in Malaysia comes from
At this point a company can either assume that all the land
areas converted from a different land category. This
is converted from a different land category (e.g., forest,
assumption should not be made if the total area of
grassland) to palm (see step 4), or they can estimate
cropland is decreasing, or if the country has specific
what percentage of land is converted within the cropland
efforts in place to convert degraded cropland to pasture
category and therefore not subject to land-use change.
land or another type of land category. In these cases, the
decrease in other cropland may be due to those efforts
and conversion to the studied product.
[123]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-125-2048.jpg)
![Box [B.2] Estimating land-use change impacts without specific data (continued)
Table [B.2] Top crops and the difference in areas harvested (ha) from 1988 to 2010 in Malaysia
Product Area harvested Area harvested Difference [ha]
1988 [ha] 2008 [ha]
Coconuts 327,812 174,000 -153,812
Natural rubber 1,660,000 1,247,000 -413,000
Oil palm fruit 1,530,905 3,900,000 2,369,095
Rice, paddy 671,755 667,656 -4,099
Others in sum 566,686 489,519 -77,167
Total growth 2,369,095
Total decrease 648,078
% growth that can be 27.4
covered by crop to
crop conversion
Source: FAO, FAOSTAT. Available from http://faostat.fao.org/site/567/DesktopDefault.aspx?PageID=567#ancor, 2011.
4. Determine type of land converted should perform a scenario uncertainty analysis to show
Malaysia has a tropical climate, and according to statistics the impact of different assumptions. For example, if a
the majority of land is forest (66 percent) or cropland crop is being produced in a country with tropical forest
(31 percent). Therefore, it should be assumed that
13
land and grassland that could be converted, companies
the land-use change occurred from tropical forest to should assume the tropical forest is being converted and
cropland to meet the increased demand for palm oil fruit. use grassland conversion for an uncertainty calculation.
Companies can use the IPCC default values to determine
5. Distribute land-use change impacts
what the carbon stock change associated with this land-
Unless the default data collected in step 4 is on an annual
use change would be. The company also needs to assume
basis, the company needs to distribute the land-use
what the land-use change practices would typically be
change impacts across the amortization period for the
when forest land is converted to cropland in Malaysia –
product. Assuming palm oil is harvested on an annual
for example, whether the forest biomass is burned during
basis, 1/20th of the land-use change impacts are applied
conversion and what fertilizers are applied to prepare the
to a yearly harvest of palm oil. This value is further
land for crop production.
normalized to the reference flow basis for inclusion in the
In some cases identifying the type of land converted may inventory results.
not be as straightforward. In such cases, companies
[124] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-126-2048.jpg)
![Appendix B. Land-Use Change Impacts
2 It is recognized that a change in carbon stock can result in either a
B.2.1 stimating significance
E
removal or emission of carbon from or to the atmosphere. However,
for land-use change impacts because this standard accounts for the GHG inventory of a product,
When specific land data are not available, companies may it is more likely that the use of biomass (and not the planting or
also chose to estimate the potential significance of land- re-growth of biomass) will results in GHG emissions than removals.
use impacts on their products to determine if a justifiable Growing biomass to create a GHG credit is not attributable to a
exclusion is appropriate. For example, a product that uses product following this standard methodology. However in some
a bio-based polymer as an input could estimate the impact cases, such as a carbon stock change from till to no-till crop rotation)
of land-use change assuming the worst case scenario (e.g., or use of degraded lands, a company may see a net positive land-use
all comes from land that was converted from natural forest) change impact (e.g., more removal than emissions).
and determine whether this is insignificant, applying the 3 This refers only to biomass burning, liming, and other practices
used to prepare converted land. Biomass burning and fertilizer
same rules as described in chapter 7. If land-use impacts are
application due to agricultural and forestry practices are also
deemed significant using this estimation, the company can
included in the inventory as attributable processes, separate from
either include the worst case values in the report or go back
land-use change impacts.
and try to estimate the potential impact using statistical
4 IPCC, 2006 IPCC Guidelines for National Greenhouse Gas
data. If land-use impacts are insignificant, then this should Inventories, vol.4, Agriculture, Forestry and Other Land Use,
be included as a justifiable exclusion in the inventory report. eds. H.S. Eggleston, L. Buendia, K. Miwa, T. Ngara and K. Tanabe
(Hayama, Japan: IGES,2006).
5 IPCC, 2006 IPCC Guidelines for National Greenhouse Gas
B.3 Soil carbon Inventories, vol.4, Agriculture, Forestry and Other Land Use,
When land-use change occurs, some of the carbon stock eds. H.S. Eggleston, L. Buendia, K. Miwa, T. Ngara and K. Tanabe
change that results is due to changes in the carbon stock of (Hayama, Japan: IGES,2006).
the soil. For example, converting natural land to cultivated 6 The 2006 IPCC guidelines give values for forest land above and
land reduces the amount of carbon the soil can store. The below a certain density of biomass. If the removal of biomass does
not cause a change in carbon stock value, then land-use change
IPCC factors for calculating carbon stock changes due to
impacts may be calculated as zero.
land-use change include estimates of soil carbon change.
7 It is important to note that nearly all fires in tropical forests are man-made.
However, soil carbon loss can continue even after land-use 8 IPCC, 2006 IPCC Guidelines for National GHG Inventories, vol. 4:
change as a result of land-use practices such as harvesting Agriculture, Forestry, and Other Land Use.
and fertilizer application. On the other hand, switching land- 9 FAO, FAOSTAT. Available from http://faostat.fao.org, 2011.
use practices can improve the carbon stock of soil, resulting 10 Distribution is used in reference to land-use change impacts to
refer to the apportionment of impacts over the amortization
in CO2 removal. Companies may include soil carbon change
period. Allocation is defined in chapter 9 as portioning inputs and
as a result of land-use practices in their inventory results
outputs of a common process to its product and co-products.
if they are able to reasonably estimate the emissions or
Both can occur when calculating land-use change impacts.
removals. Companies should report whether the soil carbon
11 Remote sensing is when current multispectral sensors provide
change is included in the inventory results. spectral data for identifying and mapping the crop types allowing
for precise monitoring of land-use changes. Current drawbacks of
this method are the relatively recent systematic data collection
endnotes (no regular multispectral coverage for 20 years ago timeframe),
1 The guidance presented here is based on methodologies and and the costs of images and processing.
guidelines given in the 2006 IPCC Guidelines for National GHG 12 Some examples of market-based models for the agriculture
Inventories, Volume 4: Agriculture, Forestry, and Other Land and forestry sector include the Food and Agricultural Policy
Use. A company is encouraged to look to the most recent Research Institute (FAPRI) and the Forest and Agricultural Sector
IPCC guidelines to ensure accurate and up-to-date accounting Optimization Model (FASOM).
of land use and land-use change emissions. However, it is 13 World Resources Institute, EarthTrends: Environmental
important to note that while the IPCC guidelines have useful and Information. Available from http://earthtrends.wri.org.
comprehensive information, their focus is on national inventories Washington DC: World Resources Institute.2007.
and therefore some details are not applicable.
[125]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-127-2048.jpg)
![Appendix C. Data Management Plan
A
data management plan documents the product inventory process and the
internal quality assurance and quality control (QA/QC) procedures in place
to enable the preparation of the inventory from its inception through to final
reporting. It is a valuable tool to manage data and track progress of a product inventory
over time, and can also be useful as an assurance readiness measure since it contains
much of the data needed to perform assurance.
This appendix provides guidance to help companies The review evaluates whether the inventory complies
create and maintain an effective data management plan. with the quality control specifications outlined in the data
Companies may already have similar procedures in place management plan. Peer reviews and audits should be
for other data collection efforts, such as meeting ISO conducted by someone not involved in the development
standards or corporate GHG accounting requirements. of the product inventory to reduce bias. Establishing data
Where possible, these processes should be aligned to management plans is helpful in the product inventory
reduce data management burdens. assurance process and they should be made available to
assurance providers (whether internal or external).
At a minimum the data management plans should contain
C.1 Overview of the data
the following items:
management plan
The quality control portion of the data management • Description of the studied product, unit of analysis,
plan outlines a system of routine technical activities and reference flow
to determine and control the quality of the product • Information on the entity(ies) or person(s) responsible
inventory data and the data management processes. for measurement and data collection procedures
The purpose is to ensure that the product inventory • All information that describes the product’s inventory
does not contain incorrect statements by identifying boundary
and reducing errors and omissions; providing routine • Criteria used to determine when a product inventory is
checks to maximize consistency in the accounting re-evaluated
process; and facilitating internal and external inventory • Data collection procedures
review and assurance. • Data sources, including activity data, emission factors
and other data, and the results of any data quality
The quality assurance portion of the data management
assessment performed
plan involves peer review and audits to assess the quality
• Calculation methodologies, including unit conversions
of the inventory. Table C.2 includes recommended quality
and data aggregation
assurance and control procedures. Peer review involves
• Length of time the data should be archived
reviewing the documentation of the product accounting
• Data transmission, storage, and backup procedures
methodology and results, but typically does not rigorously
• All QA/QC procedures for data collection, input and
review the data used or the references. This review aims
handling activities, data documentation, and emissions
to reduce or eliminate any inherent error or bias in the
calculations
process used to develop the inventory and assess the
effectiveness of the internal quality control procedures.
[126] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-128-2048.jpg)
![Appendix C. Data Management Plan
The process of setting up a data management system 5. Review final product inventory and reports. Review
should involve establishing standard procedures to procedures should be established that match the
address all of the data management activities, including purpose of the inventory and the type of assurance
the quality control and quality assurance aspects of performed. Internal reviews should be undertaken
developing a product inventory. in preparation for the assurance process by the
appropriate department within a company, such as
an internal audit or accounting department.
C.2 Creating a data management plan
6. Establish formal feedback loops to improve data
To develop a data management plan, the following steps
collection, handling, and documentation processes.
should be undertaken and documented.
Feedback loops are needed to improve the quality
1. Establish a product accounting quality person/ of the product inventory over time and to correct any
team. This person/team should be responsible for errors or inconsistencies identified in the review process.
implementing and maintaining the data management
7. Establish reporting, documentation, and archiving
plan, continually improving the quality of product
procedures. Establish record-keeping processes for
inventories, and coordinating internal data exchanges
what and how data should be stored over time, what
and any external interactions (such as with relevant
information should be reported as part of internal
product accounting programs and assurance
and external inventory reports, and what should be
providers). The person/team may be responsible for all
documented to support data collection and calculation
product inventories undertaken by a company or for
methodologies. The process may also involve aligning
an individual product inventory.
or developing relevant database systems for record
2. Develop a data management plan. For publicly- keeping. Systems may take time to develop, and it is
disclosed product inventories, the plan should cover important to ensure that all relevant information is
the components outlined in the section above (also collected prior to the establishment of the system and
see table C.1) Documenting this information should then transferred to the system once it is operational.
assist with completing repeat product inventories and
The data management plan is likely to be an evolving
assessing and improving the quality of the current
document that is updated as data sources change,
product inventory.
data handling procedures are refined, calculation
Development of the data management plan methodologies improve, product inventory
should begin before any data is collected to ensure responsibilities change within a company, or the business
all relevant information about the inventory is objectives of the product inventory change.
documented as it proceeds. The plan should evolve
Table C.1 outlines which components should be included
over time as data collection and processes are refined.
in a data management plan and can be used as a guide for
3. Perform generic data quality checks based on creating a plan or for pulling together existing documents
the data management plan. Generic checks to constitute the plan.
should be applied to all aspects of the inventory
process, focusing on data quality, data handling,
documentation, and calculation procedures.
4. Perform specific data quality checks. Specific checks
are more in-depth than generic and should be made
for those sources, processes, and/or activities that
are major contributors to the product inventory and/
or have high levels of uncertainty (see chapter 10 on
assessing uncertainty).
[127]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-129-2048.jpg)
![Table [C.1] Data management plan checklist
Component Information Rationale
Responsibilities Name and contact details of persons This ensures institutional knowledge
responsible for: is maintained and allows relevant
• Management of product inventory person(s) to be identified as
• Data collection for each process accountable for:
• Internal review or audit procedures • Confirming and checking
• Assurance procedures information during any internal or
external audit procedures
• Producing consistent future
product inventory
Product description • Description of the product and To provide internal auditors, assurance
functional unit providers, and those doing future
product inventories, with information
on the product/functional unit
Inventory boundary • Inventory boundary description (e.g., To provide internal auditors, assurance
cradle-to-grave or cradle-to-gate) providers, and those doing future
• How the boundary was derived product inventories with sufficient
• Attributable processes included in the information to understand and
inventory replicate boundary decisions
• Attributable processes excluded from
the inventory (including rationale for
exclusion)
• Information on how the product
use and end-of-life profile was
determined
Allocation • Allocation methodologies used and To provide internal auditors, assurance
where they were used providers, and those doing future
product inventories with sufficient
information to understand and
replicate allocation decisions
Data summary • Data collection procedures, including Records all data sources and allows
data sources for each process others to locate data sources (for audit
or future product inventories). Also
provides information on what suppliers
have been approached for data
• How data quality assessment and Enables data quality to be tracked over
uncertainty assessment were time and improved
undertaken
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![Appendix C. Data Management Plan
Table [C.1] Data management plan checklist (continued)
Component Information Rationale
Data summary • Data sources where better quality Identifies where data sources should
(continued) data is preferable and plan for how to be improved over time (e.g., needed
improve that data emissions for laptop computer but
could only obtain desktop computer
information), including those suppliers
who were asked to provide data and
those that were not
• Criteria used to determine when This allows data and information
an inventory is to be re-evaluated, sources to be tracked and compared
including the relevant information, over time. It may also involve
changes to the system to be tracked identifying a system (e.g., document
over time, and how these changes tracking and identification system) to
should be tracked ensure data and information is easily
located and under what conditions
this information/data was used
or collected
• Calculation methodologies used Provides internal auditors, assurance
(and references). This includes providers, and those doing future
documenting where the calculation product inventories with details on
methodology for any data used was how emissions were calculated
not available.
Inventory results • Calculation methodologies and Noting methodological changes allows
calculations changes in methodologies over time for easier baseline recalculation when
tracking inventory improvements
• GWP values used Allows for consistency over time
Performance tracking • When tracking performance, details Prescribes clearly a trigger for
of the base inventory adjustment adjusting a base inventory enabling
policy tracking of performance over time
Data storage • How and where data is stored Allows information to be easily located
procedures
• Length of time data is to be archived Keeps a record of how long
information is stored to prevent
looking for information that is no
longer kept
• Backup procedures Ensures backup procedures are
implemented
QA/QC procedures • QA/QC procedures used Ensures that adequate processes are
(see table C.2 for detailed guidance) in place to check data collection, input
and handling, data documentation, and
emissions calculations
[129]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-131-2048.jpg)
![Table [C.2] Recommended quality assurance/quality control procedures
Activity Procedure
Data collection, input,
and handling activities
• Transcription errors • Check a sample of input data in each process for transcription errors
in data collection
• Uncertainty • Check that the calculated uncertainties are complete and calculated correctly
estimates
Data documentation
• Transcription errors • Confirm that bibliographical data in references are properly cited.
in references • Ensure that all relevant references are archived
and storage of all
references used
• Storing information • Check that inventory boundary, base inventory (if relevant), GHGs included,
on inventory allocation methodology uses, data sources, and any relevant assumptions are
methodology, data, documented and archived
and data quality • Check that all data quality indicators are described, documented, and archived for
each process
• Check for consistency in emissions sources and data sources to similar product
inventories
• Recording parameter • Check that all units are appropriately labeled in calculation sheets
and unit information • Check that all units are correctly transferred through all calculations and
aggregation of emissions in all processes
• Check that conversion factors are correct
• Check any temporal or spatial adjustment factors are appropriate and correctly used
• Recording calculation • Check that all calculation methodologies are documented
methodologies • Check that any changes to calculation methodologies are documented
• Database/calculation • Ensure all fields and their units are labeled in database/calculation sheet
sheet integrity • Ensure the database/calculation sheet is documented and the structure and
operating details of the database/calculations sheets are archived
• Review of internal • Check there is sufficient internal documentation to support the estimates and
documentation and enable the reproduction of the emissions and data quality assessment, and
archiving uncertainty estimations
• Check that all data, supporting data and records are archived and stored to
facilitate a detailed review
• Check that the archive is securely stored
[130] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-132-2048.jpg)
![Appendix C. Data Management Plan
Table [C.2] Recommended quality assurance/quality control procedures (continued)
Activity Procedure
Calculating emissions
and checking calculations
• Aggregation • Ensure that the aggregation of emissions from all processes is correct
of emissions
• Emissions trends • Where possible, compare emissions from each process (or total product emissions)
to previous estimates. If significant departures, check data inputs, assumptions and
calculation methodologies
• Where possible, compare material and energy purchases for each process (or in
total) against generic industry averages
Calculation • Reproduce a sample set of emissions and removals calculations to cross-check the
methodologies application of calculation methodologies
• Where possible, cross-check calculation methodologies used against more or less
complex methodologies to ensure similar results are achieved
[131]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-133-2048.jpg)
![Abbreviations
BSI British Standards Institution QA/QC Quality Assurance/Quality Control
CH4 Methane R&D Research and Development
CO2 Carbon Dioxide SETAC Society of Environmental Toxicology and
Chemistry
CO2e Carbon Dioxide Equivalent
SF6 Sulfur Hexafluoride
DEFRA UK Department of Environment Food and
Rural Affairs SKU Stock-Keeping Unit
EEIO Environmentally Extended Input-Output UNEP United Nations Environment Programme
EPD Environmental Product Declaration UNFCCC United Nations Framework Convention on
Climate Change
FAO Food and Agriculture Organization
UNSPSC United Nations Standard Products and
GHG Greenhouse Gas
Services Code
GIS Geographic Information System
WBCSD World Business Council for Sustainable
GTP Global Temperate Potential Development
GWP Global Warming Potential WRI World Resources Institute
HFCs Hydrofluorocarbons
ILCD International Reference Life Cycle Data
IPCC Intergovernmental Panel on Climate Change
ISO International Organization for Standardization
kg Kilogram
LCA Life Cycle Assessment
LCI Life Cycle Inventory
MW Megawatt
NAICS North American Industry Classification System
NGO Non-Governmental Organization
N2O Nitrous Oxide
O&M Operation and Maintenance
PAS 2050 Publicly Available Specification 2050
PCR Product Category Rule
PET Polyethylene Terephthalate
PFCs Perfluorocarbons
[132] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-134-2048.jpg)
![Glossary
Allocation The partitioning of emissions and removals from a common process between the studied
product’s life cycle and the life cycle of the co-product(s).1
Assurance The level of confidence that the inventory results and report are complete, accurate,
consistent, transparent, relevant, and without material misstatements.
Assurer A competent individual or body who conducts the assurance process, whether internally
within the company or externally.
Attributable processes Service, material, and energy flows that become the product, make the product, and
carry the product through its life cycle.
Attributional approach An approach to LCA where GHG emissions and removals are attributed to the unit of analysis
of the studied product by linking together attributable processes along its life cycle.2
Audit trail Well organized and transparent historical records documenting how the GHG inventory
was compiled.
Biogenic Produced by living organisms or biological processes, but not fossilized or from
fossil sources.3
Carbon stock The total amount of carbon stored on a plot of land at any given time in one or more of
the following carbon pools: biomass (above and below ground), dead organic matter
(dead wood and litter), and soil organic matter.4 A change in carbon stock can refer to
additional carbon storage within a pool, the removal of CO2 from the atmosphere, or the
emission of CO2 to the atmosphere.
Common process One process that has multiple valuable products as inputs and/or outputs including the
studied product and co-product(s).
Comparative assertion An environmental claim regarding the superiority or equivalence of one product versus a
competing product that performs the same function.5
Consequential approach An approach to LCA where processes are included in the life cycle boundary to the extent
that they are expected to change as a consequence of a change in demand for the unit
of analysis.6
Consumer An individual that purchases and uses a product.
Co-product A product exiting the common process that has value as an input into another product’s
life cycle.
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![Cradle-to-gate inventory A partial life cycle of an intermediate product, from material acquisition through to
when the product leaves the reporting company’s gate (e.g., immediately following the
product’s production).
Cradle-to-grave inventory Removals and emissions of a studied product from material acquisition through to
end-of-life.
Customer An entity that purchases, rents, or uses the products of another entity (i.e., a supplier).
Direct emissions data Emissions released from a process (or removals absorbed from the atmosphere)
determined through direct monitoring, stoichiometry, mass balances, or similar methods.
Downstream GHG emissions or removals associated with processes that occur in the life cycle of a
product subsequent to the processes owned or controlled by the reporting company.7
Emissions factor GHG emissions per unit of activity data.
End-of-life stage A life cycle stage that begins when the used product is discarded by the consumer and
ends when the product is returned to nature (e.g., incinerated) or allocated to another
product’s life cycle.
Environmentally extended Emission factors developed through the analysis of economic flows and used to estimate
input-output (EEIO) GHG emissions for a given industry or product category.8
Extrapolated data Data specific to another process or product that has been adapted or customized to
resemble more closely the conditions of the given process in the studied product’s life cycle.
Final product Goods and services that are ultimately consumed by the end user rather than used in the
production of another good or service.
Financial activity data Monetary measures of a process that result in GHG emissions or removals.
First party (self or Assurance performed by a person(s) from within the reporting company but independent
internal) assurance of the GHG inventory determination process.
Function The service provided by the studied product.
Functional unit The quantified performance of the studied product.9
Gate-to-gate The emissions and removals attributable to a studied product while it is under the
ownership or control of the reporting company.
GHG impact The results calculated when GHG emissions and removals are multiplied by the relevant
global warming potential (GWP).
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![Glossary
Global warming potential A factor used to calculate the cumulative radiative forcing impact of multiple specific
(GWP) GHGs in a comparable way.10
Indirect land-use change When the demand for a specific land use induces a carbon stock change on other lands.
Insignificance threshold The threshold below which a process, input, or output can be considered insignificant to
the studied product’s life cycle inventory.
Intermediate products Goods that are used as inputs to the production of other goods or services.
Inventory report The full reporting requirements, plus any optional information, reported publicly in
conformance with the Product Standard.
Inventory results The GHG impact of the studied product per unit of analysis.
Land use categories Forest land, cropland, grassland, wetlands, settlements and other lands.11
Land-use change Occurs when the demand for a specific land use results in a change in carbon stocks
on that land, due to either a conversion from one land-use category to another or a
conversion within a land-use category.
Land-use change impacts Emissions and removals due to land-use change.
Level of assurance The degree of confidence stakeholders can have over the information in the
inventory report.
Life cycle Consecutive and interlinked stages of a product system, from raw material acquisition or
generation of natural resources to end-of-life.
Life cycle assessment Compilation and evaluation of inputs, outputs and potential environmental impacts of a
product system throughout its lifecycle.12
Life cycle stage A useful categorization of the interconnected steps in a product’s life cycle for the
purposes of organizing processes, data collection, and inventory results.
Material acquisition and A life cycle stage that begins when resources are extracted from nature and ends when
pre-processing stage the product components enter the gate of the studied product’s production facility.
Material misstatement Individual or aggregate errors, omissions, and misrepresentations that significantly
impact the GHG inventory results and could influence a user’s decisions.
Non-attributable processes Processes and services, materials and energy flows are not directly connected to the
studied product because they do not become the product, make the product, or directly
carry the product through its life cycle.
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![Primary data Data from specific processes in the studied product’s life cycle.
Process activity data Physical measures of a process that result in GHG emissions or removals.
Product Any good or service.
Product category Group of products that can fulfill equivalent functions.13
Product distribution A life cycle stage that begins when the finished studied product leaves the gate of the
and storage stage production facility and ends when the consumer takes possession of the product.
Product GHG inventory Compilation and evaluation of the inputs, outputs, and the potential GHG impacts of
a product system throughout its life cycle.
Product rule A document containing additional specifications needed to enable comparisons or
declarations about a product or product category.
Production stage A life cycle stage that begins when the product components enter the production
site for the studied product and ends when the finished studied product leaves the
production gate.
Proxy data Data from a similar activity that is used as a stand-in for the given activity. Proxy data can
be extrapolated, scaled up, or customized to represent the given activity.
Recycling processes Processes that occur as a result of a product or material being reused or recycled as a
material input into another product’s life cycle.
Reference flow The amount of studied product needed to fulfill the function defined in the unit of analysis.14
Removal The sequestration or absorption of GHG emissions from the atmosphere, which most
typically occurs when CO2 is absorbed by biogenic materials during photosynthesis.
Reporting company The company performing the product GHG inventory in conformance with the
Product Standard.
Same inherent properties When a recycled material has maintained its properties (e.g., chemical, physical) such that
(recycling) it can be used as a direct replacement of virgin material.
Scope 3 inventory A reporting organization’s indirect emissions other than those covered in scope 2.
A company’s scope 3 inventory includes the upstream and downstream emissions of the
reporting company.
Secondary data Process data that are not from specific processes in the studied product’s life cycle.
Sector guidance A document or tool that provides guidance for performing a product GHG inventory
within a given sector.
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![Glossary
Service life The amount of time needed for a product to fulfill the function defined in the unit of
analysis.
Studied product The product for which the GHG inventory is performed.
Third party (external) Assurance performed by a person(s) from an organization independent of the product
assurance GHG inventory determination process.
Time period The period of time when attributable processes occur during the studied product’s life
cycle, from when materials are extracted from nature until they are returned to nature at
the end-of-life (e.g., incinerated) or leave the studied product’s life cycle (e.g., recycled).
Qualitative uncertainty A general and imprecise term which refers to the lack of certainty in data and
methodology choices, such as the application of non-representative factors or methods,
incomplete data on sources and sinks, lack of transparency, etc.
Quantitative uncertainty Measurement that characterizes the dispersion of values that could reasonably be
attributed to a parameter (adapted from ISO 1995).15
Unit of analysis The basis on which the inventory results are calculated; the unit of analysis is defined as
the functional unit for final products and the reference flow for intermediate products.
Upstream GHG emissions or removals associated with processes that occur in the life cycle of a
product prior to the processes owned or controlled by the reporting company.16
Use stage A life cycle stage that begins when the consumer takes possession of the product and
ends when the used product is discarded for transport to a waste treatment location or
recycled into another product’s life cycle.
Waste An output of a process that has no market value.
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![endnotes
1 Adapted from ISO 14044:2006.
2 Adapted from UNEP and SETAC, Global Guidance Principles for Life Cycle Assessment Databases. 2011.
3 Adapted from British Standards Institution et al. PAS 2050:2008: Specification for the assessment of life
cycle greenhouse gas emissions of goods and services.
4 IPCC, 2006 IPCC Guidelines for National GHG Inventories, Volume 4: Agriculture, Forestry, and Other
Land Use.
5 International Organization of Standardization, ISO 14044:2006, Life Cycle Assessment: Requirements
and Guidelines.
6 Adapted from UNEP and SETAC, Global Guidance Principles for Life Cycle Assessment Databases. 2011.
7 Adapted from British Standards Institution et al. PAS 2050:2008: Specification for the assessment of life
cycle greenhouse gas emissions of goods and services.
8 Adapted from British Standards Institution et al. PAS 2050:2008: Specification for the assessment of life
cycle greenhouse gas emissions of goods and services.
9 Adapted from ISO 14044:2006.
10 Adapted from IPCC, IPCC Fourth Assessment Report, 2007.
11 IPCC, 2006, Guidelines for National GHG Inventories, Volume 4: Agriculture, Forestry, and Other Land Use.
12 International Organization of Standardization, ISO 14044:2006, Life Cycle Assessment: Requirements
and Guidelines.
13 International Organization for Standardization, ISO 14025:2006, Environmental labels and declarations--
Type III environmental declarations -- Principles and procedures.
14 Adapted from ISO 14044:2006.
15 International Organization for Standardization, 1995, ISO/IEC Guide 98:1995. Guide to the expression of
uncertainty in measurement (GUM).
16 Adapted from British Standards Institution et al. PAS 2050:2008: Specification for the assessment of life
cycle greenhouse gas emissions of goods and services.
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![References
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British Standards Institution et al. PAS 2050:2008: International Organization for Standardization. ISO
Specification for the assessment of life cycle greenhouse 14049:2000, Environmental management — Life cycle
gas emissions of goods and services. assessment — Examples of application of ISO 14041 to
goal and scope definition and inventory analysis. Geneva.
European Commission - Joint Research Centre - Institute
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Huijbregts, Mark A. J. “Application of uncertainty Mitigation. Contribution of Working Group III to the Fourth
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for the Analysis of Uncertainty and Variability in Life Climate Change, ed. B. Metz, O.R. Davidson, P.R. Bosch, R.
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Paper Association, 1996. K. Tanabe (Hayama, Japan: IGES,2006).
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Weidema, B.P. and M.S. Wesnaes. Data quality
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[139]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-141-2048.jpg)
![Recognitions
Advisors
Fabio Peyer, Amcor Ltd. Matthew Bateson, World Business Council
Jannie Bell, Dell Inc. for Sustainable Development
Björn Hannappel, Deutsche Post DHL Jennifer Morgan, World Resources Institute
Carina Alles, DuPont Janet Ranganathan, World Resources Institute
Lisa Grice, ENVIRON International Corporation Ranping Song, World Resources Institute
Road Testing Companies
3M Italcementi Group
Acer Kunshan Tai Ying Paint
AkzoNobel Lenovo
Alcoa Levi Strauss & Co.
Amcor Ltd. Mitsubishi Chemical Holdings Corporation
Anvil Knitwear New Belgium Brewing
Baosteel Group Corporation PepsiCo
BASF Procter & Gamble
Belkin International, Inc. Quanta Shanghai Manufacturing City, Tech-Front
Bloomberg LP (Shanghai) Computer Co. Ltd.
BT plc Rogers Communications
Deutsche Post DHL RSA Insurance Group plc
Deutsche Telekom AG Shanghai Zidan Printing Co., Ltd
Diversey Shell
DuPont Suzano Pulp & Paper
Ecolab, Inc. Swire Beverages (Coca-Cola Bottling Partner)
Edelweiss TAL Apparel
GE Global Research Verso Paper Corp.
GNP Company WorldAutoSteel
Herman Miller, Inc.
Product Standard Technical Working Group Members
Patrick Wood, AgRefresh Connie Sasala, Cameron-Cole, LLC
Johan Widheden, AkzoNobel Pierre Boileau, Canadian Standards Association
Cyrille de Labriolle, API-HK Steve Marsden, Carbon Step Change (Chair)
Deirdre Wilson, Applied Sustainability International, LLC Scott Kaufman, Carbon Trust
Richard Sheane, Best Foot Forward Thomas Wiedmann, Centre for Sustainability Accounting Ltd.
Craig Simmons, Best Foot Forward and Footprinter Laura Verduzco, Chevron Energy Technology Company
Marcelo Valadares Galdos, Brazilian Bioethanol Science Richard Mendis, Clear Standards
and Technology Laboratory J. Renee Morin, ClearCarbon
Gabrielle Ginér, BT plc Steve Davis, The Climate Conservancy (Chair)
Glyn Stacey, BT Group plc Tashweka Anderson, Computacenter
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![Recognitions
Product Standard Technical Working Group Members (continued)
Jannick H Schmidt, The Danish Centre for Environmental Suzie Greenhalgh, Landcare Research NZ Ltd. (Chair)
Assessment, Aalborg University Taylor Wilkinson, LMI (Chair)
Atsushi Inaba, Department of Environmental and Energy Paul Smith, LRQA Ltd.
Chemistry, Kogakuin University Oliver Ferrari, MarionEco
Emelia Holdaway, Ecofys Edgar E Blanco, Massachusetts Institute of Technology
Yves Loerincik, Ecointesys - Life Cycle Systems Kiyoshi Matsuda, Mitsubishi Chemical Corporation
Catarina Furtado, Ecoprogresso Jeffrey Mittelstadt, National Council
Lisa Brady, EMC Corporation for Advanced Manufacturing
Kathrin Winkler, EMC Corporation Caroline Gaudreault, NCASI
Brenna Zimmer, EMC Corporation Reid Miner, NCASI
Vivek Dhariwal, Emergent Ventures India Hans H. Wegner, National Geographic Society
Mary Stewart, Emergent Ventures India Anthony D’Agostino, National University of Singapore
Liu Qiang, Energy Research Institute, China’s National Alison Watson, New Zealand Ministry
Development and Reform Commission of Agriculture and Forestry
Lisa Grice, ENVIRON International Corporation Jostein Soreide, Norsk Hydro
Dave Covell, ENVIRON UK Ltd Wilson Korol, Nortel Networks
Ronjoy Rajkhowa, Ernst & Young Tim Moore, Northwest Carbon
Pere Fullana, Escola Superior de Comerc Internacional Karen Oxenbøll, Novozymes A/S
Niels Jungbluth, ESU-services Ltd. Christian Hochfeld, Öko Institut
Alex Loijos, FoodPrint Dietlinde Quack, Öko Institut
Angela Fisher, GE Global Research Philippe Letherisien, Orange
William P. Flanagan, GE Global Research Eloise Brauner, PE INTERNATIONAL
Jacob Park, Green Mountain College Sabine Deimling, PE INTERNATIONAL
Shannon Binns, Green Press Initiative Harald Florin, PE INTERNATIONAL
Prasad Modak, Green Purchasing Network of India Hannes Partl, PE INTERNATIONAL
Shantanu Roy, Green Purchasing Network of India Julia Pflieger, PE INTERNATIONAL
Tom Baumann, Greenhouse Gas Management Institute Michael Spielmann, PE INTERNATIONAL
Michael Gillenwater, Greenhouse Gas Liila Woods, PE INTERNATIONAL
Management Institute Haixiao Zhang, PE INTERNATIONAL
Pablo Päster, Hara Duncan Noble, PE INTERNATIONAL, Inc. & Five Winds
Terrie K. Boguski, Harmony Environmental, LLC Strategic Consulting
Paul Shabajee, Hewlett-Packard Robert ter Kuile, PepsiCo
Olle Blidholm, IKEA Group Stephanie Adda, PricewaterhouseCoopers, LLP
Xander van der Spree, IKEA Group Helen Slinger, PricewaterhouseCoopers, LLP
Luis G. Huertas, Independent Architect Getachew Assefa, Royal Institute
Angeline de Beaufort-Langeveld, of Technology – Stockholm
Independent Consultant Jonas Dennler, SAP
Scott Stewart, Intel Jim Sullivan, SAP
Marlen Bertram, International Aluminium Institute Kevin Ramm, SAP AG
Kurt Buxmann, International Aluminium Institute Andreas Vogel, SAP Labs
Georgios Sarantakos, International Union Chris Librie, SC Johnson
for Conservation of Nature Valerie A Slomczewski, SC Johnson
Mankaa Nangah Rose, Italcementi Group Lisa Brough, SGS
David V. Spitzley, Kimberly-Clark Corporation (Chair) Jan Minx, Stockholm Environment Institute
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![Product Standard Technical Working Group Members (continued)
Evan Andrews, Sylvatica Verena Radulovic, United States Environmental
Pascal Lesage, Sylvatica/CIRAIG Protection Agency
Wilhelm Wang, Transreg, LLC Kathleen Vokes, United States Environmental
Henry King, Unilever Protection Agency
Sarah Sim, Unilever Sarah Froman, United States Environmental
Bhawan Singh, Université de Montréal Protection Agency
David Guernsey, United Parcel Service Wayne Wnuck, United Technologies Corporation
John Kimball, United States Department of Energy Sangwon Suh, University of California Santa Barbara
Vince Camobreco, United States Environmental Craig Liska, Verso Paper
Protection Agency Jeffrey Rice, Walmart Stores, Inc.
Contributors
Stefanie Giese-Bogdan, 3M Patricia Ludewig, Caterpillar
Sam Lin, Acer Claude Loréa, CEMBUREAU
Fiona van den Brink, AkzoNobel Thomas Wiedmann, Centre for Sustainability Accounting Ltd.
Marc Luijten, AkzoNobel Meg Crawford, CERES
Sara Tollin, AkzoNobel Jianhua Chen, China National Institute of Standardization
Johan Widheden, AkzoNobel Liang Chen, China National Institute of Standardization
Paola Kistler, Alcan Mei Liu, China National Institute of Standardization
Tony Christopher, Alcoa Corinne Reich-Weiser, Climate Earth
Casey Wagner, Alcoa Christopher Gleadle, The CMG Consultancy
Fabio Peyer, Amcor Ltd. Christoph Meinrenken, Columbia University
Gerald Rebitzer, Amcor Ltd. Tony Siantonas, dcarbon8 Ltd.
Caterina A. Conti, Anvil Knitwear Steven Moore, Deloitte Touche Tohmatsu Limited
Arturo Cepeda, Artequim Björn Hannappel, Deutsche Post DHL
Shuichiro Sugimoto, Asahi Glass Co., Ltd. Klaus Hufschlag, Deutsche Post DHL
Hiroo Takahashi, Asahi Glass Co., Ltd. Markus Igel, Deutsche Post DHL
Tao Liu, Baosteel Group Corporation Mathis Lapenküpper, Deutsche Post DHL
Yinghao Liu, Baosteel Group Corporation Patric Pütz, Deutsche Post DHL
Hongzhi Shi, Baosteel Group Corporation Stephan Schlabinski, Deutsche Post DHL
Giuliana Angonoa-Doehnert, BASF Hans-Jürgen Gerhardy, Deutsche Telekom AG
Nicola Paczkowski, BASF Reiner Lemke, Deutsche Telekom AG
Anthony Edwards, Belkin International, Inc. Michael Zalan, Deutsche Telekom AG
Gregory LeMay, Beverage Industry Daniel A. Daggett, Diversey
Environmental Roundtable Carina Alles, DuPont
Hans Blonk, Blonk Milieu Advies Dawn Rittenhouse, DuPont
Lee Ballin, Bloomberg LP Susanne Veith, DuPont
Gabrielle Ginér, BT plc Bo Weidema, Ecoinvent
Glyn Stacey, BT Group plc Matt Molinaro, Ecolab, Inc.
Ryan Schuchard, Business for Social Responsibility Ali Rivers, Ecometrica
Annalisa Schilla, California Air Resources Board Marc Zanter, Edelweiss
Ian Lipton, The Carbon Accounting Company Nigel Carter, En-Venture
James Leaton, Carbon Tracker Initiative Lixiao Hu, Energy Systems International
[142] Product Life Cycle Accounting and Reporting Standard](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-144-2048.jpg)
![Recognitions
Contributors (continued)
Ines Sousa, ENXSUITE Josephine Przewodnik, RECARBON Deutschland GmbH.
Camile Burel, European Bioindustry Association Brian Au, RESET Carbon
Jonathan Newton, Ford Motor Company Hicham Elhalaby, Rogers Communications
William Flanagan, GE Global Research Paul Pritchard, RSA Insurance Group plc
Angela Fisher, GE Global Research Alyssa Farrell, SAS
Paul Helgeson, GNP Company Barbara Nebel, Scion
Juergen Ritzek, GreenBusinessConsulting Robin Li, SGS-CSTC Standards Technical Services Co., Ltd.
Thaddeus Owen, Herman Miller, Inc. Danny Wong, SGS Hong Kong Limited
Yoshiaki Ichikawa, Hitachi, Ltd. Fei Han, Shanghai Zidan Printing Co., Ltd.
Hemant Bundele, ibLaunch Energy, Inc. Yadi Shen, Shanghai Zidan Printing Co., Ltd.
Tim Higgs, Intel Marieke Groenendaal, Shell
Ted Reichelt, Intel Stephen Kinder, Shell
Silvana Paniagua Tufinio, Intelligence for Business Xavier Riera-Palou, Shell
Chris Bayliss, International Aluminium Institute Zoltán Hajdu, Soltub, Ltd.
Rose Nangah Mankaa, Italcementi Group Mariana Carlini, Suzano Pulp & Paper
Manuela Ojan, Italcementi Group Samuel Kwong, Swire Beverages
Sunil Kumar, ITC (Coca Cola Bottling Partner)
Yoshikazu Kato, The Japan Gas Association Thomas Yip, TAL Apparel
Wenlin Wang , Kunshan Tai Ying Paint Yutaka Yoshida, TOKYO GAS CO., LTD.
John Andrews, Landcare Research NZ Javier Fajardo, USDA/FAS/OSTA
Craig McCutcheon, Landcare Research NZ Laurence Hamon, Veolia Environnement
Barruch Ben-Zekry, Levi Strauss & Co. Research & Innovation
Colleen Kohlsaat, Levi Strauss & Co. Guillaume Arama, Veolia Water
Xun Gong, Lenovo David Houdusse, Veolia Water
William Guthrie, Lenovo Craig Liskai, Verso Paper Corp.
Mads Stensen, Maersk Line Lisbeth Dahllöf, Volvo Technology
Kara E.Reeve, Massachusetts Institute of Technology Edie Sonne Hall, Weyerhaeuser
Kenji Shima, Mitsubishi Chemical Holdings Corporation George Coates, WorldAutoSteel
Leah Fry, National Grid Antonia Gawel, World Business Council for Sustainable
David B. Goldstein, Natural Resources Defense Council Development
Jenn Orgolini, New Belgium Brewing Bernhard Gruenauer, World Business Council for
Claus Frier, Novozymes A/S Sustainable Development
Stefan Seum, Öko-Institut, Germany Varun Vats, World Business Council for Sustainable
Jeff Stein, Open Data Registry Development
Robert TerKuille, PepsiCo Wee Kean Fong, World Resources Institute
Eros Artuso, PricewaterhouseCoopers, LLP Taryn Fransen, World Resources Institute
Christopher Ho, PricewaterhouseCoopers Lauren Gritzke, World Resources Institute
Hong Kong/China Stacy Kotorac, World Resources Institute
Annie Weisbrod, Procter & Gamble Eliot Metzger, World Resources Institute
Diederik Schowanek, Procter & Gamble Environmental Michelle Perez, World Resources Institute
Stewardship Organization Laura Pocknell, World Resources Institute
Aimee Ding, Quanta Shanghai Manufacturing City, Tech- Neelam Singh, World Resources Institute
Front (Shanghai) Computer Co. Ltd. Clare Broadbent, World Steel Association
Larry Li, Quanta Shanghai Manufacturing City, Tech-Front
(Shanghai) Computer Co. Ltd.
[143]](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-145-2048.jpg)
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The Carbon Trust PRé Consultants
China National Institute of Standardization PricewaterhouseCoopers, LLP
DNV SGS-CSTC Standards Technical Services Co., Ltd.
KPMG SGS Hong Kong Limited
PE Consulting
Consultants
China National Institute of Standardization
PricewaterhouseCoopers, LLP
Quantis
RESET Carbon
WRI and WBCSD would like to thank the following organizations for their generous financial support: Alcoa Foundation, BP
Foundation, Dell Inc., EMC Corporation, Intel Corporation, Kimberly Clark Corporation, PepsiCo, PricewaterhouseCoopers,
LLP, Robertson Foundation, SC Johnson & Son, Inc., Siemens, United States Agency for International Development
(USAID), United States Environmental Protection Agency (US EPA), United Technologies Corporation, UPS Foundation,
and Walmart Foundation. WBCSD, funded by its member companies, also provided direct financial support.
Copyright © World Resources Institute and World
Business Council for Sustainable Development,
September 2011
ISBN 978-1-56973-773-6
Printed on 70# Chorus Art Silk text and 80# cover
Printed in USA (30% post consumer recycled) with soy-based inks.
[144] Product Life Cycle Accounting and Reporting Standard Design: Alston Taggart, Studio Red Design
Cover: Futerra Sustainability Communications](https://image.slidesharecdn.com/product-life-cycle-accounting-and-reporting-standard1715-120130083933-phpapp02/75/Product-Life-Cycle-Accounting-and-Reporting-Standard-146-2048.jpg)
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Product Life Cycle Accounting and Reporting Standard
- 1. Product Life Cycle Accountingand Reporting Standard
- 2. GHG Protocol Team PankajBhatia, World Resources Institute Cynthia Cummis, World Resources Institute Andrea Brown, World Business Council for Sustainable Development Laura Draucker, World Resources Institute David Rich, World Resources Institute Holly Lahd, World Resources Institute Steering Committee Gerald Rebitzer, Amcor Ltd. Nigel Topping, Frances Way, Carbon Disclosure Project (CDP) Graham Sinden, The Carbon Trust H. Scott Matthews, Carnegie Mellon University Luc Larmuseau, DNV Climate Change Services David A. Russell, Rob Rouse, The Dow Chemical Company Jiang Kejun, Energy Research Institute, China’s National Development and Reform Commission Andrew Hutson, Environmental Defense Fund Simon Aumônier, Environmental Resources Management Ugo Pretato, Kirana Chomkhamsri, European Commission Joint Research Centre Steven Meyers, General Electric Sergio Galeano, Georgia Pacific, ISO TC207 U.S. Technical Advisory Group Gregory A. Norris, Harvard University, New Earth, University of Arkansas Klaus Radunsky, ISO 14067 Working Group Convener Atsushi Inaba, Kogakuin University Alison Watson, New Zealand Ministry of Agriculture and Forestry Susan Cosper, Nick Shufro, PricewaterhouseCoopers LLP Rasmus Priess, THEMA1 GmbH, Product Carbon Footprint World Forum Wanda Callahan, Shell James A. Fava, UNEP SETAC Life Cycle Initiative, Five Winds International Matthias Finkbeiner, UNEP SETAC Life Cycle Initiative, Technische Universität Berlin Henry King, Unilever Susan Wickwire, John Sottong, United States Environmental Protection Agency Maureen Nowak, United Kingdom Department of Environment, Food, and Rural Affairs James Stanway, Miranda Ballentine, Walmart Stores Inc.
- 3. Table of Contents CHAPTeRS guidance 1. Introduction 02 guidance 2. Defining Business Goals 08 requirements guidance 3. Summary of Steps and Requirements 12 requirements guidance 4. Principles of Product Life Cycle GHG Accounting and Reporting 18 requirements guidance 5. Fundamentals of Product Life Cycle GHG Accounting 20 requirements guidance 6. establishing the Scope of a Product Inventory 26 requirements guidance 7. Boundary Setting 32 requirements guidance 8. Collecting Data and Assessing Data Quality 46 requirements guidance 9. Allocation 60 requirements guidance 10. Assessing Uncertainty 78 requirements guidance 11. Calculating Inventory Results 84 requirements guidance 12. Assurance 92 requirements guidance 13. Reporting 100 requirements guidance 14. Setting Reduction Targets and Tracking Inventory Changes 108 APPenDICeS A. Guidance on Product Comparison 115 B. Land-Use Change Impacts 117 C. Data Management Plan 126 Abbreviations 132 Glossary 133 References 139 Recognitions 140 [01]
- 4.
- 5. g u id a n c e E missions of the anthropogenic greenhouse gases (GHG) that drive climate change and its impacts around the world are growing. According to climate scientists, global carbon dioxide emissions must be cut by as much as 85 percent below 2000 levels by 2050 to limit global mean temperature increase to 2 degrees Celsius above pre-industrial levels.1 Temperature rise above this level will produce increasingly unpredictable and dangerous impacts for people and ecosystems. As a result, the need to accelerate efforts to reduce anthropogenic GHG emissions is increasingly urgent. Existing government policies will not sufficiently solve the problem. Leadership and innovation from business is vital to making progress. Corporate action in this arena also makes good business an understanding. It allows companies to take into sense. By addressing GHG emissions, companies can account their emissions-related risks and opportunities identify opportunities to bolster their bottom line, and focus company efforts on their greatest GHG reduce risk, and discover competitive advantages. As impacts. Until recently, companies have focused their impacts from climate change become more frequent and attention on emissions from their own operations. But prominent, governments are expected to set new policies increasingly companies understand the need to also and provide additional market-based incentives to drive account for GHG emissions along their value chains and significant reductions in emissions. These new policy and product portfolios to comprehensively manage GHG- market drivers will direct economic growth on a low- related risks and opportunities. carbon trajectory. Businesses need to start planning for Through the development of the GHG Protocol Product this transition now as they make decisions that will lock in Standard, the GHG Protocol has responded to the their investments for years to come. demand for an internationally accepted method to An effective corporate climate change strategy requires enable GHG management of companies’ goods and a detailed understanding of a company’s GHG impact. services. Following the release of this standard, the A corporate GHG inventory is the tool to provide such GHG Protocol and its partners will proactively work [03]
- 6. g u id a n c e with industry groups and governments to promote its The GHG Protocol has produced the following separate, widespread use – along with the entire suite of GHG but complementary standards, protocols, and guidelines: Protocol standards and tools – to enable more effective • GHG Protocol Corporate Accounting and Reporting GHG management worldwide. Standard (2004): A standardized methodology for companies to quantify and report their corporate GHG emissions. Also referred to as the Corporate Standard. 1.1 The Greenhouse Gas Protocol • GHG Protocol Corporate Value Chain (Scope 3) The Greenhouse Gas (GHG) Protocol is a multistakeholder Accounting and Reporting Standard (2011): partnership of businesses, non-governmental A standardized methodology for companies to quantify organizations (NGOs), governments, and others convened and report their corporate value chain (scope 3) GHG by the World Resources Institute (WRI) and the World emissions, to be used in conjunction with the Corporate Business Council for Sustainable Development (WBCSD). Standard. Also referred to as the Scope 3 Standard. Launched in 1998, the mission of the GHG Protocol is • GHG Protocol for Project Accounting (2005): to develop internationally accepted greenhouse gas A guide for quantifying reductions from GHG-mitigation (GHG) accounting and reporting standards and tools, projects. Also referred to as the Project Protocol. and to promote their adoption in order to achieve a low • GHG Protocol for the U.S. Public Sector (2010): emissions economy worldwide. A step-by-step approach to measuring and reporting The GHG Protocol follows a broad, inclusive, consensus- emissions from public sector organizations, based multi-stakeholder process to develop these complementary to the Corporate Standard. standards with balanced participation from businesses, • GHG Protocol Guidelines for Quantifying GHG government agencies, non-governmental organizations, Reductions from Grid-Connected electricity Projects and academic institutions from around the world. The (2007): A guide for quantifying reductions in emissions standards include detailed guidance to assist users with that either generate or reduce the consumption of implementation and are freely available on the GHG electricity transmitted over power grids, to be used in Protocol website (www.ghgprotocol.org). conjunction with the Project Protocol. [04] Product Life Cycle Accounting and Reporting Standard
- 7. CHAPTeR 01 Introduction •GHG Protocol Land Use, Land-Use Change, and address avoided emissions or actions taken to mitigate Forestry Guidance for GHG Project Accounting released emissions. This standard is also not designed to (2006): A guide to quantify and report reductions from be used for quantifying GHG reductions from offsets or land use, land-use change, and forestry, to be used in claims of carbon neutrality. g u i d a n c e conjunction with the Project Protocol. Ultimately, this is more than a technical accounting • Measuring to Manage: A Guide to Designing GHG standard. It is intended to be tailored to business realities Accounting and Reporting Programs (2007): A and to serve multiple business objectives. Companies may guide for program developers on designing and find most value in implementing the standard using a implementing effective GHG programs based on phased approach, with a focus on improving the quality of accepted standards and methodologies. the GHG inventory over time. 1.2 Purpose of the GHG Protocol 1.3 How this standard was developed Product Life Cycle Accounting and In 2008, WRI and WBCSD launched the three-year process Reporting Standard to develop the Product Standard. A 25 member Steering The GHG Protocol Product Life Cycle Accounting and Committee of experts provided strategic direction Reporting Standard (referred to as the Product Standard) throughout the process. The first draft of the Product provides requirements and guidance for companies and Standard was developed in 2009 by Technical Working other organizations to quantify and publicly report an Groups consisting of 112 members representing diverse inventory of GHG emissions and removals2 associated industries, government agencies, academia, and non- with a specific product. The primary goal of this standard profit organizations from around the world. In 2010, is to provide a general framework for companies to make 38 companies from a variety of industry sectors “road informed choices to reduce greenhouse gas emissions tested” the first draft and provided feedback on its from the products (goods or services) they design, practicality and usability, which informed a second draft. manufacture, sell, purchase, or use. In the context of this Members of a Stakeholder Advisory Group (consisting of standard, public reporting refers to product GHG-related more than 1,600 participants) provided feedback on both information reported publicly in accordance with the drafts of the standard. requirements specified in the standard. As awareness about climate change increases and concerns grow, investors are demanding more 1.4 Who should use this standard transparency, and consumers are seeking greater clarity This standard is designed for companies and and environmental accountability. Companies are organizations3 of all sizes in all economic sectors increasingly receiving requests from stakeholders to and in all countries. Companies seeking a better measure and disclose their corporate GHG inventories, understanding of the GHG inventory of products they and these requests often include a company’s products design, manufacture, sell, purchase, or use can benefit and supply chain emissions. Companies must be able to from the use of this standard. Interested users of the understand and manage their product-related GHG risks standard within companies could include staff from if they are to ensure long-term success in a competitive product design, procurement, research and development, business environment and be prepared for any future marketing, energy, environment, logistics, and corporate product-related programs and policies. sustainability departments. Policy makers and GHG programs may also be interested in incorporating the This standard focuses on emissions and removals standard into their policy or program design. generated during a product’s life cycle and does not [05]
- 8. g u id a n c e 1.5 Use of the Product Standard The GHG Protocol Common data is used for product comparison to develop scope 3 Scope 3 and Product The Product Standard is intended to support inventories and product performance tracking of a product’s GHG inventory Standards both take inventories, including and emissions reductions over time. Additional a value chain or life data collected from prescriptiveness on the accounting methodology, such cycle approach to suppliers and other as allocation choices and data sources, are needed GHG accounting. companies in the value for product labeling, performance claims, consumer chain. Since there can and business decision making based on comparison be overlap in data of two or more products, and other types of product collection, companies may find added business value and comparison based on GHG impacts. See section 5.3.2 efficiencies in developing scope 3 and product inventories and Appendix A for more guidance on additional in parallel. specifications needed for comparison. While each standard can be implemented independently, Claims regarding the overall environmental superiority or both standards are mutually supportive. Integrated use equivalence of one product versus a competing product, might include: referred to in ISO 14044 as comparative assertions, are • Applying the Corporate Standard and Scope 3 not supported by the Product Standard. Standard (to determine the company’s total scope 1, scope 2, and scope 3 emissions) , using the results to identify products with the most significant emissions, 1.6 Relationship to the Corporate then using the Product Standard to identify mitigation and Scope 3 Standards opportunities in the selected products’ life cycles The GHG Protocol Scope 3 Standard and GHG Protocol • Using product-level GHG data based on the Product Product Standard both take a value chain or life cycle Standard as a source of data to calculate scope 3 approach to GHG accounting and were developed emissions associated with selected product types simultaneously. The Scope 3 Standard builds on the • Applying the Corporate Standard, Scope 3 Standard GHG Protocol Corporate Standard and accounts for and the Product Standard and using the results to value chain emissions at the corporate level, while the inform GHG-reduction strategies at both the product Product Standard accounts for life cycle emissions at the and corporate levels individual product level. Together, the three standards provide a comprehensive approach to value chain GHG The sum of the life cycle emissions of each of a company’s measurement and management. products, combined with additional scope 3 categories4 (e.g., employee commuting, business travel, and The reporting company’s business goals should drive the investments), should approximate the company’s total use of a particular GHG Protocol accounting standard. corporate GHG emissions (i.e., scope 1 + scope 2 + scope The Scope 3 Standard enables a company to identify 3). In practice, companies are not expected or required the greatest GHG reduction opportunities across the to calculate life cycle inventories for individual products entire corporate value chain, while the Product Standard when calculating scope 3 emissions. enables a company to target individual products with the greatest potential for reductions. The Scope 3 Standard Figure 1.1 illustrates the relationship between the helps a company identify GHG reduction opportunities, Corporate Standard, Product Standard, and Scope 3 track performance, and engage suppliers at a corporate Standard. In this simplified example, a company level, while the Product Standard helps a company meet manufactures one product (Product A). The example the same objectives at a product level. shows how scopes of emissions at the corporate level correspond to life cycle stages at the product level. [06] Product Life Cycle Accounting and Reporting Standard
- 9. CHAPTeR 01 Introduction Figure[1.1] The relationship between the Corporate, Scope 3, and Product Standards for a company manufacturing product A g u i d a n c e upstream scope 1 and 2 downstream scope 3 emissions emissions scope 3 emissions material acquisition distribution product A & pre-processing production & storage use end-of-life scope 1 and 2 emissions required by the Corporate Standard scope 3 emissions required by the Scope 3 Standard product life cycle emissions required by the Product Standard 1.7 Limitations of product GHG inventories endnotes The Product Standard accounts for the GHG emissions 1 IPCC, Summary for Policymakers (Table SPM.5: Characteristics and removals that occur during a product’s life cycle. A of post-TAR stabilization scenarios), in Climate Change 2007: product assessment limited to only GHGs has the benefit Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate of simplifying the analysis and producing results that can Change, ed. B. Metz, O.R. Davidson, P.R. Bosch, R. Dave, L.A. be clearly communicated to stakeholders. The limitation Meyer (Cambridge, United Kingdom and New York, NY, USA: of a GHG-only inventory is that potential trade-offs or co- Cambridge University Press, 2007). benefits between environmental impacts can be missed. 2 In this standard, both emissions to the atmosphere and removals Therefore, the results of a GHG-only inventory should from the atmosphere are accounted for in order to calculate not be used to communicate the overall environmental the total GHG inventory of a product. Removals of CO2 generally performance of a product. Non-GHG environmental occur during photosynthesis. impacts that occur during the life cycle of a product should 3 The term company is used throughout the standard to represent also be considered when making decisions to reduce GHG a company or organization that may use the standard. emissions based on the inventory results. Examples of 4 A scope 3 category is one of 15 types of scope 3 emissions potentially significant non-GHG impacts for some products organized by activities that occur upstream and downstream include ecosystem degradation, resource depletion, ozone from a company’s ownership or control. depletion, and negative human health impacts. Moreover, while this standard focuses solely on GHG emissions and removals, the accounting requirements and guidance provided can be used to collect data for other environmental impacts. Companies wishing to include non-GHG impacts along with their GHG inventory can do so using the same steps and methodologies provided in this standard. [07]
- 10.
- 11. g u id a n c e C ompanies should first identify their business goals before conducting product GHG inventories. Doing so can bring clarity and assist in selecting the appropriate methodology and data to develop the inventory. This standard has been designed as a comprehensive Understanding the location and amount of GHGs in a accounting and reporting framework to enable a product’s life cycle is valuable information when assessing company to gather information to serve all the business a company’s risk exposure from that product. Investors are goals defined below and outlined in table 2.1. becoming more wary of companies that are not evaluating and managing these and other GHG related risks. A company can better model potential future costs of 2.1 Climate change management regulations by using a product inventory to evaluate a Product GHG inventories, performed according to a product’s life cycle GHG risks. For example, completing a consistent framework, provide a quantitative tool to help product inventory can increase understanding of where understand GHG risks along a product’s life cycle. Product there are energy intensive operations in the life cycle. A inventories also can be used to understand emissions company can then use this understanding to inform reductions and cost savings opportunities, as GHG emissions strategies for reducing dependency on fossil fuels, such generally relate to energy use and can be a proxy for as switching to a less energy intensive product material inefficiencies in a product system. The use of product GHG or increasing the use of intermodal transportation for inventories can help product manufacturers avoid the pitfall product distribution. Stakeholders (e.g., investors) may of focusing too heavily on the most proximate or obvious also like to see this risk assessment publicly reported and emission sources associated with a product’s production there is growing demand for mandatory disclosure of while missing major emission reduction and cost-saving GHG risk in some countries. opportunities elsewhere in the life cycle. Performing a product inventory can also be a proactive approach to assessing future risks related to life cycle 2.2 Performance tracking GHG emissions. GHG regulations are already in place Product inventories provide detailed information on in a number of countries and may be enacted in many the relative size and scale of emission sources within life more in the future. Energy is becoming a scarcer cycle stages and across the entire product system. This resource, creating price volatility and reduced reliability. information may be used to identify the largest emission [09]
- 12. g u id a n c e Table [2.1] Business goals served by a product GHG inventory Business goal Description Climate change • Identify new market opportunities and regulatory incentives management • Identify climate-related physical and regulatory risks in a product’s life cycle • Assess risks from fluctuations in energy costs and material availability Performance • Focus efforts on efficiency improvements and cost-saving opportunities through tracking GHG reductions throughout a product’s life cycle • Set product-related GHG reduction targets and develop strategies to achieve goals • Measure and report GHG performance over time • Track efficiency improvements throughout a product life cycle over time Supplier and • Partner with suppliers to achieve GHG reductions customer • Assess supplier performance for GHG aspects of green procurement efforts stewardship • Reduce GHG emissions and energy use, costs, and risks in the supply chain and avoid future costs related to energy and emissions • Launch a customer education campaign to encourage actions that reduce GHG emissions Product • Achieve competitive advantage by pursuing GHG reduction opportunities and differentiation cost savings to create a low-emitting product • Redesign a product to better respond to customer preferences • Strengthen brand image regarding GHG performance • Enhance employee retention and recruitment resulting from pride in product stewardship • Strengthen corporate reputation and accountability through public disclosure sources – or “hot spots” – in the life cycle and focus efforts 10 percent lower life cycle emissions from its most on the most cost effective emissions reduction activities. popular shoe might use a product GHG inventory to determine the most cost effective means of achieving Product GHG inventories, performed according the target, selecting from options such as optimizing to a consistent framework, provide a quantitative the distribution network, using less GHG-intensive performance metric to set targets for improvement, materials, or improving energy efficiency at production track progress. and communicate successes to internal facilities. External uses of the performance results and external stakeholders. External stakeholders, might include communications to regulators, investors, including customers, investors, shareholders and others customers, and local communities, using tools such as are increasingly interested in measured and reported an annual corporate sustainability report. progress in emissions reductions by companies. Therefore, identifying reduction opportunities, setting goals and reporting on progress to stakeholders 2.3 Supplier and customer stewardship may help differentiate a company in an increasingly From raw material vendors to final consumers, product environmentally conscious marketplace. inventories provide an opportunity for companies Internally, product GHG inventories may be used to to engage with stakeholders throughout a product’s support less GHG-intensive product design choices life cycle toward the common goal of reducing GHG and production processes. For example, a shoe emissions. This engagement may also lead to supply manufacturer seeking to meet a company target of chain efficiencies and consequent cost savings, build [10] Product Life Cycle Accounting and Reporting Standard
- 13. CHAPTeR 02 DefiningBusiness Goals stronger supply chain relationships, and uncover 2.4 Product differentiation valuable information that can be shared to help build Product differentiation is a broad term, encompassing positive relationships with product users. For example, all the specific end uses of product GHG inventories a product GHG inventory of a home appliance may show that may help a company distinguish its products in the g u i d a n c e that much of the emissions occur in the use stage. This marketplace and create competitive advantage. For information can provide a platform for the manufacturer example, a company may realize product differentiation to communicate and collaborate with their customers simply by conducting and publicizing a product GHG (e.g., the users of the appliance) to achieve lower product inventory that demonstrates to stakeholders that life cycle emissions. If customers then reduced emissions the brand is concerned with environmental impacts. by reducing electricity use, they would also reap benefits With consumers increasingly concerned about the in the form of electricity cost savings. Another example is environmental impacts of their product choices, product a product inventory of a beverage which shows significant GHG inventories enable companies to communicate emissions from packaging. These results may lead to a with customers about their efforts to assess and reduce partnership with packaging suppliers to reduce packaging their product-related impacts. Products may also be materials or replace them with less GHG-intensive differentiated by advertising that their use can lower content. Reporting on these types of efforts and the consumers’ own GHG emissions (and related energy progress of a company’s engagement with its suppliers expenses). Company efforts to address product emissions can be useful information for stakeholders both external can also be an effective message to communicate to and internal to the reporting company. employees in order to enhance pride in the company’s 1 2 product stewardship and can have positive impacts on 3 employee retention and recruitment. Swire Beverages As one of the Coca-Cola anchor bottlers, Swire Beverages if all retailers installed refrigerators, it would undertakes the manufacture, sale, and distribution of the new refrigerators, save 5 -16 percent Coca-Cola products. The company conducted life cycle of the life cycle GHG it would save GHG studies for nine of the Coca-Cola branded products emissions of drinking produced in mainland China. 4 5 - 16% 5 products depending 6 of the life cycle on their size. The results showed that packaging and refrigeration by retailers were the processes that contributed the most GHG emissions Swire Beverages significant GHG emissions and risks, especially for small- of drinking and Coca-Cola also and medium-sized products. Swire Beverages either products identified packaging leases or sells refrigerators at a discount to retailers. reduction as a key Following completion of the inventory and evaluation climate mitigation of reduction opportunities, the company installed strategy and rolled out a new packaging design for a energy-efficient refrigerator equipment and aggressively bottled water product in China. The new plastic bottle pursued hydrofluorocarbon (HFC) recovery and HFC-free design reduces packaging material weight by 34 percent technologies. The new equipment uses 357 40 percent - and is estimated 8 reduce GHG emissions by 11 percent to 9 less electricity while reducing the usage of HFC-134a, a over the product life cycle. The new design also helps refrigerant with high global warming potential. Swire Swire Beverages to save on the procurement cost of also calculated that if all retailers installed the new packaging materials. [11]
- 14. g u id a n c e 03 Summary of Steps and Requirements [12] Product Life Cycle Accounting and Reporting Standard
- 15. g u id a n c e T his chapter provides a summary of the steps involved in product accounting and reporting, as well as a list of the requirements that must be followed for a product inventory to be in conformance with this standard. 3.1 Standard terminology This standard uses precise language to indicate which “may” is used to indicate an option that is permissible provisions of the standard are requirements, which or allowable. Within the guidance sections, the term are recommendations, and which are permissible or “required” is used to refer to “shall” statements given allowable options that companies may choose to follow. elsewhere in the standard. Also within the guidance The term “shall” is used in this standard to indicate what sections, “needs,” “can,” or “cannot” are sometimes used is required for a GHG inventory to conform with the to provide guidance on implementing a requirement or Product Standard. The term “should” is used to indicate to indicate when an action is or is not possible. a recommendation, but not a requirement. The term Figure [3.1] Overview of steps in product accounting and reporting Define Review Review Define the Set the Collect data business principles funda- scope boundary and assess goals mentals data quality Chapter 2 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Perform Assess Calculate Perform Report Set allocation uncertainty inventory assurance inventory reduction (if needed) results results targets Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 [13]
- 16. r e qu i r e m e n t s 3.2 Overview of steps in product 3.3 Summary of Product Standard accounting and reporting requirements Figure 3.1 provides an overview of the steps taken to Table 3.1 provides a summary of all the requirements perform a product GHG inventory that is in conformance in the Product Standard. Definitions and guidance are with this standard. Each of these steps is described in provided in the following chapters. detail in the following chapters. Table [3.1] Summary of requirements Chapter Requirements 4. Accounting and • GHG accounting and reporting of a product inventory shall follow the principles Reporting Principles of relevance, accuracy, completeness, consistency, and transparency 5. Fundamentals of • A GHG product inventory shall follow the life cycle and attributional approaches Product Life Cycle Accounting 6. Establishing • Companies shall account for carbon dioxide (CO2), methane (CH4), nitrous oxide the Scope of a (N2O), sulfur hexafluoride (SF6), perfluorocarbons (PFCs), and hydrofluorocarbons Product Inventory (HFCs) emissions to, and removals from, the atmosphere • Additional GHGs included in the inventory shall be listed in the inventory report • Companies shall define the product, unit of analysis, and reference flow • For all final products, companies shall define the unit of analysis as a functional unit • For intermediate products where the eventual function is unknown, companies shall define the unit of analysis as the reference flow 7. Boundary Setting • The boundary of the product GHG inventory shall include all attributable processes • Companies shall report the life cycle stage definitions and descriptions • Companies shall disclose and justify any exclusions of attributable processes in the inventory report • Companies shall report attributable processes in the form of a process map • Companies shall report any non-attributable processes included in the boundary • The boundary for final products shall include the complete life cycle, from cradle-to-grave • The boundary of a cradle-to-gate partial life cycle inventory shall not include product use or end-of-life processes in the inventory results • Companies shall disclose and justify when a cradle-to-gate boundary is defined in the inventory report • Companies shall report the time period of the inventory • Companies shall report the method used to calculate land-use change impacts, when applicable 8. Collecting Data • Companies shall collect data for all processes included in the inventory boundary and Assessing • Companies shall collect primary data for all processes under their ownership or control Data Quality • During the data collection process, companies shall assess the data quality of activity data, emission factors, and/or direct emissions data by using the data quality indicators • For significant processes, companies shall report a descriptive statement on the data sources, the data quality, and any efforts taken to improve data quality [14] Product Life Cycle Accounting and Reporting Standard
- 17. CHAPTeR 03 Summaryof Steps and Requirements r e q u i r e m e n t s Table [3.1] Summary of requirements (continued) Chapter Requirements 9. Allocation • Companies shall allocate emissions and removals to accurately reflect the contributions of the studied product and co-product(s) to the total emissions and removals of the common process • Companies shall avoid allocation wherever possible by using process subdivision, redefining the functional unit, or using system expansion • If allocation is unavoidable, companies shall allocate emissions and removals based on the underlying physical relationships between the studied product and co-product(s) • When physical relationships alone cannot be established or used as the basis for allocation, companies shall select either economic allocation or another allocation method that reflects other relationships between the studied product and co-product(s) • Companies shall apply the same allocation methods to similar inputs and outputs within the product’s life cycle • For allocation due to recycling, companies shall use either the closed loop approximation method or the recycled content method as defined by this standard • When using the closed loop approximation method, companies shall report displaced emissions and removals separately from the end-of-life stage • Companies shall disclose and justify the methods used to avoid allocation or perform allocation • When using the closed loop approximation method, companies shall report displaced emissions and removals separately from the studied product’s end-of- life stage inventory 10. Assessing • Companies shall report a qualitative statement on inventory uncertainty and Uncertainty methodological choices. Methodological choices include: • Use and end-of-life profile • Allocation methods, including allocation due to recycling • Source of global warming potential (GWP) values used • Calculation models 11. Calculating • Companies shall apply a 100-year GWP factor to GHG emissions and removals data Inventory Results to calculate the inventory results in units of CO2 equivalent (CO2e) • Companies shall report the source and date of the GWP factors used • Companies shall quantify and report the following: • Total inventory results in CO2e per unit of analysis, which includes all emissions and removals included in the boundary from biogenic sources, non-biogenic sources, and land-use change impacts • Percentage of total inventory results by life cycle stage • Biogenic and non-biogenic emissions and removals separately when applicable • Land-use change impacts separately when applicable • Cradle-to-gate and gate-to-gate inventory results separately or a clear statement that confidentiality is a limitation to providing this information • Companies shall not include the following when quantifying inventory results: weighting factors for delayed emissions; offsets; and avoided emissions • Companies shall report the amount of carbon contained in the product or its components that is not released to the atmosphere during waste treatment, if applicable • For cradle-to-gate inventories, companies shall report the amount of carbon contained in the intermediate product [15]
- 18. r e qu i r e m e n t s Table [3.1] Summary of requirements (continued) Chapter Requirements 12. Assurance • The product GHG inventory shall be assured by a first or third party • Companies shall choose assurance providers that are independent of, and have no conflicts of interest with, the product GHG inventory process • Companies shall report the assurance statement in the inventory report The statement shall include: • The level of assurance achieved (limited or reasonable) including assurance opinion or the critical review findings • Whether the assurance was performed by a first or third party • A summary of the assurance process • The relevant competencies of the assurance providers • How any potential conflicts of interest were avoided for first party assurance 13. Reporting Companies shall publicly report the following information to be in conformance with the GHG Protocol Product Standard: General Information and Scope • Contact information • Studied product name and description • The unit of analysis and reference flow • Type of inventory: cradle-to-grave or cradle-to-gate • Additional GHGs included in the inventory • Any product rules or sector-specific guidance used • Inventory date and version • For subsequent inventories, a link to previous inventory reports and description of any methodological changes • A disclaimer stating the limitations of various potential uses of the report including product comparison Boundary Setting • Life cycle-stage definitions and descriptions • A process map including attributable processes in the inventory • Non-attributable processes included in the inventory • Excluded attributable processes and justification for their exclusion • Justification of a cradle-to-gate boundary, when applicable • The time period • The method used to calculate land-use change impacts, when applicable Allocation • Disclosure and justification of the methods used to avoid or perform allocation due to co-products or recycling • When using the closed loop approximation method, any displaced emissions and removals separately from the end-of-life stage Data Collection and Quality • For significant processes, a descriptive statement on the data sources, data quality, and any efforts taken to improve data quality Uncertainty • A qualitative statement on inventory uncertainty and methodological choices. Methodological choices include: • Use and end-of-life profile • Allocation methods, including allocation due to recycling • Source of global warming potential (GWP) factors used • Calculation models [16] Product Life Cycle Accounting and Reporting Standard
- 19. CHAPTeR 03 Summaryof Steps and Requirements r e q u i r e m e n t s Table [3.1] Summary of requirements (continued) Chapter Requirements 13. Reporting Inventory Results (continued) • The source and date of the GWP factors used • Total inventory results in units of CO2e per unit of analysis, which includes all emissions and removals included in the boundary from biogenic sources, non-biogenic sources, and land-use change impacts • Percentage of total inventory results by life cycle stage • Biogenic and non-biogenic emissions and removals separately, when applicable • Land use impacts separately, when applicable • Cradle-to-gate and gate-to-gate inventory results separately (or a clear statement that confidentiality is a limitation to providing this information) • The amount of carbon contained in the product or its components that is not released to the atmosphere during waste treatment, when applicable • For cradle-to-gate inventories, the amount of carbon contained in the intermediate product Assurance • The assurance statement including: • Whether the assurance was performed by a first or third party • Level of assurance achieved (limited or reasonable) and assurance opinion or the critical review findings • A summary of the assurance process • The relevant competencies of the assurance providers • How any potential conflicts of interests were avoided for first party assurance Setting Reduction Targets and Tracking Inventory Changes • Companies that report a reduction target and/or track performance over time shall include the following: • The base inventory and current inventory results in the updated inventory report • The reduction target, if established • Changes made to the inventory, if the base inventory was recalculated • The threshold used to determine when recalculation is needed • Appropriate context identifying and describing any significant changes that trigger base inventory recalculation • The change in inventory results as a percentage change over time between two inventories on the unit of analysis basis • An explanation of the steps taken to reduce emissions based on the inventory results 14. Setting Reduction Note: Setting a reduction target and tracking inventory changes over time is not Targets and required to claim conformance with the Product Standard. However, if companies Tracking Inventory choose to set a reduction target, the following requirements apply. Changes Over Time To set reduction targets and track inventory changes over time, companies shall: • Develop and report a base inventory that conforms with the requirements of this standard • Recalculate the base inventory when significant changes in the inventory methodology occur and report those changes • Complete and disclose an updated inventory report including the updated results, the base inventory results, and the context for significant changes • Use a consistent unit of analysis to enable comparison and track performance over time [17]
- 20. 04 Principles of Product Life Cycle GHG Accounting and Reporting
- 21. g e qd a rn ec m e n t s r u i u i e 4.1 Introduction T he five accounting principles are intended to underpin all aspects of GHG accounting and reporting for products. Their faithful application should help to ensure that the product inventory constitutes a true and fair representation of its GHG emissions and removals. Their primary function is to guide users in the implementation of this standard, in particular when making accounting choices not specified by the standard. 4.2 Requirements GHG accounting and reporting of a product Consistency inventory shall follow the principles Choose methodologies, data, and assumptions that allow of relevance, accuracy, completeness, for meaningful comparisons of a GHG inventory over time. consistency, and transparency. Transparency Address and document all relevant issues in a Relevance factual and coherent manner, based on a clear audit Ensure that the product GHG inventory accounting trail. Disclose any relevant assumptions and make methodologies and report serves the decision-making appropriate references to the methodologies and data needs of the intended user. Present information in the sources used in the inventory report. Clearly explain any report in a way that is readily understandable by the estimates and avoid bias so that the report faithfully intended users. represents what it purports to represent. Completeness Accuracy Ensure that the inventory report covers all product life Ensure that reported GHG emissions and removals are not cycle GHG emissions and removals within the specified systematically greater than or less than actual emissions boundaries; disclose and justify any significant GHG and removals and that uncertainties are reduced as far emissions and removals that have been excluded. as practicable. Achieve sufficient accuracy to enable intended users to make decisions with reasonable assurance as to the reliability of the reported information. [19]
- 22. 05 Fundamentals of Product Life Cycle GHG Accounting
- 23. g e qd a rn ec m e n t s r u i u i e 5.1 Introduction P roduct life cycle GHG accounting is a subset of life cycle assessment (LCA), which seeks to quantify and address the environmental aspects and potential environmental impacts throughout a product’s life cycle from raw material extraction through to end-of-life waste treatment.1 LCA became internationally standardized by the International Organization for Standardization (ISO) with the publication of the 14040 series of life cycle assessment standards. In 2008, the British Standards Institution (BSI), in partnership with the UK Department of Environment Food and Rural Affairs (DEFRA) and the Carbon Trust, published a Publicly Available Specification (PAS) for the assessment of life cycle greenhouse gas emissions of goods and services, known as PAS 2050.2 The Product Standard builds on the framework and 5.2 Requirements requirements established in the ISO LCA standards (14040:2006, Life Cycle Assessment: Principles and A GHG product inventory shall follow the Framework and 14044:2006, Life Cycle Assessment: life cycle and attributional approaches. Requirements and Guidelines) and PAS 2050, with the intent of providing additional specifications and guidance to facilitate the consistent quantification and public Product GHG inventories,4 also commonly known as reporting of product life cycle GHG inventories. Other product carbon footprints, are a subset of LCA because standards and publications such as the ILCD Handbook3 they focus only on the climate change impact category were also used as reference during the development (the limitations of which are discussed in chapter 1). of this standard. The following sections clarify the However, the accounting methodologies and requirements relationship between the ISO LCA framework and the presented in this standard follow the life cycle approach as Product Standard while identifying two fundamentals on established by ISO LCA standards 14040 and 14044. which the Product Standard is based: the life cycle and attributional approaches to GHG accounting. [21]
- 24. r e qu i r e m e n t s The requirements and guidance in this standard follow Box [5.1] The consequential approach the attributional approach to life cycle accounting. The attributional approach is defined as a method in In addition to the attributional approach, another which GHG emissions and removals are attributed to method of life cycle accounting is the consequential the unit of analysis of the studied product by linking approach. The consequential approach is defined as an together attributable processes along its life cycle.5 approach in which processes are included in the life cycle The attributional approach makes use of primary data boundary to the extent that they are expected to change provided by a supplier/customer or average (secondary) as a consequence of a change in demand for the unit of data for a given process. Explanation of the terms unit analysis.6 The consequential approach makes use of data of analysis, attributable processes, and primary data are that is not constrained and can respond to changes in given in chapter 6, chapter 7, and chapter 8, respectively. demand (e.g., marginal technology information), where change in demand can occur as a result of changes in production volumes, production technologies, public policies, and consumer behaviors. Although not followed in this standard, the consequential approach can provide valuable insight in certain applications such as evaluating reduction projects or making public policy decisions. [22] Product Life Cycle Accounting and Reporting Standard
- 25. CHAPTeR 05 Fundamentalsof Product Life Cycle GHG Accounting 5.3 Guidance 5.3.1 Phases and steps of a GHG inventory step in identifying what data are needed by determining The ISO LCA standards define four phases of a LCA attributable processes, but data collection limitations study: the goal and scope definition, inventory analysis, (as defined in chapter 8) may result in excluding some g u i d a n c e impact assessment, and interpretation. To report the processes from the inventory results and justifying results of an LCA study, ISO also defines critical review those exclusions in the inventory report. Applying the and reporting as additional steps. Figure 5.1 shows the principles of this standard and clearly setting business general relationship between the ISO LCA phases of an goals will help companies ensure that the decisions taken LCA study defined by ISO and the steps to complete a while conducting the inventory and interpreting the final GHG inventory in conformance with this standard. results are relevant to those goals. The life cycle approach is by nature an iterative 5.3.2 Use of product rules and sector guidance technique, where each phase or step is dependent on As mentioned in chapter 1, product comparisons, the results or methodologies used in another (previous beyond tracking product performance over time, or subsequent) phase or step. For example, defining need additional specifications to ensure consistent the unit of analysis (as defined in chapter 6) is a step application of this standard for a product or product that directly impacts the subsequent steps of boundary category. These specifications are provided within a setting, data collection, and allocation. However, a product rule. A product rule is a document created by company may find that to avoid allocation (as defined a group of stakeholders with an interest in a particular in chapter 9) they need to redefine the unit of analysis. product or product category and the goal of building Likewise, setting the boundary (chapter 7) is the first consensus on the additional specifications needed to Figure [5.1] Comparison between the phases of an ISO LCA study and the steps of a Product Standard GHG inventory Phases in an Steps in a product standard GHG inventory The life cycle ISO LCA study approach is by business goals (chapter 2) nature an iterative principles (chapter 4) goal and scope definition fundamentals of product life cycle accounting (chapter 5) technique, where defining the scope (chapter 6) each phase or step is dependent boundary setting (chapter 7) inventory analysis (LCI) data collection and quality assessment (chapter 8) on the results or allocation (chapter 9) methodologies used in another (previous or subsequent) impact assessment calculating inventory results (chapter 11) phase or step. uncertainty (chapter 10) interpretation performance tracking (chapter 14) reporting (chapter 13) reporting & critical review assurance (chapter 12) (when applicable to the reporting (chapter 13) goal and scope) [23]
- 26. g u id a n c e enable comparisons or declarations about the product. Sector guidance is typically created by a group of An example is a product category rule (PCR) as defined stakeholders and sector representatives convened to by ISO 14025:2006. Appendix A includes details on what build consensus on guidance for performing a product specifications are needed in a product rule to enable GHG inventory within their sector, but without the goal of different types of comparisons and gives some guidance enabling product comparison. on creating product rules. While using product rules and sector guidance is not required for conformance with this standard, each provides Table [5.1] Sector guidance and product rule specifications Inventory step Sector guidance and product rule specifications Chapter 6: • Choosing a studied product (in sector guidance) Establishing • Choosing a unit of analysis (functional unit) the Scope • Identifying whether a cradle-to-gate inventory is appropriate • Identifying any additional GHGs that are applicable to the product or sector Chapter 7: • Life cycle stage definitions and descriptions Boundary Setting • Specific attributable processes • Relevant non-attributable processes • Justified excluded attributable processes (including insignificance threshold) • Use and end-of-life profiles • Time period • Method used to calculate land-use change impacts Chapter 8: • Type of primary data to collect for processes under the reporting company’s control Collecting Data and • Processes not under the reporting company’s ownership/control where primary Assessing Data Quality data should be collected • Secondary data sources and default data values Chapter 9: • Allocation method and appropriate allocation factor Allocation • Recycling allocation method Chapter 10: • Default uncertainty values Assessing Uncertainty • Likely sources of uncertainty Chapter 11: • The GWP values to use Calculating • Default emission factors Inventory Results Chapter 12: • The type of assurance to perform Assurance Chapter 13: • Optional reporting elements that would be beneficial to stakeholders Reporting • Additional requirements due to communication type (e.g., label) Chapter 14: • The base inventory to set Setting Reduction • Definition of changes that would warrant base inventory recalculation Targets and Tracking Inventory Changes [24] Product Life Cycle Accounting and Reporting Standard
- 27. CHAPTeR 05 Fundamentalsof Product Life Cycle GHG Accounting additional specifications that can be useful to companies endnotes as they prepare their inventories. Table 5.1 provides some 1 International Organization for Standardization, ISO 14044:2006, examples of additional specifications for key inventory Life Cycle Assessment: Requirements and Guidelines. Geneva. steps. For definitions and explanations of terms included in 2 British Standards Institution et al. PAS 2050:2008: Specification g u i d a n c e for the assessment of life cycle greenhouse gas emissions of the table please see the respective chapters. goods and services. Companies using sector guidance and product rules 3 European Commission - Joint Research Centre - Institute for still need to abide by the requirements of the Product Environment and Sustainability, International Reference Life Standard. For example, companies may use a product Cycle Data System (ILCD) Handbook - General guide for Life Cycle rule to help choose an allocation method as long as the Assessment - Detailed guidance. First edition, March 2010. method is in conformance with chapter 9 and performed Luxembourg: Publications Office of the European Union, 2010. 4 In the Product Standard, a completed GHG assessment is called using the attributional approach (e.g., primary supplier or a GHG inventory to be consistent with corporate-level GHG average data). Companies may not use sector guidance accounting. The GHG inventory includes both the collection of or product rules to exclude attributable processes data and the calculation of the global warming impact. This is without justification. Any sector guidance or product rules different from the ISO LCA terminology which defines inventory used during the inventory process are disclosed in the as only the collection of data. inventory report following the reporting requirements 5 Adapted from UNEP and SETAC, Global Guidance Principles for Life (chapter 13). Cycle Assessment Databases. 2011. 6 Adapted from UNEP and SETAC, Global Guidance Principles for Life Product rules and sector guidance should be developed Cycle Assessment Databases. 2011. through an inclusive multi-stakeholder process to ensure broad acceptance and facilitate increased consistency and credibility. Guidance and tools in conformance with the Product Standard can be found at (www.ghgprotocol.org). [25]
- 28. 06 establishing the Scope of a Product Inventory
- 29. g e qd a rn ec m e n t s r u i u i e 6.1 Introduction A well-defined scope1, aligned with the five accounting principles and the company’s business goals, can help ensure the final inventory meets the company’s and stakeholder’s needs. In addition to identifying which GHGs to account for, establishing the inventory scope involves choosing a product, defining the unit of analysis, and identifying the reference flow. Specific requirements and guidance are detailed in this chapter. 6.2 Requirements Companies shall account for carbon Removals from the atmosphere typically occur when CO2 dioxide (CO2 ), methane (CH4 ), nitrous is absorbed by biogenic sources (i.e. plants) and converted oxide (n2O), sulfur hexafluoride to energy during photosynthesis. However, removals (SF6 ), perfluorocarbons (PFCs), and may also occur when a product absorbs atmospheric CO2 hydrofluorocarbons (HFCs) emissions during use, or when CO2 from the atmosphere is used to, and removals from, the atmosphere. during a processing step. Companies shall also account Additional GHGs included in the inventory for all removals of CO2 from the atmosphere if they are shall be listed in the inventory report. removed during the product’s life cycle. Companies shall account for these six gases in their Companies shall define the studied product, product GHG inventory if they are emitted during unit of analysis, and reference flow. the product’s life cycle. Companies should account for any other GHGs whose 100-year GWP values have The studied product is the product on which the GHG life been identified by the IPCC if they are emitted during cycle inventory is performed. the product’s life cycle.2 Any additional GHGs that are accounted for shall be listed in the inventory report to improve transparency. [27]
- 30. r e qu i r e m e n t s The unit of analysis is defined as the performance For intermediate products where the characteristics and services delivered by the product eventual function is unknown, companies being studied. The reference flow is the amount of shall define the unit of analysis as the product on which the results of the study are based. reference flow. Intermediate products are goods that are used as inputs For all final products, companies shall define in the production of other goods and services. For the unit of analysis as a functional unit. example, a plastic resin that is eventually transformed into plastic car parts is an intermediate product. Final products are goods and services that are ultimately In general, an intermediate product is a good that consumed by the end user rather than used in the eventually becomes a material input into the life cycle of production of another good or service. Since the function a final product. Therefore, the service an intermediate of a final product is known, companies shall define product fulfills is often dependent on the final product’s the unit of analysis as a functional unit. The functional function. When that function is unknown to the company unit, like unit of analysis, is defined as the performance performing a GHG inventory on an intermediate product, characteristics and services delivered by the product it is not always possible to define the unit of analysis as being studied. A defined functional unit typically includes the functional unit. In this case, companies shall define the function (service) a product fulfills, the duration the unit of analysis for an intermediate product as the or service life (amount of time needed to fulfill the reference flow or amount of product being studied. function), and the expected quality level. [28] Product Life Cycle Accounting and Reporting Standard
- 31. CHAPTeR 06 establishingthe scope of a product inventory 6.3 Guidance 6.3.1 Choosing the studied product If it is still unclear through screening exercises and further A review or screening exercise of all the products a evaluation which product to choose, companies should company produces, distributes, buys, or sells3 is the opt for a product with the largest anticipated strategic g u i d a n c e first step to identifying an individual product to study. impact and GHG reduction potential in the life cycle. Companies should pick a product that is GHG intensive 6.3.2 Defining the unit of analysis as well as strategically important and aligned with their Defining the unit of analysis is a critical step in completing business goals. a GHG inventory because it directly influences the The results of a corporate GHG inventory following the subsequent steps and results of the inventory. For example: Corporate and Scope 3 Standards can be used to easily • The duration/service life is the basis for the product’s identify products or product categories that are GHG use profile during boundary setting (chapter 7) intensive. If this inventory is not available, companies • The reference flow is the basis for all data collection may use environmentally extended input-output (EEIO) since it defines the magnitude of material or energy tables to estimate the GHG intensity of products based inputs and outputs (chapter 8) on economic transactions. (See chapter 8 for more • A well-defined unit of analysis can avoid allocation information on EEIO tables.) If neither is available, by including the studied product and co-products companies may use physical or economic factors to rank together (chapter 9) products by mass, volume, or spend. This option is least • The unit of analysis is the basis on which the inventory preferred because physical or economic factors alone may results are reported, and therefore a transparent unit not correlate with GHG intensity. of analysis is important to ensure inventory results are Companies may decide to further evaluate a group interpreted and used correctly (chapters 11 and 13) of products in more detail. This further evaluation The following sections provide guidance on defining a may include looking deeper into where reductions product’s function, functional unit, and reference flow, could occur along the product’s life cycle, evaluating as well as defining the unit of analysis for intermediate the company’s potential influence on suppliers and products and services. customers, researching Companies should pick supplier relationships Identifying the function a product that is GHG and potential for The function is the service a product provides. When intensive as well as engagement, and the function is known (i.e., for final products and some strategically important ranking products intermediate products), the unit of analysis is the and aligned with their based on the ability functional unit. Some questions a company may ask to for marketplace help identify a product’s function include: business goals. differential. Companies • Why is the product created? may consult with their • What purpose does the product serve? product design and/or research and development teams • What defining characteristics or expected level of to choose a product for which potential reductions quality does the product have? could be met through innovation such as design, material, or manufacturing advancements. Or they may For example, if the studied product is a light bulb, the choose a new or emerging product still in prototype product is created for the purpose of providing light. or conceptual stage where GHG reductions could be The amount of service (e.g., light) that the light bulb achieved during the product design and implementation provides depends on characteristics such as the amount stages of development. of luminance and spectrum. In many cases, a product can have several functions; in this step, companies should identify all functions before selecting one to serve as the basis of the functional unit. [29]
- 32. g u id a n c e Selecting the function(s) amount of product; or define the functional unit first If multiple functions are identified, companies should and then determine the amount of product needed to base the functional unit on the function(s) that best fulfill it. When defining the functional unit first, it is often reflects what the studied product was designed to do. helpful to base the parameters on product rules, sector For example, paint fulfills the function of providing wall guidance, or industry average use-profiles. On the other color and surface protection. If the goal of the company hand, the reference flow may be defined first to specify is to design paint with longer-lasting color that doesn’t an amount of product included in the study. This could have to be reapplied as frequently, that is the function be an individual product, bulk packaging of a product, or on which the functional unit should be based. More than government- or industry-regulated product specifications one function can be represented in a functional unit if (e.g., government-recommended serving sizes for food applicable to the goal of the company. products). It is helpful to consider which criterion would be most meaningful to the user of the report. For Defining the functional unit and reference flow example, a functional unit that requires half a product A well-defined functional unit consists of three general may be hard for a consumer to understand. parameters: the magnitude of the function or service; the duration or service life of that function or service; and the To report efficiency improvements of a product over time, expected level of quality. Although not all parameters companies should define the functional unit so that, as may be relevant for all products (or some parameters may improvements are made, the reference flow needed to be mutually exclusive), considering them helps to ensure fulfill the same functional unit decreases. Consider, for a robust functional unit definition and makes subsequent example, a laptop computer for which the functional inventory steps easier, such as defining the use profile unit is average daily use over a 3-year lifetime and the during boundary setting. reference flow includes two batteries that each have a 1.5-year useful life. Extending the battery life will reduce the There are two approaches to defining the functional reference flow in subsequent inventories. (See chapter 14 unit and reference flow: define the reference flow first for more information on performance tracking over time.) and then determine the functional unit based on the ecolab Ecolab, the global leader in cleaning, sanitizing, food The reference flow was defined as the total pounds of safety, and infection prevention products and services, product required to fulfill the function, namely: performed a GHG inventory on the life cycle of their • 500 racks per day of dishes washed at a typical location APEXTM automatic warewashing system. Ecolab selected with 360 operating days per year the function as the delivery of clean and sanitized dishes • 1800 parts per million (ppm) average detergent through an automatic dish machine, which included concentration within the dish machine (steady-state the necessary individual functions that the APEXTM assumption) warewashing system provides (APEXTM Power, APEXTM • 0.15 grams of rinse additive per rack of dishes Rinse Additive, and APEXTM Presoak). They chose the • 4000 ppm presoak concentration, dispensed twice per day magnitude and duration of the function as its use in a typical food service facility for one year and set the By defining a detailed functional unit – considering all expected level of quality as “clean and sanitized,” functions, quality, magnitude, and duration – Ecolab was which requires 180 °F water during use. able to quickly and accurately define their reference flow. Additionally, the information collected about the use of Using this information, the functional unit was defined as the product was used during boundary setting (chapter 7) delivering clean and sanitized dishes through an automatic to easily define the use profile. dish machine in a typical food service facility for one year. [30] Product Life Cycle Accounting and Reporting Standard
- 33. CHAPTeR 06 Establishingthe Scope of a Product Inventory g u i d a n c e In some cases, a company produces one product in provides meaningful GHG inventory results. This could multiple varieties (e.g., different flavors or colors). When be a single product or the amount or weight of a typical the variation does not have an impact on GHG inventory shipment of product (for example, a box of 50 units or results (chapter 11), companies may define the functional a slab of 100 kilograms) depending on the size of the unit broadly enough so that the GHG inventory report product and the relative GHG emissions and removals is applicable to all product variations. If the functional associated with its acquisition and production. unit and subsequent inventory results are applicable to 6.3.4 Defining the unit of analysis for services several product variations, this should be noted in the Defining the unit of analysis for a service should follow the inventory report. same general procedure outlined in this chapter. As with 6.3.3 efining the unit of analysis for D a good, the magnitude, duration, and quality parameters intermediate products may be based on sector or product rules, industry average Intermediate products are used as inputs into final data, or a company-specific reference flow. For example, a products, and the company performing the GHG home insurance company may define their functional unit inventory on an intermediate product may or may not as the provision of premium home insurance coverage for know the function of the final product. For example, a one year. The magnitude and quality of the insurance is steel bar has many uses and therefore the specific end specific to the definition of “premium.” use may be unknown to a steel producing company. On the other hand, a producer of a specialized intermediate product that is manufactured for a specific use will likely endnotes know the function of the final product. When the function 1 The product inventory scope is different from the concept of of the final product is known, companies should define scopes as used in the Corporate and Scope 3 Standards. the unit of analysis as a functional unit. 2 A full list of long-lived GHGs is available in table 2.14 of the IPCC Fourth Assessment Report, 2007. For intermediate products where the function of the final 3 Whether the studied product is produced, distributed, or sold product is unknown, the unit of analysis is the reference by the reporting company depends on the company’s position in flow. A general rule of thumb when defining a reference the product’s life cycle. For example, a manufacturing company flow without a functional unit is to use a value that screens products they produce, while a retail company screens products they buy and sell. More guidance is available in chapter 7. [31]
- 34.
- 35. g e qd a rn ec m e n t s r u i u i e 7.1 Introduction T he next step in the inventory process is to define the boundary. The boundary identifies which emissions and removals are included in the GHG inventory. During boundary setting, companies should complete the following steps: • Identify the attributable processes along the life cycle that are directly connected to the studied product and its ability to perform its function • Group the attributable processes into life cycle stages • Identify the service, material, and energy flows needed for each attributable process • Illustrate the product’s life cycle processes through a process map The following sections include requirements and guidance to help companies define the boundary of the inventory. 7.2 Requirements (e.g., fertilizers and lubricants), and energy used to move, The boundary of the product GHG inventory create, or store the product. shall include all attributable processes. An inventory consists of service, material, and energy Companies shall report the life cycle stage flows that become the product, make the product, and definitions and descriptions. carry the product through its life cycle. These are defined as attributable processes. Examples include the studied Interconnected stages make up a product’s life cycle, product’s components and packaging, processes that and these are a useful way to organize processes, data create the product, materials used to improve its quality collection, and inventory results. The standard identifies [33]
- 36. r e qu i r e m e n t s Figure [7.1] The five stages of a product life cycle (simplified for illustrative purposes) nature nature material acquisition & pre-processing material acquisition & pre-processing production distribution production & storage use distribution & storage end-of-life use returned to recycled/reused into nature another product life cycle end-of-life end of life five general life cycle stages, which are illustrated in Attributable processes may be excluded from the figure 7.1 and referred to throughout the standard. inventory if all of the following are true: Companies may elaborate or classify the stages differently to • A data gap exists because primary or secondary data better reflect a specific product’s life cycle. For example, cannot be collected a company may want to disaggregate into more stages (such • Extrapolated and proxy data cannot be determined to as separating distribution from storage) or use a term that fill the data gap better describes the processes taking place within the stage, • An estimation determines the data are insignificant such as service delivery when the studied product is a service. Definitions of data types and guidance on filling data gaps All stages should have clear and logical boundaries and be are included in chapter 8. consecutive and interlinked throughout the life cycle. Companies shall disclose and justify any exclusions of attributable processes in the inventory report. This should Companies shall disclose and justify any include a description of the estimation technique used exclusions of attributable processes in the and the insignificance threshold defined. inventory report. [34] Product Life Cycle Accounting and Reporting Standard
- 37. CHAPTeR 07 BoundarySetting g e q d a rn ec m e n t s RSA Companies shall report attributable processes in the form of a process map. RSA, one of the used the results to world’s leading identify where Companies shall include a process map in their inventory e multinational significant GHG report. A process map illustrates the services, materials, insurance groups, and energy needed to move a product through its emissions arose in delivers services in lifecycle. If specific details are considered confidential, a the insurance process r u i u i over 130 countries. company may create a simplified version for the report. RSA performed a At a minimum, the reported process map should identify GHG inventory on their MORE TH>N® home insurance the following items: policy. The MORE TH>N® home insurance policy covers • The defined life cycle stages building and contents against damage, loss, or theft. • The generalized attributional processes in each stage They defined the unit of analysis as the provision of an • The flow of the studied product through its life cycle insurance policy for a period of one year. Recognizing • Any attributable processes excluded from the the need to build on the general stages for a service inventory such as insurance, RSA adopted the following life cycle stages for their inventory: A company should create a detailed process map for internal use and assurance, as it serves as the basis for • Customer requesting a quote data collection. • RSA providing a quote • RSA setting up the policy and any subsequent An example of a minimal process map to be reported for amendments the cradle-to-grave inventory of a car is given in figure 7.2. • RSA sending correspondence throughout the period of coverage Companies shall report any non-attributable • RSA servicing claims throughout the period of coverage processes included in the boundary. RSA then grouped their attributable processes by life cycle stage, and used the results to identify where Some service, material, and energy flows are not directly significant GHG emissions arose in the insurance connected to the studied product during its lifecycle process. This, in turn, underpins ongoing GHG- because they do not become the product, make the reduction work with suppliers. product, or directly carry the product through its life cycle. These are defined as non-attributable processes. [35]
- 38. r e qu i r e m e n t s Figure [7.2] Sample process map for a car (cradle-to-grave inventory) material acquisition distribution & pre-processing production & storage use end-of-life e pre-processing of flat m e rolled steel car e part e pre-processing of plastics m manufacturing car (20 types) retail e car e use e pre-processing car of paint m e e dismantling car car assembly shipment e e pre-processing m shredding of lubricants e m e pre-processing e energy inputs movement of material through the lifecycle of proprietary m material inputs disposal* attributable processes goods * Recycling of parts is not included in this simplified example Examples include service, material, and energy flows The boundary for final products shall include due to: the complete life cycle, from cradle-to-grave. • Capital goods (e.g., machinery, trucks, infrastructure) • Overhead operations (e.g., facility lighting, air The boundary for final products shall include the cradle- conditioning) to-grave removals and emissions from material acquisition • Corporate activities and services (e.g., research and through to end-of-life. development, administrative functions, company sales For intermediate products, if the function of the and marketing) corresponding final product is known, companies should • Transport of the product user to the retail location complete a cradle-to-grave inventory. • Transport of employees to and from works Companies are not required to include non-attributable The boundary of a cradle-to-gate partial processes. However, if non-attributable processes are life cycle inventory shall not include final included in the boundary, companies shall disclose this in product use or end-of-life processes in the the inventory report. inventory results. Companies shall disclose and justify when a cradle-to-gate boundary is defined in the inventory report. [36] Product Life Cycle Accounting and Reporting Standard
- 39. CHAPTeR 07 BoundarySetting r e q u i r e m e n t s If the function of the final product for which the attributable processes associated with agricultural and intermediate product is an input is not known, a forestry practices such as growth, fertilizer application, cradle-to-gate boundary is defined. Cradle-to-gate is a cultivation, and harvesting. For example, rice cultivation partial life cycle inventory, including all emissions and produces CH4 emissions that would be included as a material removals from material acquisition through to when the acquisition impact in the inventory of a rice product. intermediate product leaves the reporting company’s The second contributory aspect of land use is land-use gate (typically immediately following its production) and change. Land-use change impacts may be attributable excluding final product use and end-of-life. If a cradle-to- to the studied product’s material acquisition and gate boundary is defined, companies shall disclose this preprocessing stage, including: in the inventory report. • Biogenic CO2 emissions and removals due to carbon stock change occurring as a results of land conversion Companies shall report the time period within or between land use categories of the inventory. • Biogenic and non-biogenic CO2, N2O, and CH4 emissions resulting from the preparation of converted land, such The time period of the inventory is the amount of time as biomass burning or liming1 a studied product takes to complete its life cycle, from when materials are extracted from nature until they are Guidance on determining when land-use change returned to nature at the end-of-life (e.g., incinerated) impacts are attributable to the studied product is given or leave the studied product’s life cycle (e.g., recycled). in Appendix B. The appendix also includes methods to Non-durable goods, like perishable foods or fuels, typically calculate land-use change impacts for two situations: have a time period of one year or less. Durable goods, when the specific land from which the product or product such as computers, cars, and refrigerators, will typically component originates is known and when it is not have a time period of three years or more. known. When land-use change impacts are attributable, companies shall include these in the boundary and Companies shall report the time period of the total disclose the calculation method in the inventory report. inventory. The time period should be based on scientific evidence to the extent possible, and sector guidance or Indirect land-use change2 is defined as land-use change product rules may be a source of this information when that occurs when the demand for a specific land use (e.g., available. If known science, sector guidance, or product an increased demand for crops as a bioenergy feedstock rules do not exist, companies should assume a minimum in the United States) induces a carbon stock change on time period of 100 years including the end-of-life stage other land (e.g., increased need for cropland in Brazil (i.e., the time period cannot exclude end-of-life if the use causing deforestation). This displacement is a result stage is more than 100 years). of market factors and calculated using data consistent with a consequential approach. Therefore, the inclusion of indirect land-use change is not a requirement of this Companies shall report the method used standard. (See chapter 5 for more information on the to calculate land-use change impacts, consequential versus attributional approach to life cycle when applicable. GHG inventories.) However, if indirect land-use impacts can be calculated and are determined to be significant for For studied products whose life cycle includes biogenic a given product, the magnitude of the impacts should be materials, land use is reflected in two aspects of the reported separately from the inventory results. inventory. One is through emissions and removals from [37]
- 40. g u id a n c e 7.3 Guidance 7.3.1 D efining life cycle stages and identifying Material acquisition and preprocessing attributable processes The material acquisition and preprocessing stage starts The perspective of a company influences the life cycle when resources are extracted from nature and ends when stage boundaries and definitions. The following guidance the product components enter the gate of the studied provides examples of life cycle stage boundaries, product’s production facility. Other processes that may descriptions, and attributable processes from the occur in this stage include recycled material acquisition, perspective of a company that is performing an inventory processing of materials into intermediate material inputs on a final product they produce or sell. (preprocessing), and transportation of material inputs to the production facility. Transportation may also occur Box [7.1] The role of perspective in product between processes and facilities within the stage, such as GHG accounting the transport of coal by trucks within a coal mining facility or the transport of a petrochemical from the refinery to a preprocessing facility. Examples of attributable processes Multiple entities are involved in the production, may include: distribution, use, and end-of-life of products – including raw material suppliers, manufacturers, distributors, Box [7.2] GHG removals retailers, consumers, etc. Each entity has a different perspective along the life cycle of a given product. Depending on an entity’s position in the life cycle, During boundary setting, it is important to document a portion of the product’s life cycle emissions and attributable processes for which GHG removals from removals occurs prior to their involvement, while the the atmosphere may occur to ensure removal data are remainder occurs subsequent to their involvement. collected later in the inventory process. Figure 7.3 is an example of a company that sells a final The amount of removal calculated for materials of product called a widget. In this example, all material biogenic origin should only reflect the amount of acquisition and material processing occurs prior to carbon contained, or embedded, in that material. For the company’s involvement in the product’s life cycle. example, if a product requires 50 tons of wood input Figure 7.4 is an example of a company that produces that is 50 percent carbon, 25 tons of carbon removal is an intermediate product to be used in the production assumed. To convert carbon to CO2, the tons of carbon of the widget. In this example, widget production are multiplied by the ratio of molecular weights of occurs subsequent to the company’s involvement in CO2 (44) and carbon (12), respectively. Removals the product’s life cycle. Understanding a company’s and emissions due to land-use change or other stock perspective within the life cycle of the studied product changes associated with the use of biogenic materials is important as it influences the definition of life cycle are accounted for as land-use change impacts and are stages, data collection requirements, and supplier defined in Appendix B. engagement opportunities. Figure [7.3] Perspective of a company producing a final product material material widget widget widget widget acquisiton processing production distribution use disposal [38] Product Life Cycle Accounting and Reporting Standard
- 41. CHAPTeR 07 BoundarySetting product and ends when the finished studied product leaves the production gate. Site and gate are figurative terms, as a product may go through many processes and corresponding intermediate facilities before exiting g u i d a n c e the production stage as a finished product. Processes associated with co-products or the treatment of wastes formed during production may also be included in this stage. Examples of attributable processes may include: • Physical or chemical processing • Manufacturing • Transport of semi-finished products between manufacturing processes • Assembly of material components • Preparation for distribution, e.g., packaging • Treatment of waste created during production Product distribution and storage The product distribution and storage stage starts when the finished studied product leaves the gate of the • Mining and extraction of materials or fossil fuels production facility and ends when the consumer takes • Photosynthesis (e.g., removal of CO2 from the possession of the product. Several legs of distribution atmosphere) for biogenic materials and storage may occur for one product, such as storage • Cultivation and harvesting of trees or crops at a distribution center and a retail location. Examples of • Application of fertilizer attributable processes may include: • Preprocessing of material inputs to the studied product, such as: • Distribution center or retail location operations • Chipping wood including: • Forming metals into ingots • Receipt • Cleaning coal • Put away • Conversion of recycled material • Heating/refrigeration • Preprocessing of intermediate material inputs • Shipping transportation • Transportation to the production facility and within • Transportation between storage locations extraction and preprocessing facilities Product use Production The use stage begins when the consumer takes possession The production stage starts when the product of the product and ends when the product is discarded components enter the production site of the studied for transport to a waste treatment location. The type Figure [7.4] Perspective of a company producing an intermediate product material material pre- widget widget widget widget acquisiton production distribution use disposal processing [39]
- 42. g u id a n c e and duration of attributable processes in the use stage • Incineration and sorting of bottom ash depends heavily on the function and service life of the • Land filling and landfill maintenance product. For products that consume energy to fulfill their Requirements and guidance for end-of-life recycling are function, attributable processes in the use stage and their available in chapter 9. corresponding emissions may account for the largest fraction of impacts over the complete life cycle. Examples For a service, the production and use stage may be of attributable processes may include: combined into the service delivery stage. This stage encompasses all operations required to complete a • Transportation to the use location (e.g., consumers service. For example, in the case of home appliance repair, driving to their residences) attributable processes may include driving to the home, • Refrigeration at the use location assessing the appliance, ordering or picking up parts, and • Preparation for use (e.g., microwaving) returning to complete the final repair. All material flows • Use (e.g., power consumption) (e.g., parts needed for the repair), energy flows (e.g., fuel • Repair and maintenance occurring during usage time3 to deliver the service person and/or parts), and end-of- end-of-life life considerations of materials and wastes make up the The end-of-life stage begins when the used product is attributable processes along the service life cycle. discarded by the consumer and ends when the product 7.3.2 Developing a process map is returned to nature (e.g., incinerated) or allocated to Developing a process map is an important requirement another product’s life cycle (e.g., recycled). Because when completing an inventory, since processes and the main attributable process in the end-of-life stage flows identified in the process map are the basis for is the method used to treat the product (land filling, data collection and calculation. Companies may use the incineration, etc.), companies need to know or assume following steps: the fate of the product to map this stage. Examples of attributable processes may include: 1. Identify the defined life cycle stages at the top of the map, from material extraction through to end-of-life • Collection and transport of end-of-life products and (or production for cradle-to-gate inventories) packages • Waste management 2. Identify the position on the map where the studied product • Dismantling of components is finished, and exits the reporting company’s gate • Shredding and sorting [40] Product Life Cycle Accounting and Reporting Standard
- 43. CHAPTeR 07 BoundarySetting 3. Identify component inputs and upstream processing For a cradle-to-gate inventory, the use of the product steps necessary to create and transport the finished is unknown and therefore the process map ends when product, aligning the processes with the appropriate the studied product is a finished intermediate product, life cycle stage typically when it leaves the production stage. g u i d a n c e 4. Identify the energy and material flows associated with 7.3.3 Identifying attributable processes each upstream process, including inputs that directly in the use and end-of-life stages impact the product’s ability to perform its function Companies need to make assumptions about the specific (e.g., fertilizers, lubricants) and outputs such as waste attributable processes used to create, distribute, and sell and co-products the studied product as they develop their process map. Because the way a product is used (often referred to 5. For cradle-to-grave inventories, identify the as the use profile) can vary significantly between users, downstream processing steps and energy and material companies often find it difficult to determine attributable flows needed to distribute, store, and use the studied processes for the use stage. product The first step is to look at the functional unit definition 6. For cradle-to-grave inventories, identify the energy for the product. The defined function, as well as the and material inputs needed for the end-of-life of the duration and quality of service provided by the product, studied product should help identify the use profile processes. Because Figure 7.5 illustrates the steps to develop a process map the service life does not always correspond directly to with a generic, simplified cradle-to-grave inventory. the use profile, companies should assume a profile that most accurately represents the use of their product while Figure [7.5] Illustrative steps to developing a process map for a company that produces a final product material acquisition distribution & pre-processing production & storage use end-of-life e energy inputs movement of material through the lifecycle processing m material inputs attributable processes of component A material m e e e e input A production distribution use end-of-life process process process process material input B m processing Step [1] Identify the defined life cycle stages of component B Step [2] Identify the studied product leaving the production gate Step [3] Identify component inputs and upstream processes Step [4] dentify directly connected energy and material flows I Step [5+6] Identify downstream processes and energy/material flows [41]
- 44. g u id a n c e abiding by the attributional approach of the standard as TAL well as the data collection requirement that specific data be used whenever possible. This could be data collected TAL Apparel is a major from customer surveys, when available, or data based on apparel manufacturer with industry average values for the average product use. multiple manufacturing facilities in China and Attributable processes in both the use and end-of- Southeast Asia. While TAL life stage can vary significantly between geographical has installed sub-meters locations. While companies can use global averages, they for most attributable may find that focusing on a specific region or country processes for their non-iron shirt, there are still some provides greater insight into the GHG impacts of the attributable processes, such as packing, whose energy product’s use and end-of-life stages. Data collection use cannot be fully separated from non-attributable requirements and guidance are available in chapter 8 to processes that also occur in the factory, such as R&D help companies determine the most appropriate use and and product testing. After deducting the emissions of waste treatment profile. metered processes from the overall tally, TAL captured In the case where more than one use or end-of-life profile emissions from the remaining processes (attributable is possible, companies may assess the scenario uncertainty and non-attributable) that are not sub-metered by (i.e., sensitivity analysis) to understand the impact each allocating across all products produced in the factory. potential profile may have on the total inventory results. As a result of using this approach, the product For example, a company may want users of the report to inventory was able to meet the boundary requirement know the impact that storing food in the freezer for three to include all attributable processes. By clearly stating months versus one year has on the inventory results. which non-attributable processes were included in the More information on scenario uncertainty is available in report, TAL also improved the transparency of their chapter 10. inventory results. 7.3.4 Estimating to determine insignificance To determine insignificance, a company should estimate the process’s emissions using data with upper limit assumptions environmental impact; therefore, the material input is a to determine whether, in the most conservative case, the justified exclusion. The definition of insignificance should process is insignificant based on either mass, energy, or reflect the company’s business goals for conducting the volume, as well as GHG relevance criteria. inventory. As stated previously, companies are required to disclose and justify any exclusion of attributable To determine whether an estimate is insignificant or not, processes in the inventory report. a company needs to establish a definition of insignificance which may include a rule of thumb threshold. For example, 7.3.5 non-attributable processes a rule of thumb for insignificance may be material or Companies are not required to include non-attributable energy flows that contribute less than one percent of the processes (processes that are not directly connected to mass, energy, or volume and estimated GHG significance the studied product) in the boundary. However, companies over a process, life cycle stage, or total inventory.4 should include non-attributable processes in the inventory if they cannot be separated from attributable process For example, consider a process for which there is no data, or if the company determines that the process is primary or secondary data available on material input relevant to the studied product. Relevance is determined X other than that it contributes 0.5 grams to the 100 by the company and may be based on many different gram total material input for the product. The company factors including business goals and reduction potentials, estimates that even if material X is a GHG intensive input, product rules or sector guidance, and relative impact in 0.5 grams does not exceed one percent of the mass or relation to the rest of the inventory. [42] Product Life Cycle Accounting and Reporting Standard
- 45. CHAPTeR 07 BoundarySetting Ge GE performed a GHG inventory of their GE Energy 2.5xl were simplified to include only the main material inputs g u i d a n c e wind turbine, with the unit of analysis defined as the while still giving an idea of the magnitude compared quantity of electricity delivered to the grid by one 2.5xl to other stages. The production stage includes sub- wind turbine over its 20-year lifetime. Using the general assembly of various turbine components. The use stage life cycle stages defined by this standard, GE developed includes operation and maintenance (O&M) that occurs a process map to reflect how the various materials and over the 20 years the wind turbine is in operation, activities should be categorized within the life cycle. The including any related transportation to the installation wind turbine contains over 10,000 parts, so the material site. The end-of-life stage includes decommissioning acquisition and preprocessing stage processes (disassembly of turbine) and recycling or disposal of the turbine materials. material acquisition distribution & pre-processing production & storage use end-of-life material acquisition and processing transport hub bed plate converter main shaft gearbox yaw drives blades nacelle generator top box main bearing pitch bearing yaw bearing tower pitch system main ctrl cab transformer other components vendor parts shipped to GE transport transport site prep Ge manufacturing vendor parts shipped directly to installation site & assembly transport installation recycling/ O&M decommissioning transport disposal transport transport NOTE: The upstream and downstream material and energy inputs are not identified in this process map for simplicity. The results of this inventory showed that 65 percent of the life cycle GHG emissions occur in the material acquisition and preprocessing stage. Including the process map in the inventory report will allow GE’s stakeholders to have a visual understanding of not only the life cycle processes attributable to a wind turbine but also the inventory results. [43]
- 46. g u id a n c e Non-attributable process that may be relevant to geographic location, and can vary significantly depending some products are capital goods and infrastructure. on the type of waste treatment assumed and how long For example, renewable energy generation such it takes for the product’s carbon to return to nature. For as hydroelectric and wind power require capital example, waste that is incinerated has a very short time infrastructure that may have a large GHG impact relative period compared to waste that is disposed of in a landfill. to the rest of the inventory. This can be determined using Additionally, not all waste treatment methods result in the same basis and threshold defined when determining the release of the carbon contained in the product into insignificance. Additionally, a company may see corporate the atmosphere. When a company knows that either activities, a non-attributable process, as a key area of all or a portion of a product’s carbon does not return to reduction potential and therefore determine they are the atmosphere during waste treatment, a company is relevant to include in the product inventory. required to disclose and justify this in the inventory report. For example, lignin is a carbon-based component of wood 7.3.6 Time period that does not degrade under anaerobic conditions.5 The total inventory time period is dependent on the use and end-of-life stages. The use-stage time period is A company may not assume that carbon is stored in a based on the service life of the product. For example, product by shortening the end-of-life time period. It if the function of a laptop computer is to provide 5,000 should be known that the carbon is stored indefinitely computing hours, eight hours a day, five days a week, the as a result of waste treatment. For example, a company use-stage time period would be 2.4 years. cannot assign an end-of-life time period of five years to a product that aerobically degrades in ten years. The end-of-life time period is based on the average waste treatment profile of the studied product in the assumed 7.3.7 Cradle-to-gate inventories There are two types of intermediate products: when the company manufacturing the intermediate product knows Box [7.3] Relevance and significance the use profiles of the final product it becomes and when the intermediate product can be used in many different Both relevance and significance are used in this final products and therefore has a variety of possible use standard to define similar concepts. profiles. Just like the unit of analysis of an intermediate product (see chapter 6), the boundary requirements Significance is defined as the size of emissions, are dependent on whether the company knows the use removals, or GHG intensity and is used quantitatively profile (e.g., function) of the final product. throughout the standard. Significance is used in data quality reporting (chapter 8) to describe data If the use profile is known, companies should perform that has a large impact on the inventory results. a full life cycle (cradle-to-grave) inventory of the Insignificance is also used in boundary setting and intermediate product. This provides companies with more base inventory recalculation (chapter 14) to describe reduction opportunities by including the distribution, a threshold under which a process or change can be retail, use and end-of-life stages, and stakeholders with a assumed insignificant to the inventory results. complete picture of the product’s life cycle. An innovative way to do this is to work with the final product producer; Relevance is a qualitative term used to describe how using the primary data and expertise they have on the decisions made during the inventory process impact final production, use, and end-of-life can improve the a company’s business goals. Examples of decisions completeness and accuracy of the inventory. that consider relevance include establishing the scope (chapter 6), including non-attributable processes, and If the use profile is unknown, companies may still decide screening during data collection (chapter 8). When to perform a cradle-to-grave inventory by picking a making decisions based on relevance, it is usually representative or average use profile. Alternatively, a recommended that companies also consider significance. cradle-to-gate inventory may be performed. Transparency is important when performing a cradle-to-gate [44] Product Life Cycle Accounting and Reporting Standard
- 47. CHAPTeR 07 BoundarySetting inventory, particularly when a downstream customer endnotes of an intermediate product wants to use the cradle-to- 1 This refers only to biomass burning, liming, and other practices gate data to calculate the cradle-to-grave inventory of used to prepare converted land. Biomass burning and fertilizer their final product. As stated previously, companies are application due to agricultural and forestry practices are also g u i d a n c e included in the inventory as attributable processes, separate from required to clearly disclose and justify in the inventory land-use change impacts. report when a cradle-to-gate boundary is used. For 2 Indirect land use does not refer to the direct land used to example, an appropriate justification could be lack of produce an attributable input into the studied product (e.g., the knowledge of the final product’s use profile. The fact that land used to produce animal feed which is an attributable input a cradle-to-gate, and not cradle-to-grave, inventory was for the studied product beef). performed should also be made clear in the process map 3 Material inputs such as part replacement due to operation and and the description of life cycle stages. maintenance may fall within the use or material acquisition stage. Although the process occurs in the use stage, it may be easiest A cradle-to-gate inventory performed in conformance during data collection to include all emissions associated with with this standard does not include the use and end-of- that material input over the product’s life cycle during material life stages of the final product. This is to preserve the acquisition. For example, if the product requires two timing continuous nature of the life cycle approach and avoid belts during its service life, companies can either assume one cherry picking (e.g., omitting a GHG-intensive use stage during material acquisition and one during use, or both during but including the end-of-life stage). In some cases, the material acquisition. Either is appropriate as long as this is made company producing the intermediate product may have transparent in the inventory report. information on end-of-life processes that would improve 4 Companies may determine significance based on the process, life the downstream customer’s inventory, such as recycling cycle stage, or inventory level as long as this is done consistently rates or time period. Companies may include additional throughout the inventory. information about the end-of-life stage in the report of a 5 Treating waste under anaerobic conditions means that the waste cradle-to-gate inventory, as long as it is clearly separated degrades with limited oxygen. This typically occurs in landfills where oxygen is unable to penetrate buried waste. from the inventory results (e.g., the total CO2 equivalents [CO2e] per unit of analysis) and process map. [45]
- 48. 08 Collecting Data and Assessing Data Quality
- 49. g e qd a rn ec m e n t s r u i u i e 8.1 Introduction D ata collection can be the most resource intensive step when performing a product GHG inventory. Data can also have a significant impact on the overall inventory quality. This chapter provides requirements and guidance to help companies successfully collect and assess the quality of their inventory data. 8.2 Requirements Companies shall collect data for all processes Allocated data are considered primary data as long as the included in the inventory boundary. data meets the other primary data requirements. Companies shall collect primary data for all During the data collection process, processes under their ownership or control. companies shall assess the data quality of activity data, emission factors, and/ Primary data are data collected from specific processes or direct emissions data by using the data in the studied product’s life cycle. Primary data can be quality indicators. process activity data (physical measures of a process that results in GHG emissions or removals), direct Activity data are quantified measures of a level of activity emissions data (determined through direct monitoring, that results in GHG emissions or removals. Emission stoichiometry, mass balance, or similar methods) from factors are GHG emissions per unit of activity data. Direct a specific site, or data that is averaged across all sites emissions data are data on emissions released from a that contain the specific process. Primary data can be process (or removals absorbed from the atmosphere) measured or modeled, as long as the result is specific to determined through direct monitoring, stoichiometry, the process in the product’s life cycle. It is important to mass balance, or similar methods (see section 8.3.4 for note that using the reference flow of the studied product more details on data types). (e.g., mass of finished product) as process activity data is not considered primary data. [47]
- 50. r e qu i r e m e n t s Box [8.1] Definition of ownership or control The standard defines five data quality indicators to use in assessing data quality. They are: A company owns or controls a process if it is under • Technological representativeness: the degree to its operational or financial control. The GHG Protocol which the data reflect the actual technology(ies) Corporate Accounting and Reporting Standard used in the process defines two types of control: financial control and • Geographical representativeness: the degree to operational control. which the data reflects actual geographic location of the processes within the inventory boundary (e.g., A company has financial control over a process if it country or site) has the ability to direct the financial and operating • Temporal representativeness: the degree to which policies of the process with a view to gain economic the data reflect the actual time (e.g., year) or age of benefits from the activity. For example, financial the process control usually exists if the company has the right to • Completeness: the degree to which the data are the majority of benefits of the operation. Similarly, statistically representative of the process sites a company is considered to financially control a • Reliability: the degree to which the sources, data process if it retains the majority of the risks and collection methods, and verification procedures used rewards of ownership of the operation’s assets. to obtain the data are dependable A company has operational control over a process Assessing data quality during data collection allows if the company or one of its subsidiaries has the full companies to make data quality improvements more authority to introduce and implement its operating efficiently than when data quality is assessed after the policies to the process. This criterion is consistent collection is complete. with the current accounting and reporting practice of many companies that report on emissions from facilities for which they hold the operating For significant processes, companies shall license. If the company or one of its subsidiaries is report a descriptive statement on the data the operator of a facility, it is expected that it has sources, the data quality, and any efforts the full authority to introduce and implement its taken to improve data quality. operating policies and thus has operational control, except in very rare circumstances. Companies need to determine which processes For more information on ownership and control are significant in order to report the data sources, refer to chapter 3 of the GHG Protocol Corporate quality concerns, and quality improvement efforts. Accounting and Reporting Standard. For example, a process that contributes a substantial amount of GHG emissions relative to the total life cycle emissions is significant. The criteria included in the screening steps below can be helpful to identify significant processes. See the guidance section for examples of reporting on data sources, quality, and improvement efforts for significant processes. [48] Product Life Cycle Accounting and Reporting Standard
- 51. CHAPTeR 08 CollectingData and Assessing Data Quality 8.3 Guidance Companies should follow the steps below when collecting Step 7. Improve the data quality, focusing on processes data and assessing data quality: that have a significant impact on the inventory results g u i d a n c e Step 1. Develop a data management plan and document the data collection and assessment processes as The following sections provide guidance on completing they are completed each of these steps. Step 2. Identify all data needs using the product’s 8.3.1 Data management plan process map A data management plan is a tool to help companies organize and consistently document the data collection Step 3. Perform a screening to help focus data process, including sources of data, assumptions made, collection efforts and data quality. Documenting the data collection Step 4. Identify data types process is useful for improving the data quality over time, preparing for assurance, and revising future Step 5. Collect primary data for all processes under the product inventories to reflect changes in the product’s ownership or control of the reporting company life cycle. To ensure that all the relevant information Step 6. For all other processes, collect primary or is documented, a data management plan should be secondary data. Assess and document the data established early in the inventory process. Detailed quality of the direct emissions data, activity data, guidance on how to create and implement a data and emission factors as the data are collected management plan is given in Appendix C. PepsiCo PepsiCo, Inc. is a leading global food and beverage specific to the growing processes used for Tropicana company whose brands include Pepsi, Lay’s, Quaker oranges and would allow the company to track Oats, Gatorade, and Tropicana. Working with Columbia performance over time. PepsiCo’s selection of primary University, and using sector guidance developed by the data was further validated when comparison of the Beverage Industry Environmental Roundtable, PepsiCo data sources showed the secondary data were less inventoried the GHG emissions from a 64 ounce (1.9 liter) complete and contained significant differences in the gable top carton of their Tropicana Pure Premium brand fertilizer, on-farm activities, and transportation data. of orange juice using the following six step process: By using primary data, PepsiCo found that the orange 1. Develop a comprehensive list of materials growing process, which included fertilizer use and 2. Develop a process map application, contributed approximately 35 percent of the 3. Collect emissions data product’s emissions. 4. Perform a screening analysis As a result, PepsiCo By using primary data, 5. Fill data gaps with additional primary data and is now working with PepsiCo found that acceptable secondary data one of its long-term the orange growing 6. Calibrate against sector guidance and report orange growers to process... contributed test two lower-GHG 35% By collecting secondary data through the screening fertilizers in the analysis step, PepsiCo discovered that the orange growing process. of the growing process was a large emissions contributor to the product inventory. This result led PepsiCo to product’s emissions. collect its own primary data since these would be [49]
- 52. g u id a n c e 8.3.2 Identifying data needs should at a minimum identify and focus data collection on The attributable processes identified during boundary processes that are known to consume or produce large setting and in the process map provide a basis for the list amounts of GHG-intensive energy or material inputs. of data that needs to be collected. The data management During the screening process it is also helpful to assess plan can also be used to organize attributable processes if the estimated uncertainty. Processes that contribute it is not possible to include them all in a process map. significantly to the total life cycle emissions based on data 8.3.3 Data screening with high levels of uncertainty should be priority areas for Screening processes based on their estimated contribution data collection. to the total life cycle helps companies focus their data Processes may be relevant for non-emissions- collection efforts. While such screening is not required, related reasons for some companies. Under such it may deliver surprising findings and help companies circumstances, companies may want to use the prioritize data collection resources more effectively. following criteria, in addition to the ones above, to The most effective way to perform screening is to establish data collection priorities: estimate the emissions and removals of processes • Processes that are significant by spend relative to and process inputs using secondary data and rank the other processes in the product’s life cycle estimates in order of their contribution to the product’s • Processes with potential emissions reductions that life cycle. Companies can then use this list to prioritize could be undertaken or influenced by the company the collection of primary or quality secondary data on the • Processes that are controlled by suppliers with processes and process inputs that have the largest impact strategic importance to the company’s core business on the inventory results. If companies choose not to • Processes that meet additional criteria developed by estimate emissions and removals during screening, they the company or industry sector [50] Product Life Cycle Accounting and Reporting Standard
- 53. CHAPTeR 08 CollectingData and Assessing Data Quality 8.3.4 Identifying data types Box [8.2] Using environmentally extended input- Identifying the data types used in an inventory will output emission factors provide companies with a better understanding of the data and their quality. Typically, data can be gathered in Environmentally extended input-output (EEIO) g u i d a n c e one of two ways: models estimate energy use and/or GHG emissions resulting from the production and upstream supply 1. Directly measuring or modeling the emissions chain activities of different sectors and products released from a process within an economy. The resulting EEIO emissions 2. Collecting activity data and emission factors for factors can be used to estimate GHG emissions for a process and multiplying the activity data by the a given industry or product category. EEIO data are emission factor particularly useful in screening emission sources when prioritizing data collection efforts. The sources of data used in the inventory should be documented in the data management plan (see Appendix EEIO models are derived by allocating national GHG C). Direct emissions data, activity data (process and emissions to groups of finished products based on financial), and emission factors are types of data defined economic flows between industry sectors. EEIO in this standard. models vary in the number of sectors and products included and how often they are updated. EEIO data Direct emissions data are often comprehensive, but the level of granularity Direct emissions data are derived from emission is relatively low compared to other sources of data.1 releases and are determined through direct monitoring, stoichiometry, mass balance, or similar methods. Examples of direct emissions data include: • Energy (e.G., Joules of energy consumed) • Emissions from an incinerator measured through • Mass (e.G., Kilograms of a material) a continuous emissions monitoring system (CEMS) • Volume (e.G., Volume of chemicals used) • A chemical reaction’s emissions determined using • Area (e.G., Area of a production facility) stochiometric equation balancing • Distance (e.G., Kilometers travelled) • Fugitive refrigerant emissions determined using a • Time (e.G., Hours of operation) mass balance approach Activity data Financial activity data Activity data are the quantitative measure of a level of Financial activity data are monetary measures of a process activity that results in GHG emissions. Activity data can be that results in GHG emissions. Financial activity data, measured, modeled, or calculated. when combined with a financial emission factor (e.g., There are two categories of activity data: process activity environmentally extended input-output [EEIO] emission data and financial activity data. factor), result in the calculation of GHG emissions. Process activity data While process activity data measure the physical inputs, Process activity data are physical measures of a process outputs, and other metrics of a process, financial activity that results in GHG emissions or removals. These data data measure the financial transactions associated with capture the physical inputs, outputs, and other metrics a process. of the product’s life cycle. Process activity data, when If a company initially collects financial activity data on a combined with a process emission factor, result in the process input and then determines the amount of energy calculation of GHG emissions. Examples of process activity or material inputs using a conversion factor, the resulting data include: activity data are considered process data. For example, [51]
- 54. g u id a n c e a company that knows the cost of the fuel consumed in databases is available at (www.ghgprotocol.org). More a process and the cost per liter of fuel can easily convert information on calculating emissions and inventory results the fuel value into the physical amount of litres consumed is available in chapter 11. in the process. 8.3.5 Collecting primary data emission factors To achieve conformance with this standard, primary Emission factors are the GHG emissions per unit of activity data are collected for all processes2 under the ownership data, and they are multiplied by activity data to calculate or control of the reporting company. Primary data are GHG emissions. Emission factors may cover one type of defined as data from specific processes in the studied GHG (for example, CH4/liter of fuel) or they may include product’s life cycle. Direct emissions data and process many gases in units of CO2 equivalents (CO2e). Emission activity data can both be classified as primary data if they factors can include a single process in a product’s life meet the definition. cycle, or they can include multiple processes aggregated Examples of primary data include: together. Life cycle emission factors that include emissions from all attributable upstream processes of a • Liters of fuel consumed by a process in the product’s product are often called cradle-to-gate emission factors. life cycle, either from a specific site or an average Companies should understand which processes are across all production sites included in the inventory’s emission factors to ensure that • Kilowatt-hours consumed by a process from an all processes in the product’s life cycle are accounted for individual site or an average across sites in the data collection process. • Kilograms of material added to a process • GHG emissions from the chemical reaction of a process The types of emission factors needed depend on the types of activity data collected. For example, if companies Companies typically do not have control over the source collect financial activity data on a material input to a of emission factors used to calculate the GHG emissions process, they can select an EEIO emission factor to associated with process activity data, even if the activity calculate the upstream emissions. Conversely, a company data is primary. Therefore, the source of emission factor may first collect available emission factors and then has no bearing on the classification to meet the primary decide which type(s) of activity data to collect. Examples of emission factor sources include life cycle Box [8.4] Collecting supplier data databases, published product inventory reports, government agencies, industry associations, company- developed factors, and peer reviewed literature. A list of Quality data are important to develop a useful inventory report and to track reductions over time. Box [8.3] Selecting electricity emission factors Therefore, the best type of data from suppliers: • Are based on process-specific information, not As with data from other emission sources, companies disaggregated site information from a corporate should select electricity emission factors that are inventory; and geographically specific to the electricity sources used • Provide sufficient supporting information to enable in the product inventory. When an electricity supplier users to understand how the data were gathered, can deliver a supplier-specific emission factor and what calculation methodologies were used, and the these emissions are excluded from the regional quality of inventory. emission factor, the supplier’s electricity data should be used. Otherwise, companies should use a regional Guidance on how to collect supplier data and average emission factor for electricity to avoid develop a data collection strategy is available at double counting. (www.ghgprotocol.org). [52] Product Life Cycle Accounting and Reporting Standard
- 55. CHAPTeR 08 CollectingData and Assessing Data Quality data requirement and emission factors do not need to be the primary data collection requirement and therefore classified as primary or secondary. are always classified as secondary. If available and of sufficient quality, primary data should Examples of secondary data include: g u i d a n c e be collected for all processes in the product’s life cycle. • Average number of liters of fuel consumed by a There are several reasons why collecting primary data can process, obtained from a life cycle database be beneficial to a company even if the processes are not • Kilowatt-hours consumed by another similar process under the company’s ownership or control. For example: used as a proxy in the studied product’s life cycle • Collecting primary data from suppliers throughout • Industry-average kilograms of material input into the product’s life cycle can expand transparency, a process accountability, and data management to partners in • Industry-average GHG emissions from a process’s the value chain chemical reaction • Primary data can better reflect changes in emissions • Amount spent on process inputs, either specific to resulting from operational changes taken to reduce the process or a company/industry average emissions, whereas secondary data sources may not Secondary data can come from external sources (e.g., reflect such changes lifecycle databases, industry associations, etc.) or can be • Collecting primary data enables companies to more data from another process or activity in the reporting effectively track and report progress toward its GHG- company’s or supplier’s control that is used as a proxy for reduction goals a process in the inventory product’s life cycle. This data 8.3.6 Collecting secondary data can be adapted to the process or can be used “as-is” in the Secondary data are defined as data that are not from studied product’s inventory. For example, suppose the specific processes in the studied product’s life cycle. studied product’s life cycle includes a process using a steam- Direct emission data and process activity data that do not generating boiler. If the company does not have primary meet the definition of primary data can be classified as data for the boiler but does have process activity data for a secondary. Financial activity data cannot be used to meet boiler used in another product’s life cycle, the company may use this data for the studied product’s boiler process. Box [8.5] Questions to assist with selecting a lifecycle database to use with the Product Standard Many life cycle databases exist, and they vary in 2. Were the data developed using a consistent their geographic focus, cost, update frequency, methodology? and review processes. A few questions to use in the 3. For agricultural and forest products, are land-use selection of a database are listed below. While these impacts included in the LCA emissions data? If yes, questions can be used to evaluate entire databases, what impacts are included? companies are required to assess the quality (both in 4. How long has the database existed, and how representativeness and data collection methods) of the extensively has the database been used? individual data points chosen from databases as part of 5. How frequently is the database updated? data quality assessment. A list of databases is available 6. How current are the data sources used for at (www.ghgprotocol.org). developing the LCA emissions data? 7. Can uncertainties be estimated for the data? 1. Are the process data from a collection of actual 8. Is there any risk that the data will be perceived as processes or estimated/calculated from other biased and, if so, have the data and methodologies data sources? been independently reviewed? [53]
- 56. g u id a n c e 8.3.7 Assessing data quality During data collection, there may be cases where several process(es) in the product’s life cycle. Generally, data data types (direct emissions data, activity data, emission quality can indicate how representative the data are (in factors) and data classifications (primary and secondary) time, technology, and geography) and the quality of the are available for the same process. Figure 8.1 illustrates data measurement (completeness of data collection and this with an example of 4 different options for collecting the reliability of the data). the GHG data for process A: direct emissions data (option Assessing data quality is valuable for a number of 1); primary process activity data (option 2A); secondary reasons, including: process activity data (option 2B); and financial activity data (option 3). Companies may also have several choices 1. Improving the inventory’s data quality. The results for emission factors. Assessing data quality during data of a data quality assessment can identify which data collection helps companies determine which data most sources are of low quality, allowing companies to closely represents the actual emissions released by the improve the overall inventory quality by collecting process during the studied product’s life cycle. different data of higher quality Data quality should not be based on intuition or 2. Assisting the assurance process. An assurer may assumption (e.g., primary data is always better than request information on the quality of the data used in secondary). Companies are required to assess data the product inventory quality using data quality indicators. Data quality 3. Demonstrating to stakeholders the quality of the data indicators can be used to qualitatively or quantitatively used in the product inventory address how well the data characterizes the specific Figure [8.1] Options available to calculate the GHG data for process A Process A that uses diesel fuel Option 1 Option 2 Option 3 Direct emissions data Process activity data e.g., 10 kg CO2 emitted Financial activity data from process A Option 2A Option 2B e.g., 15 dollars of (direct measurement diesel fuel purchased of emissions) Primary Secondary e.g., process A uses e.g., an average process A 5 liters of diesel fuel uses 8 liters of diesel fuel eeIO emission factor LCA database emission factor GHG data for process A [54] Product Life Cycle Accounting and Reporting Standard
- 57. CHAPTeR 08 CollectingData and Assessing Data Quality Data quality indicators and methods quality. Therefore, if resource constraints exist, companies The five data quality indicators used to assess individual should focus data assessment and subsequent collection of data points for processes in the product inventory are higher quality data on the largest sources of emissions. listed in table 8.1. g u i d a n c e Qualitative data quality assessment There are multiple methods for using indicators to The qualitative data quality assessment approach applies assess data quality, including the qualitative data quality scoring criteria to each of the data quality indicators. This assessment method outlined in this standard. Regardless rating system has elements of subjectivity. For example, of the method used, companies should document the some fuel emission factors do not change significantly approach and results in the data management plan to over time. Therefore, a fuel emission factor that is over support the assurance process, ensure internal inventory 10 years old, which would be assigned a temporal score quality controls, and track data quality improvements of ‘poor’ with the data quality in table 8.2, may not be over time. different from a factor less than 6 years old (a ‘good’ temporal score). Companies should consider the individual Improving the quality of data for large emission sources can circumstances of the data when using the data quality result in a significant improvement in the overall inventory Table [8.1] Data quality indicators Indicator Description Relation to data quality Technological The degree to which the data reflects Companies should select data that representativeness the actual technology(ies) used are technologically specific. Temporal The degree to which the data reflects Companies should select data that representativeness the actual time (e.g., year) or age of are temporally specific. the activity Geographical The degree to which the data reflects Companies should select data that representativeness the actual geographic location of the are geographically specific. activity (e.g., country or site) Completeness The degree to which the data are Companies should select data that statistically representative of the are complete. relevant activity. Completeness includes the percentage of locations for which data is available and used out of the total number that relate to a specific activity. Complete- ness also addresses seasonal and other normal fluctuations in data. Reliability The degree to which the sources, data Companies should select data that are collection methods and verification reliable. procedures3 used to obtain the data are dependable. NOTE: Adapted from B.P. Weidema, and M.S. Wesnaes, “Data quality management for life cycle inventories - an example of using data quality indicators,” Journal of Cleaner Production. 4 no. 3-4 (1996): 167-174. [55]
- 58. g u id a n c e Table [8.2] Sample scoring criteria for performing a qualitative data quality assessment Score Representativeness to the process in terms of: Technology Time Geography Completeness Reliability Very Data generated Data with less Data from the Data from all relevant Verified4 data good using the same than 3 years of same area process sites over an based on technology difference adequate time period measurements5 to even out normal fluctuations Good Data generated Data with less Data from a Data from more than Verified data using a similar than 6 years of similar area 50 percent of sites for partly based on but different difference an adequate time period assumptions technology to even out normal or non-verified fluctuations data based on measurements Fair Data generated Data with less Data from a Data from less than Non-verified using a different than 10 years of different area 50 percent of sites for data partly technology difference an adequate time period based on to even out normal assumptions fluctuations or from more or a qualified than 50 percent of sites estimate (e.g., but for shorter time period by sector expert) Poor Data where Data with more Data from an Data from less than Non-qualified technology is than 10 years of area that is 50 percent of sites for estimate unknown difference or the unknown shorter time period age of the data or representativeness are unknown is unknown NOTE: Adapted from Weidema and Wesnaes, 1996. [56] Product Life Cycle Accounting and Reporting Standard
- 59. CHAPTeR 08 CollectingData and Assessing Data Quality Table [8.3] Example of reporting on data sources, quality, and improvement efforts for a significant process Significant Data sources Data quality Efforts to improve process name data quality g u i d a n c e Fruit product transport Activity Data: Average The activity data We are working to from distribution kilometers traveled for does not reflect the improve our internal center to retail store produce in Germany product’s actual data collection efforts transport distance or on product distance Source: Trucking our company’s shipping traveled to obtain Association efficiency practices. country-specific Emission Factor: U.K. emission factors for The transport emis- Defra’s Freight Transport truck transport. sion factor is specific to United Kingdom trans- port operations and not specific to Germany’s transportation system (poor geographic indicator score). criteria results as a basis for collecting new data or when Allocated data using the results in an uncertainty assessment. (See Data that has been collected to avoid allocation are chapter 10 for requirements and guidance on uncertainty.) preferable to data that require allocation. For example, with other data quality indicators being roughly equal, When companies do not know the uncertainty of data gathered at the process level that does not need individual data points in the inventory they may use the to be allocated is preferable to facility-level data that data quality indicator scores to estimate the level of needs to be allocated between the studied product and uncertainty. For information on this approach see chapter other facility outputs. For requirements and guidance on 10. Additional uncertainty calculation guidance and tools performing allocation see chapter 9. are available at (www.ghgprotocol.org). Data transparency 8.3.8 Reporting on data quality Companies should have enough information to assess for significant processes the data with the data quality indicators. If there is not Companies are required to report on the data sources, enough information on the collection procedures, quality data quality, and efforts to improve data quality for controls, and relevant data assumptions, companies significant processes. Table 8.3 provides an example should use that data only if no other data of sufficient of reporting on data sources, quality, and improvement quality is available. efforts for a significant process. The criteria included in the screening steps can be helpful to identify Uncertainty significant processes. Data with high uncertainty can negatively impact the overall quality of the inventory. More information on 8.3.9 Additional data quality considerations uncertainty is available in chapter 10. In addition to the data quality indicators in table 8.1, companies should consider the following quality considerations: [57]
- 60. g u id a n c e Figure [8.2] Decision tree for filling data gaps are proxy data available? yes fill data gap with this secondary data no disclose and justify is the process estimated to be insignificant? yes the data gap in the inventory report collect new data or no include estimated data in the inventory results 8.3.10 Data gaps Data gaps exist when there is no primary or secondary • Adapting an electricity grid emission factor for one data that is sufficiently representative of the given region to another region with a different generation mix process in the product’s life cycle. For most processes • Customizing the amount of material consumed by a where data are missing, it should be possible to obtain process from another product’s life cycle to match a sufficient information to provide a reasonable estimate. similar process in the studied product Therefore, there should be few, if any, data gaps. The estimated data following sections give additional guidance on filling data When a company cannot collect proxy data to fill a gaps with proxy and estimated data. data gap, companies should estimate the data to Proxy data determine significance. If processes are determined to Proxy data are data from similar processes that are used be insignificant based on estimated data, the process as a stand-in for a specific process. Proxy data can be may be excluded from the inventory results. Criteria for extrapolated, scaled up, or customized to represent the determining insignificance are outlined in chapter 7. given process. Companies may customize proxy data To assist with the data quality assessment, any to more closely resemble the conditions of the studied assumptions made in filling data gaps, along with the process in the product’s life cycle if enough information anticipated effect on the product inventory final results, exists to do so. Data can be customized to better match should be documented. Figure 8.2 illustrates the guidance geographical, technological, or other metrics of the for filling data gaps with proxy data or estimated data. process. Identifying the critical inputs, outputs, and other metrics should be based on other relevant product 8.3.11 Improving data quality inventories or other considerations (e.g., discussions with Collecting data and assessing its quality is an iterative a stakeholder consultant) when product inventories do process for improving the overall data quality of the not exist. Examples of proxy data include: product inventory. If data sources are identified as low quality using the data quality indicators, companies should • Using data on apples as a proxy for all fruit re-collect data for the particular process. The following • Using data on PET plastic processes when data on the steps are useful when improving data quality. specific plastic input is unknown [58] Product Life Cycle Accounting and Reporting Standard
- 61. CHAPTeR 08 CollectingData and Assessing Data Quality g u i d a n c e Step 1: Identify sources of low quality data in the endnotes product inventory using the data quality 1 UNEP and SETAC, Global Guidance Principles for Life Cycle assessment results. Assessment Databases. 2011. 2 Non-attributable processes under the control of the company Step 2: Collect new data for the low quality data may be included in the inventory without available primary data. sources as resources allow. Sources with low This is to be expected if the general rules for collecting quality quality data that have also been identified as data are applied, since including non-attributable processes in the significant through the screening process should inventory is not a requirement of this standard. be given priority. 3 Verification may take place in several ways, for example by on-site checking, reviewing calculations, mass balance calculations, or Step 3: Evaluate the new data. If it is of higher quality cross-checks with other sources. than the original data, use in its place. If the data 4 Verification may take place in several ways, e.g., by on-site are not of higher quality, either use the existing checking, by recalculation, through mass balance, or by cross- data or collect new data. checks with other sources. 5 Includes calculated data (e.g., emissions calculated using Step 4: Repeat as necessary and as resources allow. activity data) when the basis for calculation is measurement If companies change data sources in subsequent (e.g., measured inputs). If the calculation is based partly on inventories they should evaluate whether this change assumptions, the score should be good or fair. creates the need to update the base inventory. (See chapter 14 for more information.) [59]
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- 63. g e qd a rn ec m e n t s r u i u i e 9.1 Introduction I n most product life cycles, there is at least one common process that has multiple valuable products as inputs or outputs and for which it is not possible to collect data at the individual input or output level. In these situations, the total emissions or removals from the common process need to be partitioned among the multiple inputs and outputs. This partitioning is known as allocation, an important and sometimes challenging element of a product inventory process. Accurately allocating emissions or removals to the studied product is essential to maintaining the quality of a GHG inventory. This standard defines two types of products produced This chapter provides requirements and guidance to from common processes: help companies choose the most appropriate allocation method to address common processes in their product • The studied product for which the GHG inventory is inventory. In addition, definitions and examples of the being prepared methods available to avoid or perform allocation are • Co-product(s) that have value as an input into another given. The chapter concludes with guidance, including product’s life cycle how to choose between allocation methods. For Inputs to the common process may be services, materials, simplicity, the methods and examples below focus only or energy inputs. Outputs may be intermediate or final on emissions. However, removals are also subject to products, energy outputs (such as electricity or district allocation following the same requirements and guidance. heat), or waste. A typical common process is illustrated in figure 9.1. [61]
- 64. r e qu i r e m e n t s Figure [9.1] Illustrative generic common process 9.2 Requirements that requires allocation1 Companies shall allocate emissions and removals to accurately reflect the contributions of the studied product and emissions co-product(s) to the total emissions and removals of the common process. inputs outputs A studied product, as defined in chapter 6, is the product on which the GHG inventory is performed. A co-product is produced during the studied product’s life cycle and intermediate studied product A product has value as an input into another product’s life cycle. To abide by the principle of completeness and accuracy, companies shall allocate emissions and removals to intermediate common co-product accurately reflect the contribution of the studied product product B process A and co-product(s) to the total emissions and removals of the common process. A co-product without economic value is considered a waste and, hence, no emissions or removals are allocated. energy input waste Companies shall avoid allocation wherever possible by using process subdivision, redefining the functional unit, or using system expansion. [62] Product Life Cycle Accounting and Reporting Standard
- 65. CHAPTeR 09 Allocation r e q u i r e m e n t s Table 9.1 describes the methods companies shall Table 9.2 describes the methods companies shall use to use to avoid or minimize the use of allocation in a perform allocation, starting with physical allocation. product inventory. Companies shall apply the same allocation If allocation is unavoidable, companies methods to similar inputs and outputs shall allocate emissions and removals based within the product’s life cycle. on the underlying physical relationships between the studied product and co- To abide by the principle of consistency, companies shall product(s). When physical relationships apply the same allocation methods to similar inputs and alone cannot be established or used as outputs, for example, when an allocated co-product output the basis for allocation, companies shall is also an input to another process within the life cycle. select either economic allocation or another allocation method that reflects other relationships between the studied product For allocation due to recycling, companies and co-product(s). shall use either the closed loop approximation method or the recycled content method as defined by this standard. Table [9.1] Methods to avoid allocation Method Definition Process subdivision Dividing the common process into sub-processes. Redefining the unit Inclusion of the co-products (additional functions) in the functional unit. of analysis System expansion Using the emissions from an alternative product that comprises the same functional unit as a co-product to estimate the emissions of the co-product. Only applicable when companies have direct knowledge of the function and eventual use of the co-product. Table [9.2] Method to perform allocation Method Definition Physical allocation Allocating the inputs and emissions of the system based on an underlying physical relationship between the quantity of product and co-product and the quantity of emissions generated. Economic allocation Allocating the inputs and emissions to the product and co-product(s) based on the market value of each when they exit the common process. Other relationships Allocating the inputs and emissions to the product and co-product(s) based on established and justifiable relationships other than physical or economic. [63]
- 66. r e qu i r e m e n t s Allocation due to recycling processes can be especially Companies shall disclose and justify challenging. Recycling occurs when a product or material the methods used to avoid allocation or exits the life cycle of the studied product to be reused perform allocation due to co-products or recycled as a material input into another product’s life or recycling. When using the closed loop cycle. This creates a unique allocation scenario because approximation method, companies shall the common processes for recycling are often shared report displaced emissions and removals between different life cycles. separately from the studied product’s end- When recycling occurs in a studied product’s boundary, of-life stage inventory. companies need to allocate the emissions and removals associated with the extraction and processing of raw Regardless of which allocation methods are used, materials and the final disposal of products (including companies shall report a brief explanation of the choice recycling) between more than one product life cycle of specific allocation methods and factors (if applicable) (i.e., the product that delivers the recycled material and used in the inventory, including why the methods and the subsequent product which uses recycled material). factors most accurately reflect the studied product’s or Therefore, all allocation requirements for common co-product’s contribution to the common process’s total processes also apply to allocation due to recycling. emissions and removals (See chapter 13). However, because of the additional complexity When the closed loop approximation method is used in associated with recycling processes, this standard a GHG inventory, the virgin material displacement factor provides two specific methods for allocating emissions (as described in section 9.3.6) is subtracted from the total and removals between product life cycles: the closed inventory results. However, the displacement factor shall loop approximation method and the recycled content be reported separately from the percentage of inventory method. The closed loop approximation method is a type results by stage to avoid a negative end-of-life value. of system expansion that accounts for the impact that end-of-life recycling has on the net virgin acquisition of a material. The recycled content method allocates the recycling process emissions and removals to the life cycle that uses the recycled material. If neither the closed loop approximation nor the recycled content method is appropriate, companies may use another method if all of the following are true: • The method conforms to the allocation and all other requirements of this standard (including being disclosed and justified in the inventory report) • The method accounts for all emissions and removals due to recycling (i.e., applies an allocation factor between 0 and 100 percent consistently between inputs and outputs to avoid double counting or undercounting emissions) • The method uses as the basis for allocation (in the following order of preference, if feasible): a physical properties factor, an economic value factor, or a factor based on the number of subsequent uses2 [64] Product Life Cycle Accounting and Reporting Standard
- 67. CHAPTeR 09 Allocation 9.3 Guidance 9.3.1 Choosing an appropriate allocation method part of the refinery’s total emissions should be allocated to This standard provides six valid methods for avoiding the diesel product. Therefore, the refinery process should be allocation or for allocating emissions from a common subdivided as much as possible into processes that include g u i d a n c e process, each suited to different scenarios. only diesel fuel. Figure 9.2 presents a decision process for selecting the However, because diesel fuel comes from one material best method for avoiding or performing allocation for a input (crude oil) which is chemically separated into many given common process in various situations. As shown in different products, process subdivision cannot be used for figure 9.2, if the output is a waste no allocation is needed. all allocations. After considering process subdivision and In this case, all emissions are allocated to the studied- simplifying the common processes as much as possible, a product, and the waste treatment is also included as an company should allocate or avoid allocation of the remaining attributable process. This is because waste without value common processes using one of the other recommended is not subsequently used. In the situation where waste allocation methods. is subsequently used, that output would have some Redefining the unit of analysis economic value and is no longer classified as “waste.” Another method to avoid allocation is to redefine the unit of analysis to include the functions of both the studied 9.3.2 Avoiding allocation product and the co-product. For guidance on defining the Process subdivision unit of analysis, see chapter 6. Process subdivision is used to avoid allocation when it is exAMPLe possible to divide the common process into two or more A company produces a PET bottle designed to contain distinct processes. Process subdivision may be done beverages. The company defines the functional unit (unit of through sub-metering specific process lines and/or using analysis) and inventory boundary to include only the processes engineering models to model the process inputs and attributable to producing, using, and disposing of the bottle. outputs. The common process is disaggregated into The production, use, and disposal processes of the beverage sub-processes that separately produce the studied are excluded. However, many processes within the inventory product and co-products. The common process needs boundary affect both the bottle and the beverage. To avoid to be sub-divided only to the point at which the studied allocation the company decides to redefine the functional unit product and its function is isolated, not to the point that to include the function of the beverage (to be consumed by every co-product has a unique and distinct process. customers). The functional unit is now defined as one bottle Process subdivision should be considered first and is containing one liter of beverage consumed. often used together with other methods to avoid or System expansion perform allocation, particularly when a single material The system expansion method estimates the emissions and input is transformed into more than one product. In this removals contribution of the co-products to the common case, process subdivision is not possible for all common process by substituting the emissions and removals of a processes because there is a physical, chemical, or similar or equivalent product or the same product produced biological separation of the material input. However, by a different product system.3 process subdivision may only be useful in a limited capacity for less technical common processes if transparent data Some life cycle assessment practitioners consider system are not available for all process steps. expansion as a consequential approach to allocation. (See chapter 5 for more information on consequential and exAMPLe attributional approaches to life cycle assessment.) This is A petroleum refinery produces many outputs including, but true if marginal data or market trends are used to identify not limited to, gasoline, diesel fuel, heavy oil, petrol, coke, the substituted co-product. To ensure the attributional and bitumen. If the studied product is diesel fuel, then only a approach is used when performing system expansion, the [65]
- 68. g u id a n c e Figure [9.2] Steps to select an allocation method4 Step 1: Avoid allocation if possible can the co-product’s emissions be modeled is the process output can the common process is it practical to combine using a similar process or a waste (of no be divided the studied product product, and do you have economic value)? and evaluated and co-product(s) into one direct knowledge as separate processes? single functional unit? about the eventual use of the co-product(s)? yes yes yes yes redefine the no need to allocate use process subdivision use system expansion functional unit Step 2: If allocation is necessary, determine if a physical relationship exists is there an underlying physical relationship between the studied product, co-product(s) and their emissions contributions? yes use physical allocation Step 3: If a physical relationship cannot be established or is not applicable, use economic allocation or other relationships are the market values of the studied product and are there other relationships between co-product(s) free of significant market effects on their the studied product and co-product(s) valuation (e.g. brand value, constrained supply, etc.)? that can be established? yes yes use economic allocation use other relationships [66] Product Life Cycle Accounting and Reporting Standard
- 69. CHAPTeR 09 Allocation reportingcompany should know the exact use of the co- multiple inputs (including the studied product) and an product and collect quality supplier-specific and/or average energy co-product. For example, at a pulp mill, wood is emission factor data to perform system expansion. converted into pulp and black liquor. Black liquor can be combusted for internal power generation and/or sold as g u i d a n c e When disclosing and justifying which allocation methods excess power to the grid. To account for the electricity co- were used, companies that use system expansion should product from black liquor, system expansion should be used explain how the selected substitute (and its associated to identify the emissions associated with the electricity emissions) a reasonable replacement for the co-product. generated using the black liquor (based on average grid Companies that are unsure whether system expansion values at the mill location). Therefore, if the mill created is appropriate for their situation should explore other 1000 kg of GHG emissions and 5 MW of electricity, and methods for avoiding or performing allocation. the grid data shows that 5 MW of average electricity on exAMPLe the grid is equivalent to 50 kg of GHG emissions, then the One situation where system expansion may be particularly mill emissions allocated to the pulp product would be useful is in allocating incineration emissions between 950 kg (i.e., 1000 kg from the mill - 50 kg from the created Levi Strauss & Company Levi Strauss & Co. (LS&Co.) used process subdivision Process subdivision and physical allocation methods for different allocation For the garment manufacturer, LS&Co. created a process challenges within the life cycle of a pair of Levi’s® Jeans. model to estimate the studied product’s emissions. Each step in the garment manufacturing process was modeled Production according to the capital equipment used for that step. LS&Co. collected primary data directly from the two For example, sewing of the back pocket was modeled by suppliers of the studied product, a Levi’s® Jean. The the amount of machine minutes it takes to fully complete two suppliers were a fabric mill that creates the denim that assembly step. fabric from cotton fiber and a garment manufacturer responsible for cutting, sewing, and finishing the denim Distribution-physical allocation fabric into the final jeans. After production, the jeans are sent to a distribution center that packages and ships various products. LS&Co. Physical allocation allocated emissions from the energy and material used For the fabric mill, LS&Co. allocated the GHG emissions by the total number of products shipped during a year. from fabric production using a mass allocation factor This method assumes that all units shipped result in the because mass is one of the main determinants of material same emissions, which LS&Co. considers to be reasonable and energy inputs during the milling process. The fabric since all products go through the same processes at the mill provided aggregated data on material use, energy distribution center. use, production outputs, and waste streams for their full production over the year. The fabric mill only produces Retail- physical allocation denim fabric, so LS&Co. was able to estimate emissions Each retail store sells a variety of products, which per product by dividing the total facility emissions by requires allocating total store emissions to each product the facility output. Emissions per product were then type. LS&Co. allocated emissions according to the retail applied to the total LS&Co. fabric order from the mill to floor space occupied by each product compared to the determine the total emissions attributable to LS&Co. entire store. They did this by determining the average floor space and emissions of a retail store along with the floor area (physical space) occupied by each product to estimate retail emissions per individual unit. [67]
- 70. g u id a n c e Box [9.1] Using physical relationships to allocate emissions from transportation Allocating emissions from transportation is necessary products and their emissions contributions because when one or more products are transported but a the fuel use per unit of product in a transport vessel company only knows the total emissions for the transport is dependent on the mass or volume of their load. To mode (e.g., a truck, train, aircraft, or vessel). determine which physical allocation factor best describes this relationship, a company should determine the Transportation example limiting factor of the transportation mode (typically mass A truck transports two products: fruits and vegetables. or volume). There is a clear physical relationship between the two Figure [9.3] Allocating emissions based on a mass physical factor fuel fruits 60% emissions fruits 60% load mass transportation vegetables 40% load mass vegetables 40% emissions In figure 9.3, the amount of fruits and vegetables the truck transports are limited by the mass of the products. However, if the fruits and vegetables are transported by rail and the limiting factor is the volume of products, the most appropriate allocation factor would be volume. Figure [9.4] Allocating emissions based on a volume physical factor fuel fruits 30% emissions fruits transportation 30% load volume vegetables vegetables 70% 30% emissions 70% load volume emissions Figure 9.4 shows how the emissions would be allocated using a volume allocation factor. [68] Product Life Cycle Accounting and Reporting Standard
- 71. CHAPTeR 09 Allocation electricity).In this example, system expansion would not economic allocation be appropriate if it was not known that the black liquor Economic allocation is the division of emissions from a created excess power or if a marginal emission factor was common process to the studied product and co-product(s) used as data for the electricity substitution. according to the economic values of the products when g u i d a n c e leaving the multi-output process. 9.3.3 Performing allocation Physical allocation When selecting an economic allocation factor, When performing physical allocation, the factor chosen companies should use the price of the co-product(s) should most accurately reflect the underlying physical directly after it leaves the common process (i.e., its value relationship between the studied product, co-product, prior to any further processing). When this direct price and process emissions and removals. For example, if the is not available or cannot be evaluated, market prices or mass of the process outputs determine the amount of prices at a later point of the life cycle may be used, but emissions and removals, choosing an energy content downstream costs should be subtracted to the fullest factor would not provide the most accurate allocation. extent possible. The market price is the value of the Examples of physical allocation factors include: product in a commercial market. • Mass of co-product outputs Other relationships • Volume of cargo transported The “other relationships” allocation method uses • Energy content of heat and electricity co-products established sector, company, academic, or other sources • Number of units produced of conventions and norms for allocating emissions when • Protein content of food co-products neither physical nor economic allocation is applicable. • Chemical composition When no established conventions are available and the other allocation methods are not applicable to the common process, a company may make assumptions GNP Company, makers of Just BARE Chicken GNP Company, a U.S. poultry producer, conducted a product as two potential allocation methods. The chicken breasts inventory on their Just BARE® Boneless and Skinless represent 16 percent of the chicken’s total mass and Chicken Breasts. Just BARE® products come from birds that about 35 percent of the revenue. While a range of receive no antibiotics and are fed special vegetarian feed products come from the whole chicken, the majority of formulations. The product package contains 2 to consumer demand is for the boneless, skinless breasts. 3 individual chicken breasts packaged for retail purchase. Other fresh chicken co-products such as tenders, thighs, Each package is traceable to the specific farm on which and drumsticks would not be produced without also the chicken was raised and the product is shipped to producing the chicken breasts. Additionally, about half of retail locations in the the weight of the chicken consists of inedible parts that net selling price continental United States. have a low selling price and are not sold in retail stores. data by meat cut Therefore, GNP Company identified economic allocation The energy and material were averaged over as the most appropriate method. inputs for Just BARE® a one-year period as well as other branded Using economic allocation, 35 percent of the facility’s to determine products are available on energy and material activity data were allocated to the the economic a facility-wide basis. GNP boneless, skinless breasts. Net selling price data by meat allocation factor. Company identified mass cut were averaged over a one-year period to determine and economic allocation the economic allocation factor. [69]
- 72. g u id a n c e on the common process in order to select an allocation Economic allocation is preferred when: method. When using assumptions, companies should • The physical relationship cannot be established (as assess the scenario uncertainty to determine how the described above) assumptions may impact the inventory results. (See • The co-products would not be produced using the chapter 10 for more guidance on assessing uncertainty.) common process without the market demand for the 9.3.4 Choosing between physical studied product and/or other valuable co-products and economic allocation (e.g., by-catch from lobster harvesting) Step 3 in figure 9.2 states that if a physical relationship • The co-products were a waste output that acquires between the studied product, co-product, and the value in the market place as a replacement for another emissions and removals of a common process is not material input (e.g., fly ash in cement production) applicable or cannot be established, then companies • The physical relationship does not adequately reflect should use economic or other relationships. Physical the relative emissions contributions relationships cannot be established when the following exAMPLe conditions apply: In the process of catching lobster, additional fish are often caught by default and sold as by-catch. By-catch is much • There is no data available on the physical relationship less valuable than lobster, but in some cases can account between the studied product, co-products, and the for a substantial portion of the mass output of the catching process emissions and removals (e.g., the process process. Economic allocation is preferred in this case because is operated by a supplier and that information is the co-product (by-catch) would most likely not be caught proprietary) in the same manner if the fisherman were not also catching • There are multiple co-products along with the studied lobster, and because a change in the physical output of product and no one common physical allocation factor products is not strongly correlated to a change in process is applicable (e.g., some outputs are measured in terms emissions (i.e., depending on the day more or less by-catch of energy and others in volume or mass) and lobster are possible using the same amount of fuel). However, in many cases it may not be clear whether a physical relationship can be established, and companies may Box [9.2] Allocating removals struggle to determine if an economic relationship is more applicable. In general, physical allocation is preferred when: CO2 removals that occur upstream from a common • A physical relationship between the studied product process also need to be allocated when part of and co-products can be established that reflects their the material that removed the CO2 from the relative emissions contributions atmosphere becomes a co-product. In the example • A change in the physical output of the studied product illustrating system expansion, black liquor contains and co-products is correlated to a change in the lignin and other biogenic materials separated from common process’s emissions (e.g., if more co-product the wood during pulping. A company needs to is produced more emissions occur) determine the amount of the original wood that • There is a strong brand influence on the market value is exiting the boundary as electricity, and then of the various co-products which does not reflect the subtract the equivalent amount of removals from relative emissions contribution of the outputs. (e.g., a the material acquisition stage. This is also true when process creates the same product with different brand a material that contributed to removals is recycled names that therefore has different prices, but the into another product’s life cycle. Correctly allocating relative emissions are the same) removals is important to avoid double counting among different products. [70] Product Life Cycle Accounting and Reporting Standard
- 73. CHAPTeR 09 Allocation 9.3.5Comparing allocation results 9.3.6 Methods for allocation due to recycling When one allocation method is not clearly more suitable Closed loop approximation method than another, companies should perform multiple The closed loop approximation method accounts for allocations with different methods and compare the the impact that end-of-life recycling has on the net g u i d a n c e results. This is particularly important when companies virgin acquisition of a material. Its name derives from are deciding whether physical, economic, or another the assumption that the material being recycled is used allocation method is more appropriate. If several methods to displace virgin material input with the same inherent are performed and similar results are obtained, the choice properties5. The closed loop approximation method is between the methods should not impact the inventory also known as the following: the 0/100 method; the end- results and the company should note this in the inventory. of-life approach as defined and supported by many in the report. If the allocation method(s) result in different metal industry6; the recyclability substitution approach GHG emissions, companies should select the allocation in the ILCD Handbook 7; and the closed loop8 method method that provides the more conservative result (e.g., defined in ISO 14044:2006 and shown with examples in the method that allocates more emissions to the studied ISO 14049:2000. product as opposed to the co-products). Since the closed loop approximation method is defined Companies are required to disclose and justify the methods as a method to allocate recycled materials that maintain used to avoid allocation or perform allocation. Companies the same inherent properties as its virgin material input, may also report a range of results as part of the qualitative the properties (e.g., chemical, physical) of the recycled uncertainty description in the inventory report. material have to be similar enough to the properties of the virgin material input to be used interchangeably without any additional changes to the product’s life cycle. A process map illustrating the closed loop approximation method is given in figure 9.5. Alcoa Alcoa, a leading producer of aluminum, performed aluminum ingot with the same inherent properties as a cradle-to-grave GHG inventory of their LvL One primary metal. Because of this, it can be assumed that aluminum truck wheel. Recycling occurs twice during the recycled metal displaces the production of virgin the life cycle of the wheel. First, scrap created during metal in another product’s life cycle. the wheel fabrication process is sent to be recycled in To account accurately for the recycling activity, Alcoa an ingot casting facility, calculated the mass of recycled metal during the wheel and second, the wheels achieved a fabrication process using a mass balance. For end-of- themselves are recycled 10% reduction life recycling, Alcoa assumed a recycling rate of 95 at the end-of-life. Both in the total percent based on peer-reviewed literature data specific metal streams fall into the inventory results to the recycling rates of aluminum in the commercial category of the closed loop compared to an vehicle sector. approximation method as described in the standard. LvL One aluminum Alcoa achieved a 10 percent reduction in the total The recycled metal is wheel with inventory results compared to an LvL One aluminum processed, remelted, no recycling wheel with no recycling. and cast into secondary [71]
- 74. g u id a n c e Figure [9.5] Example process map illustrating the closed loop approximation method material acquisition distribution & pre-processing production & storage use end-of-life waste material waste treatment output recovered virgin material production distribution use collection material acquisition process process process process & pre-processing output assumed virgin recycled recycled materials material recovery material material pre-processing facility (MRF) displacement output movement of material through the lifecycle attributable processes Material recovery facility and recycled material Virgin material displacement factor: Recycling preprocessing are general terms for the attributable rate of material (recycled output/virgin material input) processes needed to convert recovered material (e.g., multiplied by the attributable processes for virgin material collected for reuse) into a recycled material material acquisition and preprocessing. output ready to be used in another product system. The virgin material displacement factor is calculated Specific examples of potential attributable processes only for the virgin material that has the same inherent include sorting, shredding, cleaning, melting, and deinking. properties as the recycled material. For products with In the closed loop approximation method no emissions several material inputs, only the attributable processes or removals associated with recycling are allocated associated with the displaced material are considered. to another product system. However, the creation of Virgin material acquisition and preprocessing impacts recyclable material results in the displacement of virgin should be calculated assuming that all material input is material and the emissions and removals associated with virgin. In the case where recycled material is also used as an its creation. input, the material acquisition and preprocessing impacts The following illustrates how to calculate inventory are calculated assuming all virgin input in order to correctly results for the material acquisition, end-of-life stage, apply the closed loop approximation method. Alternatively, and virgin material displacement using the closed loop to avoid double accounting, the recycled content approach approximation method as illustrated in figure 9.5. can be applied to the recycled input with a closed loop approach applied to the remaining net material output Virgin material acquisition and preprocessing stage: (displacing only the primary material input). However this All attributable processes due to virgin material acquisition could be difficult and therefore is not advised. and preprocessing (assumes all input material is virgin). The closed loop approximation method can also be used End-of-life stage: All attributable processes due to end- for recycling within a life cycle stage (e.g., the creation of-life (including recycling). In figure 9.5 this includes and reuse of scrap during production). collection9, waste treatment, material recovery facility, and preprocessing of recycled material. [72] Product Life Cycle Accounting and Reporting Standard
- 75. CHAPTeR 09 Allocation Figure[9.6] Example process map illustrating the recycled content method material acquisition distribution & pre-processing production & storage use end-of-life g u i d a n c e waste material waste treatment output virgin virgin virgin material material material pre- acquisition input processing production distribution use collection process process process process material recycled recovery material recycled facility pre- material (MRF) processing input recovered material output movement of material through the lifecycle attributable processes Recycled content method The recycled content method allocates the recycling The recycled content method does not include process emissions and removals to the life cycle that attributable processes due to recovered material output. uses the recycled material. The recycled content While a virgin material displacement factor is not included method can be used in open loop situations10 that in this method, figure 9.6 does illustrate two potential include recycled material inputs and outputs. Figure benefits due to recycling in the studied product’s 9.6 illustrates a simplified process map for a product inventory: the reduction in the amount of waste entering that uses the recycled content method11. The recycled waste treatment and the reduction of upstream virgin content method is also referred to as the cut–off material acquisition. Reducing the amount of waste method or the 100-0 method. entering waste treatment reduces the GHG emissions The following describes the calculation of the material from waste treatment in the end-of-life stage. Reducing acquisition and end-of-life stages using the recycled upstream virgin material acquisition reduces the GHG content method as illustrated in figure 9.6. emissions and removals from material acquisition if the recycling processes are less GHG intensive than virgin Material acquisition and preprocessing stage: extraction. If this is not the case (e.g., recycling processes All attributable processes due to virgin and recycled are more GHG intensive than virgin inputs), it is possible material acquisition and preprocessing. In figure 9.6 this that using virgin inputs would result in a lower total includes virgin material preprocessing, virgin material product inventory than using recycled inputs. This is acquisition, recycled material preprocessing, and material an example of when focusing on one impact category recovery facility. may drive companies to make product decisions that End-of-life: All attributable processes due to end-of-life are desirable for one impact (e.g., GHG emissions) treatment of waste material output. In figure 9.6 this but unfavorable to another (e.g., material depletion). includes collection and waste treatment. Companies are encouraged to consider all applicable environmental metrics before making reduction decisions, as discussed in chapter 14. [73]
- 76. g u id a n c e 9.3.7 Choosing between closed loop There may be situations where a company feels neither approximation and the recycled method is appropriate for a given recycled material content method input or output. In these cases the method used should In cases where both the closed loop approximation and abide by the specifications given in the requirements recycled content methods are equally applicable to the section and be referenced from available sector guidance, studied product, the following guidance provides insight product rules, technical reports, journal articles, or on which method is most appropriate in certain situations. other standards. For example, companies with paper products may want to use the “number of subsequent The recycled content method should be used in the uses” method recommended by the American Forest following situations: and Paper Association for recycling cellulosic fiber in • When the product contains recycled input, but no paper products.12 Another company may feel economic recycling occurs downstream allocation is more appropriate for its product’s inventory • When the market for the recycled material is saturated and therefore reference ISO 14049:2000.13 If a company (e.g., not all material that is recovered is used as a is using a method that is not published, the company is recycled input, supply exceeds demand) and therefore strongly encouraged to include details on the method, the creation of recycled material may not displace the either in the inventory report or as a supplementary extraction of virgin material document, and to have the method externally verified to • When the content of recycled material in the product ensure its conformance with this standard. is directly affected by the company’s activities alone, When it is not obvious which method is most appropriate, and therefore the company has control over how companies should perform a scenario uncertainty much recycled material input to procure (which could assessment (e.g., sensitivity analysis) on the potential potentially be used as a reduction mechanism) methods and include the results in the inventory report • The time period of the product’s use stage is long and/ (see chapter 10 for more information on uncertainty). or highly uncertain and therefore the amount of material recycled at the end-of-life is also highly uncertain Box [9.3] Recycling in a cradle-to-gate inventory The closed loop approximation method should be used in the following situations: As defined in chapter 7, the boundary of a cradle-to- • When the recycled content of the product is unknown gate inventory does not include the use or end-of- because recycled material is indistinguishable from life stages. If an intermediate product has recycled virgin material in the market inputs, companies can use the recycled content • When the market for the recycled material is not method and account for the material recovery saturated (e.g., all material that is recovered is used facility (MRF) and recycling process emissions and as a recycled input, demand exceeds supply) and removals for that input. If an intermediate product therefore creating more recycled material is likely to is known to be recycled at its end-of-life regardless increase the amount of recycled material used of its function during use, companies may report • When the time period of the product’s use stage is this separately in the inventory report along with short and/or well known any other end-of-life information that may be useful to a stakeholder. Companies may include end-of-life recycling in the inventory results for an intermediate product only if the company knows the function of the final product and performs a cradle-to-grave inventory. [74] Product Life Cycle Accounting and Reporting Standard
- 77. CHAPTeR 09 Allocation 9.3.8Collecting recycling data To abide by the attributional approach of the standard, aggregates recycled materials, and it is known that some data used to determine the amount of recycled material inherent property change occurs, companies should output is based either on specific recycling data of a assume a percentage of property loss based on other g u i d a n c e product, or on average recycling data for the product in available data. Examples of other available data include the geographic location where the product is consumed reduction in economic value or percentage loss of material (as defined by the use profile). Recycling data is subject to property such as elasticity. Where it is not possible to the same requirements and guidance given in chapter 8 disaggregate the data but some portion of the material for data collection and quality. properties are known to change, it should be clearly noted as a data quality limitation in the inventory report. Companies using the closed loop approximation method should ensure that the data used to determine recycled material output excludes material where the inherent properties have changed. Where the only data available Anvil Knitwear Anvil Knitwear, Inc. performed a cradle-to-grave GHG for material acquisition and preprocessing as virgin inventory on two of their t-shirt lines: one that contains yarn. However, with the additional guidance provided a pre-consumer recycled yarn input and the other a post- by this standard and during the road testing process, consumer recycled yarn input. The AnvilSustainable™ Anvil determined that the recycled content method was t-shirt is made from a blend of transitional cotton and also appropriate for the AnvilRecycled® t-shirt. Anvil recycled polyester (from recycled plastic bottles). The performed the recycled content method by including AnvilRecycled® t-shirt is produced from yarn spun from the transport, cleaning, and production of the yarn recycled textile waste clippings from textile cut and sew made from recycled textile clippings as the attributable operations. Additionally, clippings from the cut and sew processes for the acquisition and preprocessing of the operations of the AnvilRecycled t-shirt are sold as a ® yarn. They also assumed no attributable processes for the recycled material output. end-of-life processing of the sold clipping from their cut and sew operations because they are used as a recycled The AnvilSustainableTM t-shirt contains 50 percent input into other product life cycles. The use of the post-consumer Polyethylene terephthalate (PET) from recycled content method reduced the GHG inventory of recycled plastic bottles and after use is assumed to the AnvilRecycled® t-shirt be disposed of in a conventional landfill. Because no the recycled content significantly compared to recycling occurs at the end-of-life, Anvil used the recycled method reduced the the inventory conducted content method to account for the recycled PET input. GHG inventory of assuming a virgin yarn The attributable processes for the material acquisition the AnvilRecycled® emission factor. The and preprocessing of recycled PET included the curbside t-shirt significantly additional specificity collection, sorting, and flaking of PET bottles. compared to the provided in this standard However, accounting for recycling in the AnvilRecycled® inventory conducted gave Anvil confidence t-shirt was more challenging because of the pre-consumer that they were using assuming a virgin recycled yarn input and output. In previous assessments, an established and yarn emission factor. Anvil took a conservative approach of assuming the accepted recycling pre-consumer yarn input had the same emission factor allocation method. [75]
- 78. g u id a n c e Box [9.4] Comparing closed loop approximation and the recycled content method The closed loop approximation and recycled content method allocate emissions and removals differently, and choosing one method over the other can produce different inventory results. The following simplified example highlights this difference: in this case both methods are equally appropriate for a product that has virgin and recycling material input, recycled material output, and waste. example parameters Data Value Units Material input 5 tons Material output 5 tons Recycled material input 40% Percent of total input Virgin material input 60% Percent of total input Recycled material output 25% Percent of total output Waste output 75% Percent of total output Virgin material acquisition and preprocessing 10 kg CO2e/ton Recycled material acquisition (MRF) and preprocessing 3 kg CO2e/ton Waste treatment 5 kg CO2e/ton example Results Inventory results (CO2e) Recycled content Closed loop method approximation Material acquisition and preprocessing 36 50 End-of-life 19 23 Virgin material displacement factor 0 [13] Total 55 60* *Total = material acquisition & pre-processing + end-of-life - virgin material displacement factor [76] Product Life Cycle Accounting and Reporting Standard
- 79. CHAPTeR 09 Allocation Box[9.4] Comparing closed loop approximation and the recycled content method (continued) Although in this example using the recycled content Additionally, a disclaimer is required as part of the g u i d a n c e method results in lower emissions and removals inventory report to avoid incorrect comparisons of allocated to the studied product, a different scenario inventory results based on different allocation methods may have the opposite results. To avoid the misuse (see chapter 13 for more details). In cases where choices or misinterpretation of methodological choices, the are needed in a general standard to accommodate a standard includes the following requirements related large range of products, companies are encouraged to recycling: to look towards available product rules and sector guidance to ensure consistency and comparability (if • Disclose and justify the method used for recycling; desired) within a product category or sector. Companies • Use that same method consistently over time to track can choose a method other than the recycled content performance, or if the method changes recalculate the or closed loop approximation based on product rules or base inventory as required in chapter 14; and sector guidance as long as this is disclosed and justified • Disclose the calculated virgin material displacement in the inventory report. separately. The standard also recommends that companies include quantitative uncertainty results in their inventory report (e.g., sensitivity analysis). endnotes 1 The term “common process” can be one or more processes that 9 Collection may be considered part of the material recovery facility require allocation. in some product life cycles. 2 As defined in ISO 14044:2006, 4.3.4.3. 10 Recycled material that does not leave a product system 3 In some LCA literature, this method is known as the substitution (e.g., scraps that do not leave the control of the production or avoided-burden method. company) is an example of a closed loop situation. Material that 4 Steps adapted from ISO 14044:2006, 4.3.4.2. is recycled at the end-of-life and then used in a different product 5 A true closed loop recycling scenario occurs when the recycled (e.g., tires being recycled into asphalt) is an example of an open material does not leave the studied product’s life cycle and loop situation. therefore does not require allocation. 11 The collection process is listed as an attributable end-of-life 6 John Atherton, “Declaration by the Metals Industry on Recycling process; however, the location of this process depends on how Principles,” International Journal of Life Cycle Assessment, 12 no. the recycled material is collected, as discussed above and in 1 (2007):59-60. chapter 7. 7 European Commission - Joint Research Centre - Institute for 12 International Working Group, Life Cycle Inventory Analysis: Environment and Sustainability, International Reference Life Enhanced Methods and Applications for the Products of the Cycle Data System (ILCD) Handbook - General guide for Life Cycle Forest Industry. (Washington DC: American Forest and Paper Assessment - Detailed guidance. Association,1996). 8 ISO 14044:2006 defines open and closed loop recycling as well 13 International Organization for Standardization, ISO 14049:2000, as open and closed loop allocation procedures. In ISO 14044, an Environmental management — Life cycle assessment — open loop recycling situation where there is no change in the Examples of application of ISO 14041 to goal and scope definition inherent properties of the material is treated using a closed loop and inventory analysis. Geneva. allocation procedure. [77]
- 80.
- 81. g e qd a rn ec m e n t s r u i u i e 10.1 Introduction T he term uncertainty assessment refers to a systematic procedure to quantify or qualify the uncertainty in a product inventory. Understanding uncertainty can be crucial for properly interpreting inventory results. Identifying and documenting sources of uncertainty can assist companies in understanding the steps needed to improve inventory quality and increase the level of confidence users have in the inventory results. Because the audience for a product inventory report is diverse, companies should make a thorough yet practical effort to communicate the level of confidence and key sources of uncertainty in the inventory results. This chapter provides requirements and guidance to 10.2 Requirements help companies identify, assess, and report qualitative information on inventory uncertainty. Detailed Companies shall report a qualitative descriptions of quantitative approaches to assess statement on sources of inventory uncertainty, and an uncertainty calculation tool are uncertainty and methodological choices. available at (www.ghgprotocol.org). While remaining Methodological choices include: current with leading science and practice, the chapter • Use and end-of-life profile is intended to favor practicality and feasibility for companies with a range of uncertainty expertise. • Allocation methods, including allocation due to recycling • Source of global warming potential (GWP) values used • Calculation models See table 10.2 for guidance on reporting on these choices. [79]
- 82. g u id a n c e Figure [10.1] Iterative process of tracking and evaluating uncertainty improve quality in areas of high uncertainty establish set the collect data allocate assess calculate perform report the scope boundary assess data data uncertainty inventory assurance inventory quality (if needed) results results assessment uncertainty identify and track uncertainties prioritize, quantify document and report • parameter uncertainty and/or evaluate uncertainty • scenario uncertainty • model uncertainty 10.3 Guidance 10.3.1 Role of the uncertainty assessment process The categories are not mutually exclusive, but they are Figure 10.1 illustrates the role of uncertainty assessment evaluated and reported in different ways. For example, within the GHG inventory process. Companies should the same uncertainty source might be characterized as keep a list of uncertainties throughout the inventory either a component of parameter uncertainty and/or as a process in order to facilitate the uncertainty assessment, component of scenario uncertainty. assurance, and reporting processes. As shown in figure 10.1, these types of uncertainties arise While the reporting requirements are focused on throughout the stages of the GHG inventory compilation qualitative descriptions, quantitative assessments of process. Table 10.1 illustrates these various types of uncertainty can assist companies in prioritizing data uncertainties and how each type can be presented. quality improvement efforts on the sources that Parameter uncertainty contribute most to uncertainty and in understanding the Parameter uncertainty is the uncertainty regarding influence methodological choices have on the overall whether a value used in the inventory accurately product inventory. A quantitative approach can also add represents the process or activity in the product’s life clarity and transparency in reporting on uncertainty to cycle. If parameter uncertainty can be determined it can inventory report readers. When available, companies typically be represented as a probability distribution of should report quantitative uncertainty results in the possible values including the value used in the inventory inventory report. Guidance on quantifying uncertainty can results. In assessing the uncertainty of a result, parameter be found at (www.ghgprotocol.org). uncertainties can be propagated within a model to 10.3.2 Types of uncertainty provide a quantitative measure (also as a probability The results of a GHG inventory may be affected by various distribution) of uncertainty in the final inventory result. types of uncertainty, which can arise from different Single parameter uncertainty sources within the inventory process. Uncertainty is Parameter uncertainty addresses the question, how well divided into three categories: parameter uncertainty, do the data that are used to represent a parameter fit scenario uncertainty and model uncertainty, which are the process in the product inventory. Single parameter defined in the following section. uncertainty refers to incomplete knowledge about the true value of a parameter1. It can arise in relation to three data types: direct emissions data, activity data, and emission [80] Product Life Cycle Accounting and Reporting Standard
- 83. CHAPTeR 10 AssessingUncertainty Table [10.1] Types of uncertainties and exAMPLe corresponding sources An emission factor for the production of the plastic used in a toner cartridge is 4.5 kg of CO2 per kg of plastic resin Types of uncertainty Sources produced. The emission factor data might be based on a g u i d a n c e limited sampling of producers of such resin and may source Parameter uncertainty • Direct emissions data from an older timeframe or different geography than that • Activity data in which the resin in question is being produced. Therefore, • Emission factor data there is parameter uncertainty in the emission factor value • Global warming being used. potential (GWP) Propagated parameter uncertainty factors Propagation of parameter uncertainty is the combined Scenario uncertainty • Methodological effect of each parameter’s uncertainty on the uncertainty choices of the total computed result. Methods are available Model uncertainty • Model limitations to propagate parameter uncertainty from single data points. Two prominent methods applied to propagation of parameter uncertainty include random sampling (such as the Monte Carlo method) and analytical formulas (such Box [10.1] Uncertainty of global warming as the Taylor Series expansion method). These methods potential factors are described in the quantitative uncertainty guidance available at (www.ghgprotocol.org). The uncertainty of the direct global warming exAMPLe potential (GWP) for CO2, CH4, N2O, HFCs, and PFCs Company A inventoried their printer cartridge product is estimated to be ± 35 percent for the 90 percent and determined that the total inventory results equaled confidence interval (5 percent to 95 percent of 155 kg CO2e per functional unit of printing of 50,000 the distribution). This is based on information pages. The activity data, emission factor data and GWPs provided in the IPCC’s Fourth Assessment Report, applied in this calculation each have a level of individual and the range given is to reflect the uncertainty parameter uncertainty. Using the Monte Carlo method, the in converting individual GHG emissions into units propagated parameter uncertainty assessment shows that of CO2e. As identified in the requirements section there is a 95 percent confidence that the true value of the 10.2, companies are required to report the source product inventory is between 140 and 170 kg CO2e. This of GWP values used. If companies choose to can also be presented as the inventory total is 155 kg CO2e quantify inventory uncertainty they may include the (+/-15 kg CO2e)2 per functional unit. uncertainty of GWP values in their calculations. Scenario uncertainty While parameter uncertainty is a measure of how close the data used to calculate the inventory results are to factors. Measurement errors, inaccurate approximation, the true (though unknown) actual data and emissions, and how the data was modeled to fit the conditions of the scenario uncertainty refers to variation in results due to process all influence parameter uncertainty. methodological choices. The uses of standards reduce For example, two data points of similar measurement scenario uncertainty by constraining choices the user may precision may result in very different levels of uncertainty make in their methodology. For example, the attributional depending on how the data points represent the process’s approach and boundary setting requirements standardize specific context (i.e., in temporal, technological, and the inventory approach for all products. However, when geographical representativeness, and completeness terms). there are multiple methodological choices available in the [81]
- 84. g u id a n c e standard scenario uncertainty is created. Methodological exAMPLe choices include but are not limited to: A model of soy production is involved in predicting emissions from the production of the cartridge’s soy-based ink. Emissions • Allocation methods of N2O due to application of nitrogen fertilizers are based on a • Product use assumptions linear modeling of interactions of the fertilizer with the soil and • End-of-life assumptions plant systems. As these interactions are more complicated than To identify the influence of these selections on results, the model assumes, there is uncertainty regarding the emissions parameters (or combinations of parameters) are varied in resulting from this model. an exercise known as scenario analysis. Scenario analysis is 10.3.3 Reporting qualitative uncertainty also commonly called sensitivity analysis. Scenario analysis Companies are required to report a qualitative description can reveal differences in the inventory results due to of uncertainty sources and methodological choices methodological choices.3 made in the inventory. These include the use and end- exAMPLeS of-life profiles for cradle-to-grave inventories, allocation ExAmPLE 1 methods (including recycling allocation methods), the A company may choose to allocate facility electricity source of GWP used, and any calculation models used to consumption between the toner production and other quantify emissions and removals. production lines using the physical allocation factor of the Quantitative uncertainty assessment is not required, number of units produced. Using this factor, 30 percent of the but such an assessment is desirable since it can provide electricity consumption is allocated to the toner production a more robust result that can identify specific areas of process. However, allocating the electricity by the mass of high uncertainty to track over time. Companies may wish products results in 40 percent of the electricity consumption to present both qualitative and quantitative uncertainty allocated to the toner production process. information in the inventory report. Companies may ExAmPLE 2 also describe their efforts to reduce uncertainty in Company data indicates that 40 percent of the toner future revisions of the inventory. Table 10.2 includes the cartridges are recycled. Therefore, it can be assumed that required qualitative uncertainty sources to report. 40 percent of the plastic in the cartridge’s casing is recycled. 10.3.4 Uncertainty in comparisons For both the reporting company and stakeholders, it may be Comparative uncertainty differs from the various types interesting to consider how a change in the overall recycling of uncertainty previously mentioned in that more than rate would change the inventory results. From an individual one product or system is considered. This standard is consumer’s perspective, there might be interest in how the not intended to support product comparison beyond inventory results would change when an individual recycles performance tracking (as described in chapter 1). (100 percent rather than 40 percent recycling) or does not However, even within a product inventory, comparative recycle (0 percent recycling) the cartridge. uncertainty may arise, such as when comparing the Model uncertainty impact of one process or stage to another process or Model uncertainty arises from limitations in the ability of stage in the product’s life cycle. the modeling approaches used to reflect the real world. Whenever considering uncertainty in comparisons, the Simplifying the real world into a numeric model always uncertainty ranges of each process, life cycle stage, or introduces some inaccuracies. product should not be directly compared; instead, the In many cases, model uncertainties can be represented– uncertainty in the comparison itself should be assessed. at least in part–through the parameter or scenario That is, rather than comparing the distribution of A approaches described above. However, some aspects and the distribution of B, companies may assess the of model uncertainty might not be captured by those distribution of A divided by B. This can be done for both classifications and are otherwise very difficult to quantify. parameter uncertainty and scenario uncertainty. [82] Product Life Cycle Accounting and Reporting Standard
- 85. CHAPTeR 10 AssessingUncertainty Table [10.2] Qualitative description of required uncertainty sources Source of uncertainty Qualitative description g u i d a n c e Scenario uncertainty • Use profile4 Describe the use profile of the product. If more than one use profile was applicable, disclose which method was used and justify the choice. • End-of-life profile4 Describe the end-of-life profile of the product. If more than one end- of-life profile was applicable, disclose which method was used and justify the choice. • Allocation method(s) Describe any allocation problems in the inventory and which allocation method was used. If more than one allocation method was applicable, disclose which method was used and justify the choice. • Recycling allocation method(s) Disclose and reference which method was used (closed loop approximation method or recycled content method). Parameter uncertainty5 • Global warming potential factors List the source of global warming potential (GWP) factors used. Model uncertainty • Model sources not included in Describe the models, identify their published source, and identify scenario or parameter uncertainty areas where they may deviate from real world conditions. When comparing the uncertainties between two or more endnotes processes, stages, or products, it is important to track any 1 Parameter refers to the value(s) assigned to processes, inputs, common inputs, outputs, and/or processes. When the outputs, within the product’s life cycle. two items being compared share common elements their 2 In some cases, such as in the use of log-normal distributions, the distribution around the mean is not symmetrical and the uncertainties are likely correlated, which should not be upper and lower confidence levels might need to be specified included in the uncertainty comparison result. Because separately (e.g., “-10, +20”, rather than “+/- 15). of correlation, a comparison of two relatively uncertain 3 Mark A. J. Huijbregts, “Application of uncertainty and variability results could have relatively high certainty. Identifying in LCA. Part I: A General Framework for the Analysis of correlations is important in tracking any changes in the Uncertainty and Variability in Life Cycle Assessment.”International product’s inventory over time. Journal of Life Cycle Assessment, 3 no. 5 (1998):273 – 280. 4 For cradle-to-grave inventories. exAMPLe 5 The description of single parameter uncertainty is included in the The manufacturer of the toner cartridge determines the data quality reporting requirements (see chapter 7). product inventory’s parameter uncertainty is +/- 20 percent. The company develops a lighter weight cartridge body, reducing 30 percent of the weight of that component and 3 percent of the total product inventory result. Besides the difference in weight, the processes in the two inventories are the same and the data sources are also consistent. Therefore, while both the original and revised inventories each have a parameter uncertainty of +/- 20 percent and the difference in their results is 3 percent, the company can be confident that the new design has a lower GHG impact. [83]
- 86. 11 Calculating InventoryResults
- 87. g e qd a rn ec m e n t s r u i u i e 11.1 Introduction T his chapter outlines key requirements, steps, and procedures involved in quantifying the GHG inventory results of the studied product necessary for public reporting. 11.2 Requirements Companies shall apply a 100 year global Companies shall quantify and report the warming potential (GWP) factor to GHG total inventory results in CO2e per unit of emissions and removals data to calculate analysis, which includes all emissions and the inventory results in units of CO2 removals included in the boundary from equivalent (CO2e). Companies shall report biogenic sources, non-biogenic sources, the source and date of the GWP factor used. and land-use change impacts. The global warming potential (GWP) is a metric used to Once data collection, allocation, and data quality calculate the cumulative radiative forcing impact of assessments are complete, companies shall quantify multiple GHGs in a comparable way. When emissions and report the total inventory results in CO2e per unit or removals are multiplied by their respective GWP, of analysis (e.g., functional unit). For more information they become CO2 equivalents (CO2e). Companies on the unit of analysis please refer to chapter 6. should use GWP values from the Intergovernmental Panel for Climate Change (IPCC) Fourth Assessment Report, published in 2007, or the most recent IPCC values when the Fourth Assessment Report is no longer current. Although the IPCC provides GWP metrics for different time periods (e.g., 20 and 500 years), 100 years is used most often by programs and policies as the median metric and therefore shall be used to calculate inventory results in this standard. [85]
- 88. r e qu i r e m e n t s In addition to the total inventory results, with a better understanding of what type of emissions companies shall quantify and report: and removals dominate the inventory and where they occur along the life cycle. • Percentage of total inventory results by life cycle stage Companies shall not include the following • iogenic and non-biogenic emissions and B when quantifying inventory results: removals separately when applicable • Weighting factors for delayed emissions • Land-use change impacts separately when applicable • Offsets • Cradle-to-gate and gate-to-gate • Avoided emissions inventory results separately or a clear statement that confidentiality is a limitation to providing this information In a life cycle, particularly for products that have long use and end-of-life time periods, emissions may occur at different points in time and have different impacts Separately calculating and reporting these components of on the atmosphere. Some methodologies try to capture the inventory results adds transparency to the product’s this in the life cycle results by applying a weighting life cycle and provides companies and their stakeholders factor to account for emissions delayed over time (also [86] Product Life Cycle Accounting and Reporting Standard
- 89. CHAPTeR 11 CalculatingInventory Results r e q u i r e m e n t s referred to as emission discounting). In this standard, Companies shall report when carbon contained in inventory results shall not be calculated with weighting a product or its components is not released to the factors. This is true for both biogenic and non-biogenic atmosphere during waste treatment and therefore is emissions, removals, and products. Companies may show considered stored. The amount of carbon stored will the impact of delayed emissions and removals separately depend on the waste treatment process, the scientific from the inventory results. It is important to note that understanding of the product’s degradation in certain if a weighting factor is applied to calculate the impact environments, and the time period chosen. More of delayed emissions or removals in the end-of-life information on time period is available in chapter 7. stage, the same factor needs to be applied to end-of-life In cradle-to-gate inventories, contained carbon leaves the allocation of co-products and recycled materials. boundary of the inventory as part of the intermediate Offsets and avoided emissions are both classified as product. For intermediate product cradle-to-gate inventory actions that occur outside the boundary of the product’s results to be useful to a downstream customer doing a final life cycle. Offsets are emission credits (in the form of product cradle-to-grave inventory, companies shall report emission trading or funding of emission-reductions1 the amount of carbon contained in the product leaving the projects) that a company purchases to offset the studied boundary (e.g., gate). Companies may include additional product’s inventory results. Avoided emissions are information about the end-of-life properties of an quantified as emissions reductions that are indirectly intermediate product separate from the inventory results. caused by the studied product or a process that occurs in the studied product’s life cycle. Avoided emissions as defined here are not the same as emissions reductions that occur due to directly attributable reduction projects, or allocated emissions using the system expansion allocation method. Purchased offsets and avoided emissions shall not be deducted from the product’s total inventory results, but may be reported separately. Guidance on using offsets to meet reduction targets is available in chapter 14. Companies shall report the amount of carbon contained in the product or its components that is not released to the atmosphere during waste treatment, if applicable. For cradle-to-gate inventories, companies shall report the amount of carbon contained in the intermediate product. Many products contain carbon as part of their chemical makeup or composition. This carbon, which can be biogenic or non-biogenic, is either recycled or reused in another product cycle, released as CO2 or CH4 during waste treatment (due to combustion or decomposition), or stored as a result of waste treatment (due to land filling or other treatments that prevent decomposition). [87]
- 90. g u id a n c e 11.3 Guidance 11.3.1 Calculating the inventory results of the When direct emissions data has been collected, an emission studied product factor is not needed and the basic equation to calculate Companies should follow these steps when calculating inventory results for an input, output, or process is: the GHG impact of the studied product: kg CO2e = Direct Emissions Data x GWP (kg GHG) [kg CO2e/kg GHG] 1. Choose a GWP value Because radiative forcing is a function of the concentration of GHGs in the atmosphere, and because If direct emissions data and activity data are available, the methodology to calculate GWP continues to companies may find benefit in completing and calculating evolve, GWP factors are reassessed every few years both ways as a cross-check. by the IPCC. The most current GWP factors published When CO2 is removed from the atmosphere by the by the IPCC at the time of this standard’s publication product during the use phase (e.g., CO2 uptake by are the factors published in the Fourth Assessment cement), the removal data may come in the form of a Report (2007). The Fifth Assessment Report is set removal rate per mass or volume of product. However, to be completed in 2013-2014 and will likely contain the most typical form of atmospheric CO2 removal is due updated factors. A table of the most recent GWP to biogenic uptake during photosynthesis. In this case, values is available at (www.ghgprotocol.org). companies usually only know the amount of biogenic Companies may choose to use other GWP values. For carbon contained in the material or product. To convert example, some companies may want to use the second this to CO2, the amount of carbon is multiplied by the assessment report values to be consistent with national ratio of molecular weights of CO2 (44) and carbon (12), inventories following the UNFCCC. Although it is required respectively. CO2 removal data, like direct emissions data, that companies calculate inventory results using the does not need to be multiplied by an emission factor and 100-yr GWP, companies may choose to calculate and can simply be multiplied by the GWP of 1 for CO2. separately report results using a 20 or 500 year GWP kg CO2e = kg Biogenic Carbon x (44/12) x GWP factors or other impact assessment metrics such as global [kg CO2e/kg GHG] temperate potential (GTP) if they feel this would be useful information to their stakeholders. Alternatively, companies may want to sum all emissions Multipliers or other corrections to account for radiative and removals per GHG per unit of analysis before applying forcing may be applied to the GWP of emissions arising the GWP. This approach is recommended if companies from aircraft transport. When used, the type of multiplier wish to have the option of reporting results separately by and its source should be disclosed in the inventory report. GHG or using a different GWP value. 2. Calculate CO2e using collected data Companies should be cognizant of significant figures and The following equations illustrate how to calculate CO2e rounding rules when calculating emissions and removals, for an input, output, or process based on activity data, particularly when using emissions factors from a life emission factors, and GWP. More information on data cycle database or software program that automatically collection and sources of emission factors are available in calculates emissions when activity data are given as an chapter 8. input. The number of significant figures of the emission data should not exceed that of the activity data or When process or financial activity data is collected, the emission factor with the least significant figures used in basic equation to calculate CO2e for an input, output, or the calculation. process is: kg CO2e = Activity Data x Emission Factor x GWP (unit) [kg GHG/unit] [kg CO2e/kg GHG] [88] Product Life Cycle Accounting and Reporting Standard
- 91. CHAPTeR 11 CalculatingInventory Results g u i d a n c e 3. Calculate total inventory results The total CO2e/unit of analysis represents the amount (CO2e/unit of analysis) of CO2 equivalent GHGs entering the atmosphere as a Once the inventory results in CO2e are calculated, the result of fulfilling the function of a product. Therefore, company needs to ensure that all results are on the same emissions are treated as positive values and removals are reference flow basis. For example, if the reference flow treated as negative values. for the studied product is 10 kg and the inventory results Land-use change impacts are included in the total are per kg of product, all the inventory results need to inventory results if they are attributable to the studied multiplied by 10. Because the reference flow represents product. Guidance on calculating land-use change impacts to amount of product needed to fulfil the unit of is included in Appendix B. If no land-use change impacts analysis, results on the reference flow basis are summed are attributable and no removals occur during the together to calculate the total CO2e/unit of analysis. More product’s life cycle, the total inventory results are simply information on reference flows and unit of analysis is the sum of emissions in CO2e per reference flow. available in chapter 6. The following components make up the total inventory results: Total CO2e CO2e Emissions (Biogenic) CO2e Removals (Biogenic) = – + unit of analysis reference flow reference flow CO2e Emissions (Non-Biogenic) CO2e Removals (Non-Biogenic) CO2e Land Use Change Impacts – + reference flow reference flow reference flow [89]
- 92. g u id a n c e 4. Calculate percentage of total inventory If companies are unsure whether emissions are from a results by life cycle stage biogenic or non-biogenic source, they should include The inventory results per life cycle stage are calculated those emissions as non-biogenic. In some cases, a product using the same equation given in step 3 above. Land-use may have no biogenic emissions, biogenic and non- change impacts and removals are typically included in the biogenic removals, or land-use change impacts. If only material acquisition and preprocessing or production stage non-biogenic emissions occur in the inventory, companies depending on the perception of the reporting company. may report only the total inventory results and note this In some cases removals may occur during the use stage in the inventory report. (e.g. the absorption of CO2 by cement). If the removals are 6. Calculate cradle-to-gate and gate-to-gate large enough to create a negative percent impact from that inventory results separately stage, this should be noted clearly in the inventory report. In addition to reporting separately the inventory result The following equation is used to determine the components, reporting inventory results by cradle-to-gate percentage of total inventory results by life cycle stage: and gate-to-gate gives some insight into what emissions and removals occur under the control of the reporting Percentage per CO2e per life cycle stage = x 100 company. However, it is recognized that reporting gate- life cycle stage Total CO2e inventory results to-gate inventory results may jeopardize the reporting company’s confidentiality. If this is the case, companies As required in chapter 9, the virgin material displacement may state this as a limitation to reporting these results factor is reported separately from the inventory results separately. For cradle-to-gate inventories, the total by life cycle stage to avoid a negative percent impact in inventory results are the cradle-to-gate results and the end-of-life stage. The percentage impact of the virgin therefore do not need to be repeated here. material displacement can be reported next to the end- of-life stage results as shown in the reporting template 11.3.2 Offsets and avoided emissions (available at www.ghgprotocol.org). The virgin material As previously stated, offsets are emission credits (in the displacement factor is included as part of the total form of emission trading or funding of emission-reduction inventory results. projects) that a company purchases to offset the impact of the studied product’s emissions. Companies typically 5. Separate reporting of biogenic and purchase offsets for one of two reasons: to meet a non-biogenic emissions and removals and reduction goal that they cannot reach with reductions land-use change impacts, when applicable alone, or to claim a product as carbon neutral. Companies Separate reporting of the total inventory result are encouraged to set reduction targets and meet these components provides transparency to the reporting with absolute reductions. However if a company wishes to company and their stakeholders. purchase offsets for its product inventory, this standard Biogenic emissions include CO2, CH4, and N2O that does allow for offsets to be reported separately from the are produced as a result of the combustion and/or inventory results. For offsets to be reported separately in degradation of biogenic materials, wastewater treatment, a product inventory, the company should: and a variety of biological sources in soil and water. For • Purchase offsets based on the GHG Protocol Project example, if paper degrades in a landfill, the CO2 and CH4 Protocol or similar internationally accepted GHG emitted would be classified as biogenic emissions. Non- mitigation project accounting methodologies for biogenic emissions include all GHG emissions from non- quantifying the GHG benefits of climate change biogenic (e.g., fossil-based) materials. Biogenic removals mitigation projects; and are due to the uptake of CO2 by biogenic materials during • Clearly separate corporate-level and product-level photosynthesis, while non-biogenic removals only occur offset purchases to avoid double counting. if CO2 is removed from the atmosphere by a non-biogenic product during its production or use stage. Appendix B If a company purchases offsets to meet their corporate provides guidance on calculating land-use change impacts. reduction goals, double counting can occur if the same [90] Product Life Cycle Accounting and Reporting Standard
- 93. CHAPTeR 11 CalculatingInventory Results offsets were reported in a product inventory. Similarly if a company sells reductions that occur at sources included DuPontTM in the boundary for use as offsets, these should not be DuPontTM Sorona® is an advanced polymer that included in tracking performance towards their own g u i d a n c e contains 37 percent renewably sourced (e.g., biogenic) reduction target. Companies should separately report any ingredients by weight and can be used in place of sold offsets from sources that they own or control that traditional petrochemical polymers in a wide range are part of the product boundary. of applications such as fibers, fabrics, filaments, and In this standard, avoided emissions are quantified as engineering resins. Because of the range of functions emissions reductions that are indirectly caused by market and products Sorona® can be used for, DuPont responses to the studied product or process that occurs performed a cradle-to-gate inventory. However, the in the studied product’s life cycle. For example, consider resulting fate of the carbon in the molecule is an a company that performs a GHG inventory on energy- important evaluation for any cradle-to-grave inventory efficient appliances. Avoided emissions can be calculated that uses Sorona® as a material input. To ensure by assuming that the energy-efficient appliances replace that downstream customers have all the necessary non-efficient appliances in the market place. The company information to perform a cradle-to-grave assessment, also installs an energy-efficient wood-fired boiler in the DuPont included in the inventory report the amount production facility to reduce emissions. Avoided emissions of carbon (fossil and biogenic) contained within the can be calculated by assuming that the use of the wood- product as it leaves the cradle-to-gate inventory fired boiler reduces the demand for coal-fired power. boundary. DuPont also has information on the fate of the contained carbon in different end-of-life scenarios This standard does not allow avoided emissions to be that they included in the inventory report separate subtracted from the total inventory results. However, from the cradle-to-gate inventory results as optional companies may report avoided emissions separately information to help downstream customers define in the inventory report. Avoided emissions are often their end-of-life profiles. calculated using the consequential approach, which among other things considers how emissions might change as a result of a shift in demand (see chapter 5 for more information). Companies calculating and reporting endnotes avoided emissions should also consider any indirect 1 Emissions increases can also be indirectly caused by the studied emissions caused by market responses to the studied product or process that occurs in the studied product’s life cycle product or its life cycle. For example, indirect land-use and should also be reported separately with avoided emissions. change impacts are a form of indirect impact that could increase the GHG inventory of a product and should also be reported separately if other avoided emissions are considered. It is not appropriate to consider only the emissions savings associated with indirect effects. In LCA, the term avoided emissions is sometimes used to describe allocation due to system expansion, or emission reductions due to a reduction project within the product’s boundary. These cases are not considered avoided emissions as defined by this standard and therefore are not required to be reported separately from the inventory results. However, the requirements for allocation (chapter 9) and performance tracking (chapter 14) are applicable in these cases. [91]
- 94.
- 95. g e qd a rn ec m e n t s r u i u i e 12.1 Introduction A ssurance is the level of confidence that the inventory results and report are complete, accurate, consistent, transparent, relevant, and without material misstatements. Obtaining assurance over the product inventory is valuable for reporting companies and other stakeholders when making decisions using the inventory results. Carefully and comprehensively documenting the inventory process in a data management plan is a vital step in preparing for assurance. 12.2 Requirements The product GHG inventory shall be assured party other than the reporting company performs by a first or third party. the assurance, this is known as third party assurance. Table 12.1 explains the differences between first and Three key parties are involved in the assurance process: third party assurance. 1. The reporting company seeking assurance Both first and third party assurers should follow similar procedures and processes. For external stakeholders, 2. Stakeholder users of the inventory report third party assurance is likely to increase the credibility 3. The assurer(s) of the GHG inventory. However, first party assurance can also provide confidence in the reliability of the inventory When the reporting company also performs the report, and can be a worthwhile learning experience for assurance, this is known as first party assurance. When a a company prior to commissioning third party assurance. [93]
- 96. r e qu i r e m e n t s Table [12.1] Types of assurance Type of assurance Description Independence mechanism First party assurance Person(s) from within the reporting Different lines of reporting company but independent of the GHG inventory determination process conducts internal assurance. Third party assurance Person(s) from an organization Different business entity from the independent of the product GHG reporting company inventory determination process conducts third party assurance. Inherently, assurance provided by a third party offers Companies shall choose assurance a higher degree of objectivity and independence. providers that are independent of, and Companies receiving first party assurance are required have no conflict of interest with, the to report how potential conflicts of interests were product GHG inventory process. avoided during the assurance process (see the assurance statement reporting requirement below for more information). Typical threats to independence may Assurers are defined as person(s) providing assurance include financial and other conflicts of interest between over the product inventory and shall be independent the reporting company and the assurer. These threats of any involvement in the determination of the product should be assessed throughout the assurance process. inventory or development of any declaration. Assurers shall have no conflicts of interests, such that they can Companies shall report the assurance exercise objective and impartial judgment. statement in the inventory report. The statement shall include: • Whether the assurance was performed by a first or third party • The level of assurance achieved (limited or reasonable) including assurance opinion or the critical review findings • A summary of the assurance process • The relevant competencies of the assurers • ow any potential conflicts of interest H were avoided for first party assurance [94] Product Life Cycle Accounting and Reporting Standard
- 97. CHAPTeR 12 Assurance r e q u i r e m e n t s Competencies of assurers Selecting a competent assurer (also known as an assurance The critical review process is intended to ensure provider) is important for the assurance findings to have consistency between the product inventory and the the credibility needed to support the reporting company’s principles and requirements of the Product Standard. It business goals and stakeholder needs. is an established practice in life cycle assessment. The critical review process ensures that: A competent GHG inventory assurer has: • Methods used to carry out the product inventory are • Assurance expertise and experience using assurance consistent with the Product Standard frameworks • Methods used to carry out the product inventory are • Knowledge and experience in life cycle assessment scientifically and technically valid and/or GHG corporate accounting, as well as familiarity • Data used are appropriate and reasonable for with key steps in the product inventory process public reporting • Knowledge of the company’s activities and • The inventory report and any conclusions based on the industry sector results are appropriate for GHG-only inventories • Ability to assess the emission sources and the • The inventory report is transparent and consistent magnitude of potential errors, omissions and misrepresentations There are two types of critical review: those performed • Credibility, independence and professional skepticism by an internal or external expert, and those performed by to challenge data and information a review panel of interested parties. Assurance process For critical reviews conducted by a review panel, the Achieving assurance over the product inventory results panel should be comprised of at least three members. can be achieved through two methods: verification and The members may come from life cycle assessment critical review. expert groups, government agencies, non-governmental organizations, industry groups, and other companies. Verification is an independent assessment of the reliability of the product GHG inventory. Verification Levels of assurance engagements, whether performed by a first or third In verification, the level of assurance refers to the party, have common elements, including: degree of confidence that stakeholders can have over the information in the inventory report. There are two 1. Planning and scoping (e.g., determine risks and levels of assurance: limited and reasonable. The level material misstatements) of assurance requested by the reporting company will 2. Identifying emission sources determine the rigor of the verification process and the amount of evidence required. The highest level of 3. Performing the assurance process (e.g., gathering assurance that can be provided is a reasonable level of evidence, performing analytics, etc.) assurance. Absolute assurance is never provided as 100 4. Evaluating results percent of the inputs to the GHG Inventory are not tested due to practicality and feasibility limitations. 5. Determining and reporting conclusions The thoroughness with which the assurance evidence is The nature and extent of verification procedures can vary obtained is less rigorous in limited assurance. Table 12.2 depending on whether the verification engagement is provides examples of limited and reasonable assurance designed to obtain reasonable or limited assurance (as opinions for an assertion of product inventory emissions. described below). Verification of inventory data may take place in several ways, for example by on-site checking, reviewing calculations, mass balance calculations, or cross- checks with other sources. [95]
- 98. r e qu i r e m e n t s Critical review findings The critical review findings include whether the product For more information on critical review, companies should inventory is in conformance with the Product Standard refer to the following texts: and the methodological choices and assumptions made 1. ISO 14040, section 7 are reasonable for public reporting. 2. ISO 14044, section 6 3. The Society of Environmental Toxicology and Chemistry’s (SETAC) Guidelines for Life Cycle Assessment: A ‘Code of Practice’ Table [12.2] Examples of limited and reasonable assurance opinions Assurance opinion Limited assurance Reasonable assurance Nature of opinion Negative opinion Positive opinion Example wording "Based on our review, we are not aware "In our opinion the reporting of opinion of any material modifications that company’s assertion that the should be made to the company’s inventory product’s emissions assertion that the inventory product’s are 23 kilograms CO2e is fairly emissions are 23 kilograms CO2e and stated, in all material respects, are in conformance with the and is in conformance with requirements of the GHG Protocol the GHG Protocol Product Life Product Life Cycle Accounting and Cycle Accounting and Reporting Reporting Standard.” Standard." [96] Product Life Cycle Accounting and Reporting Standard
- 99. CHAPTeR 12 Assurance 12.3 Guidance 12.3.1 Benefits of assurance Qualitative misstatements tend to be those that have Assuring product inventory results can provide a variety immaterial quantitative effects but could materially affect of benefits, including: the reporting company’s emissions in the future as well g u i d a n c e as those that mislead the intended user. • Increased confidence in the reported information on which to base reduction targets and related decisions Uncertainty is a separate concept from materiality • Enhanced internal accounting and reporting practices because it is not a known error, rather an indicator (e.g., data collection, calculation, and internal of how well the data represents the processes in the reporting systems), and facilitation of learning and product inventory. knowledge transfer within the company 12.3.4 Preparing for assurance • Increased confidence in the results by other companies Preparing for assurance is a matter of ensuring that the in the product’s life cycle that may use the results in evidence that the assurer needs is easily accessible. The their own inventories type of evidence and documentation requested by the • Improved efficiency in subsequent inventory update assurer will depend on the subject matter, the industry, processes and when undertaking inventories of other and the type of assurance being sought. Maintaining company products documentation of the inventory process through the use • Greater stakeholder trust in the reported information of a data management plan (see Appendix C) is helpful for 12.3.2 Key concepts in assurance ensuring the assurance evidence is available. In the assurance field many different terms are used to Prior to starting the assurance process, the reporting describe various assurance processes (e.g., verification, company should ensure that the following are prepared validation, quality assurance, quality control, audit, etc.). and available to the assurer: Though not comprehensive, table 12.3 includes many key terms and concepts used in the assurance process. • The company’s written assertion (e.g., inventory results); 12.3.3 Materiality • The completed data management plan; and A material misstatement occurs when individual • Access to sufficient and appropriate evidence (i.e., or aggregate known errors, omissions and invoices, bills of sale, etc.). misrepresentations have a significant impact on the GHG inventory results and could influence a user’s decisions. Timing of verification Materiality has both quantitative and qualitative aspects. Verification is conducted before the public release of The assurer and reporting company should determine the inventory report by the reporting company. This an appropriate threshold or benchmark of materiality allows for material misstatements to be corrected during the assurance process. prior to the release of the opinion (or revised opinion) and assertion. The work should be initiated far enough Quantitative materiality is typically calculated as a in advance of the inventory report release so that it is percentage of the inventory (in total or on an individual useful in improving the inventory when applicable. The line item basis). In determining the quantitative period of the verification process is dependent on the materiality benchmark, assurers should contemplate nature and complexity of the subject matter and the the risk of a potential misstatement and the history of level of assurance. previous misstatements. A materiality threshold (e.g., a point at which a discrepancy becomes material) can be pre-defined by the assurer. [97]
- 100. g u id a n c e Table [12.3] Key assurance concepts Assurance Description examples concept Assertion A statement by the reporting company • The studied product’s emissions on the inventory results. The assertion is are 23 kilograms of CO2e. They are presented to the assurer. calculated in accordance with the Product Standard and supplemented by our company-specific policies and methodologies described in the inventory report Subject matter The inventory results and supporting • Inventory results information included in the inventory • Other information presented in the report. The type of assurance performed inventory report (See chapter 13 for will determine which subject matter(s) more information on reporting) should be assessed. Criteria The benchmarks used to evaluate or • Requirements of the standard measure the subject matter. • Methodological choices • Data quality and uncertainty (assessed for appropriateness for a public report) • Others determined to be suitable by the reporting company and assurer Evidence Data sources and documentation used • Physical observations, such as site to calculate emissions and support the tours to confirm the existence and subject matter of the reporting company’s completeness of the sources assertion. Evidence should be sufficient in • Assurer’s calculations quantity and appropriate in quality. • Statements by independent parties and/or the reporting company, such as an interview with the production manager about production capacity • Documents prepared by an independent party and/or the reporting company, such as invoices Assurance Standards, used by assurers, which set • ISO 14064-3 Specification with standards requirements on how the assurance Guidance for the Validation and process is performed. Verification of Greenhouse Gas Assertions Assurance The results of the assurer’s assessment • See table 12.2 for examples of limited opinion of the reporting company’s assertion (i.e., and reasonable assurance opinions inventory results). If the assurer determines that a conclusion cannot be expressed, the statement should cite the reason. [98] Product Life Cycle Accounting and Reporting Standard
- 101. CHAPTeR 12 Assurance Timingof the critical review process 12.3.6 Assurance statement Critical review may be performed during the inventory The assurance statement conveys the assurer’s process (known as an interactive review) or at the end conclusion about the inventory results, and it may take (a posteriori). An interactive critical review may be useful different forms depending on whether the company is g u i d a n c e in correcting any problems with the inventory before conducting critical review or verification, as well as if the the inventory’s completion, and it can reduce delays assurance was performed by a first or third party. The in publishing the inventory report. A posteriori review required contents of an assurance statement are listed allows the panel members to have a fresh perspective in the requirements section. An assurance statement when reviewing the inventory results. It is important should also include the following: that the critical review expert(s) remains objective and Introduction independent from the inventory development process • A description of the studied product during interactive reviews, and that the critical review • A reference to the reporting company’s assertion findings are based on the final product inventory report. included in the inventory report 12.3.5 Assurance challenges • Description of assurance process There are several challenges in assuring product • List of the assurance criteria inventories. Emissions calculations rely on a mixture of • Description of the reporting company’s and data sources and assumptions. Inventory uncertainty, assurer’s responsibilities especially scenario uncertainty related to use and end- • The assurance standard or type of critical review of-life stage emissions, may affect the quality of the process used to perform the assurance inventory. It is important to consider the state of data • A summary of the work performed collection systems and the integrity of the data and • The materiality threshold or benchmark, if set methodological choices for assurance. Conclusion One of the primary challenges is that the majority of • Any additional details regarding the assurer’s emission sources are usually outside the reporting conclusion, including details regarding any exceptions company’s control and the assurer’s ability to obtain noted or issues encountered in performing the sufficient appropriate evidence. assurance • When there are material departures in the assertion Three approaches to addressing this diminished from the assurance criteria, the reporting company control are: should report the effect of the departures 1. Change the level of assurance i.e., reasonable to limited (for verification) endnotes 2. Change from verification to critical review 1 Adapted from ISO 14064:3:2006, Greenhouse gases - Part 3: Specification with guidance for the validation and verification of 3. Rely on the assurance statement of another assurer greenhouse gas assertions. for emission and removal sources outside of the 2 Adapted from the GHG Protocol Corporate Standard. company’s control (i.e., assurance over a supplier’s 3 Adapted from ISO 14040:2006, Environmental Management –Life emission sources by a different assurance firm) Cycle Assessment –Principles and framework. 4 Adapted from ISO 14044:2006, 6.1 [99]
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- 103. g e qd a rn ec m e n t s r u i u i e 13.1 Introduction R eporting is crucial to ensure accountability and effective engagement with stakeholders. This chapter summarizes the various reporting requirements specified in other chapters and identifies additional reporting considerations that together provide a credible reporting framework and enable users of reported data to make informed decisions. It is essential that the reported information is based on the key accounting principles (relevance, accuracy, completeness, consistency, and transparency). 13.2 Requirements Companies shall publicly report the • Additional GHGs included in the following information to be in conformance inventory; with the GHG Protocol Product Standard: • ny product rules or sector-specific A guidance used; General information and scope • Inventory date and version; • Contact information; • For subsequent inventories, a link • Studied product name and description; to previous inventory reports and • The unit of analysis and reference flow; description of any methodological changes; and • Type of inventory, cradle-to-grave or cradle-to-gate; • A disclaimer stating the limitations of various potential uses of the report including product comparison. [101]
- 104. r e qu i r e m e n t s Boundary setting Uncertainty • ife cycle stage definitions and L • A qualitative statement on inventory descriptions; uncertainty and methodological choices. Methodological choices include: • A process map including attributable processes in the inventory; • Use and end-of-life profile; • non-attributable processes included • Allocation methods, including allocation in the inventory; due to recycling; • excluded attributable processes • Source of global warming potential and justification for their exclusion; (GWP) factors used; • ustification of a cradle-to-gate J • Calculation models. boundary, when applicable; • The time period; and Inventory results • The method use to calculate land-use • The source and date of the GWP change impacts, when applicable. factors used; • Total inventory results in units of CO2e Allocation per unit of analysis, which includes all emissions and removals included in • isclosure and justification of the D the boundary from biogenic sources, methods used to avoid or perform non-biogenic sources, and land-use allocation due to co-products or change impacts; recycling; and • Percentage of total inventory results by • When using the closed loop life cycle stage; approximation method, any displaced emissions and removals separately • iogenic and non-biogenic emissions and B from the end-of-life stage. removals separately when applicable; • Land use impacts separately when Data collection and quality applicable; • or significant processes, a descriptive F • Cradle-to-gate and gate-to-gate statement on the data sources, data inventory results separately (or a clear quality, and any efforts taken to improve statement that confidentiality is a data quality. limitation to providing this information); • The amount of carbon contained in the product or its components that is not released to the atmosphere during waste treatment, when applicable; and • For cradle-to-gate inventories, the amount of carbon contained in the intermediate product. [102] Product Life Cycle Accounting and Reporting Standard
- 105. CHAPTeR 13 Reporting r e q u i r e m e n t s Assurance Setting reduction targets and tracking inventory changes The assurance statement including: Companies that report a reduction target • Whether the assurance was performed and/or track performance over time shall by a first or third party; report the following: • Level of assurance achieved (limited or • The base inventory and current inventory reasonable) and assurance opinion or the results in the updated inventory report; critical review findings; • The reduction target, if established; • A summary of the assurance process; • Changes made to the inventory, if the • The relevant competencies of the base inventory was recalculated; assurance providers; and • The threshold used to determine when • An explanation of how any potential recalculation is needed; conflicts of interest were avoided for first party assurance. • Appropriate context identifying and describing significant changes that trigger base inventory recalculation; • The change in inventory results as a percentage change over time between the two inventories on the unit of analysis basis; and • An explanation of the steps taken to reduce emissions based on the inventory results. [103]
- 106. g u id a n c e 13.3 Guidance 13.3.1 Goal of public reporting included, and a reporting template is provided at The overarching goal of producing a GHG inventory in (www.ghgprotocol.org) to help companies organize conformance with the GHG Protocol Product Standard is to their inventory report. create positive drivers to pursue GHG emission reductions 13.3.2 Identifying the audience across the product life cycle. The full process from Keeping the audience in mind is important right from developing the inventory to reporting results is designed to the start as companies set objectives and develop an help improve the understanding of reduction opportunities inventory. A key opportunity to make a meaningful as well as facilitate and leverage inputs from stakeholders connection with the audience is when a company to prioritize and reduce emissions. Identifying target prepares their inventory report. Helping users understand audience and specific business goals is the first step and the purpose, context, and rationale behind various reporting is the final step to achieving this goal. accounting decisions as well as the limitations and The following sections provide guidance on potential uses of the inventory results are examples of understanding the audience and completing some of objectives that a company should seek to address in the the reporting requirements not included elsewhere in inventory report. the standard1. A list of optional reporting elements is Table [13.1] Potential audiences of a publicly disclosed product GHG inventory report Audience category/role Audience description General public Lay person. No understanding or prior experience with LCA/GHG inventories may be assumed. GHG inventory / LCA practitioner Practitioner wishing to use the inventory results as data inputs to another study. Assurance provider Assurer performing assurance on the inventory. Report partners Employees, suppliers, product-owning organization, report- commissioning organization. Sustainability / environmental General interested party seeking to understand more about a specific practitioner product, a product sector, an industry sector, or other aspects of life cycle emissions and removals. Green purchasing Purchasing decision-maker seeking differentiation across products. Downstream customers Retail decision-maker making purchase decisions that may use the inventory results. Environmental/carbon/ GHG programs that may provide a platform to report, register, and GHG labeling organizations disseminate inventory results. Policy makers and government Government stakeholders that may use the inventory results to plan program administrators future programs and policies. [104] Product Life Cycle Accounting and Reporting Standard
- 107. CHAPTeR 13 Reporting Box [13.1] Example disclaimer It is important to recognize that public disclosure does not mean there is one homogenous audience with a The results presented in this report are unique to the uniform set of requirements. Table 13.1 lists distinct g u i d a n c e assumptions and practices of company X. The results audiences for a product GHG inventory report, and are not meant as a platform for comparability to other identifies how the reporting requirements can help companies and/or products. Even for similar products, address their needs. This is not an inclusive list as other differences in unit of analysis, use and end-of-life stage audiences not identified here may still find value in profiles, and data quality may produce incomparable reports produced following the reporting requirements results. The reader may refer to the GHG Protocol in the Product Standard. Product Life Cycle Accounting and Reporting Standard 13.3.3 Disclaimer (www.ghgprotocol.org) for a glossary and additional Providing a disclaimer ensures that readers understand the insight into the GHG inventory process. scope and intended purpose of the inventory results and are aware of any limitations. (See box 13.1 for an example.) 13.3.4 Use of results The audience of the public report may be most interested in what the company is doing, or plans to do, to reduce the GHG emissions associated with the product as a result of the inventory. Additionally, the [105]
- 108. g u id a n c e audience may be interested in what they can do, as a • A summary of reductions or increases based on a user or consumer of the product, to reduce their impact previous inventory, highlighting the most effective on the inventory. Therefore, a company should inform initiatives or the reasons why emissions have increased. its stakeholders of the steps it plans to implement as Increases in emissions over the reduction-reporting period well as measures its customers or users can implement, should be reported with a clear indication that the figure in order to reduce emissions based on the inventory represents an increase rather than a reduction. A minus results. If this is a subsequent report, a company should sign should not be used as this may confuse the audience. also provide an overview of any reductions achieved. This should be brief and highlight key initiatives or A key step in completing the report is to review the results. Examples include: purposes and context of the study and summarize the overall conclusions that can be drawn from the inventory. • A plan to focus reductions around a few key emission This step involves evaluating key accounting choices sources; exercised in developing the inventory and providing a • Information on how users/consumers can reduce key perspective on the significance and limitations in the emission sources ( e.g., reuse, following manufacturer product life cycle study. Companies should also clarify use instructions, purchasing green power, etc.); and/or the purposes that the study sought to fulfill and the decisions that were outside its purview. [106] Product Life Cycle Accounting and Reporting Standard
- 109. CHAPTeR 13 Reporting 13.3.5Optional reporting In addition to required elements, a company should • Weighting factors for delayed emissions consider reporting on elements that meet the needs • Information on offsets that have been purchased of its potential audience, its specific business goals, or or developed outside the inventory boundary and g u i d a n c e the requirements of product rules and sector guideline reported separately from the inventory results. This developed in conformance with the Product Standard. information should: These elements may be added to the public report or • Disaggregate offsets by emissions reductions and/ made available upon request and may include: or removals • Specify the types of offset project/s • Business goals met by performing a GHG inventory • Specify geographical and organizational origin • Additional background information on inventory • Specify how offsets have been quantified results and how they are calculated • Specify how double counting of offsets has • Additional disclaimers around proper use of results been avoided SKU, NAICS code, UNSPSC code or other unique • Specify whether they have been certified product/service identifier or recognized by an external GHG program • Additional details around why a particular unit of (e.g., the Clean Development Mechanism) and analysis was chosen • Specify whether and to what extent purchased • The country(ies) where the raw material acquisition, offsets were used to meet reduction targets production, and distribution stages occur (if established) • Information on data collected from suppliers, • Information on any reductions sold as offsets from including: sources within the inventory boundary that are owned • Percent engagement from supplier surveys or controlled by the reporting company • Data collection techniques and sources • Avoided emissions and/or emissions caused by sources • Quantitative uncertainty assessments outside the inventory boundary reported separately • Data for other GHGs that may be relevant to the from the inventory results studied product • Other emissions or removals calculated by • Inventory results using a 20 or 500 year GWP factor consequential modeling reported separately from or other impact assessment metrics such as global the inventory results temperate potential (GTP) • Additional guidance on how the results should be • If the functional unit and subsequent inventory interpreted and used results are applicable to multiple product varieties • Detailed reduction plans for future inventories (e.g., different flavors or colors), information on those • A summary and explanation of any increase in varieties emissions or decrease in removals since the last • Indirect land-use change impacts reported separately inventory, including what plans the company has to from the inventory results achieve inventory reductions in the future • Additional disaggregation of GHG impacts. Examples include: • CO2e emissions reported as a fraction of all GHG endnote components (i.e., grams of CO2, N2O, CH4, etc.) 1 More information on reporting outputs from a specific inventory • For specific attributable processes or material, step are included in their respective chapters. energy and service inputs, such as product packaging • The sum of transportation occurring throughout the life cycle [107]
- 110. 14 Setting Reduction Targets and Tracking Inventory Changes
- 111. g e qd a rn ec m e n t s r u i u i e 14.1 Introduction T his standard is designed to help improve the quality and consistency of product inventories and public reporting with the ultimate goal of helping companies and other stakeholders reduce emissions of the products they design, manufacture, sell, purchase, and use. This step in the inventory process allows companies to set and meet reduction targets by consistently and accurately tracking inventory changes and identifying reduction opportunities. 14.2 Requirements To set reduction targets and track inventory changes over time, companies shall: • Develop and report a base inventory that • Complete and disclose an updated conforms with the requirements of this inventory report including the updated standard; results, the base inventory results, and the context for significant changes; and • Recalculate the base inventory when significant changes in the inventory • Use a consistent unit of analysis to enable methodology occur and report those comparison and track performance over time. changes; Companies can publicly report a GHG inventory in conformance with the Product Standard without setting a reduction target and tracking inventory changes. However, companies that do set reduction targets and track inventory changes shall abide by these requirements. [109]
- 112. g u id a n c e 14.3 Guidance 14.3.1 Steps for setting reduction targets and 6. Complete and disclose an updated inventory report tracking changes including the updated results and the base inventory Setting reduction targets and tracking changes involves results. Companies should report the inventory results the following steps: as a percentage change over time on the unit of analysis basis. 1. Complete and report a base inventory done in conformance with the requirements of this standard. The following section describes each step in more detail. 2. Identify reduction opportunities. Step 1: Complete and report a base inventory The first step is to ensure that a base inventory has been 3. Set a reduction target. completed and publically reported in conformance with 4. Achieve reductions and account for these by this standard. The base inventory does not have to be performing an updated inventory. the first inventory a company performs on a product; for example, companies may want to improve data quality 5. Recalculate the base inventory as needed when before finalizing the base inventory. Once a company has significant changes in the inventory occur, including, identified the base inventory, however, any changes made but not limited to: changes in the product’s boundary; that warrant a recalculation should be done following the quality of data; and allocation or recycling methods. guidance in step 5. [110] Product Life Cycle Accounting and Reporting Standard
- 113. CHAPTeR 14 SettingReduction Targets and Tracking Inventory Changes Step 2: Identify reduction opportunities Companies can begin identifying potential emissions comparing inventories over time. This means that if an reduction opportunities along the product’s life cycle improvement made along the product’s life cycle changes while creating the base inventory. These opportunities its unit of analysis, then a new inventory is completed and g u i d a n c e can then be assessed based on the magnitude of the the company needs to redefine the base inventory and reductions and the company’s level of influence. In reduction goal based on the new unit of analysis. general, companies have the largest influence on Step 4: Achieve and account for reductions processes they control and therefore, a first step may be Companies may achieve reductions in different ways, such to identify energy savings or fuel switching opportunities as working within the company to improve the processing within those processes. or design of the product or engaging with customers In many cases the largest potential for improvement and suppliers. For the latter, the first step is to set up a comes from processes that are under the control of strategy for supplier and customer engagement (See suppliers and customers along the product’s life cycle. www.ghgprotocol.org for further guidance). Companies To address these emissions, companies should identify should work with partners along the product’s life cycle suppliers and customers to engage with, based on both to identify emissions reduction opportunities. This may their level of influence and reduction potential. For use include working with a supplier to help them manage and end-of-life processes, the company may determine and reduce their corporate (scope 1, 2, and 3) emissions. that improvements are influenced primarily by the design Other opportunities can include working with suppliers of a product and less by the behaviors of customers. In to come up with substitute materials that are less GHG this case, companies should engage their product design intensive during production and/or reduce GHG impacts or research and development team. further upstream (e.g., a lighter car panel that reduces fuel use in the product use stage). Step 3: Set a reduction target A robust business strategy often includes setting To account for reductions in emissions, companies targets for revenues, sales, and other core business are referred to the data collection requirements of indicators, as well as tracking performance against this standard (chapter 8). Any reductions should be those targets. Likewise, although performance tracking assessed using collected direct measurement data, a GHG product inventory over time can be done without activity data, or emission factors that abide by the a reduction target, effective GHG management involves attributional approach of the standard (i.e., historical, setting a GHG target. fact-based, and measurable) and have occurred prior to the updated inventory. Companies should set a reduction target for the total product’s life cycle to avoid the perception of cherry- picking. In addition companies may also set individual Box [14.1] Trade-offs between environmental impacts targets for stages or processes. A target should include both a completion date and a target level - the numeric One limitation of a GHG product inventory is that it value of the reduction target per unit of analysis (e.g., focuses on a single environmental impact. Before 20 percent reduction). In general, companies should set making a decision to reduce GHG emissions by an ambitious target that reaches significantly beyond making changes in the product life cycle, companies business-as-usual. “Stretch goals” tend to drive greater should consider whether any environmental trade- innovation and are seen as most credible by stakeholders. offs could occur as a result of that change - for It is important to note that all reduction targets set for example, switching from a GHG intensive processing a product inventory are made on the basis of the unit step to one that uses more water resources. of analysis, and the unit of analysis cannot change when [111]
- 114. g u id a n c e Step 5: Recalculate the base inventory Step 6: Update the inventory report Overtime, changes and improvements may occur Once reductions have occurred, new data has been to activity data, emission factors1, data quality, and collected, and the base inventory has been recalculated methodologies. When such parameter or methodological (if needed), the inventory report should be updated to changes influence the results of the base inventory, include results from both the new and base inventories. the base inventory should be recalculated to ensure The updated inventory report must meet the requirements comparability of emissions information over time. These of the reporting chapter and include the same reporting changes may include redefining attributable processes, elements as the base inventory. The introduction should collecting higher quality data, or changing allocation or be updated to reflect the purpose of the update including recycling methodologies. As required above, any changes the reduction target, and any information that has changed made that warrant recalculation of the base inventory are since the base inventory should be clearly noted. The reported in the updated inventory report. number of updated inventory reports for the studied product should be reported, with a link to previous reports Before recalculating a base year inventory, companies as available. If the base inventory is recalculated, all changes should develop a recalculation policy to clearly articulate are listed. If the base inventory was not recalculated, the basis and context for any recalculation. Companies are companies are required to report the threshold under required as part of reporting (see chapter 13) to disclose which no recalculation was warranted. In either case, both the threshold for insignificance above which a change the base inventory results and the updated results are warrants recalculation. For example, if a new emission included in the updated inventory. factor is published that when used has a one percent impact on the inventory results, a company may decide In addition to the base inventory reporting requirements, that is below the threshold and opt not to recalculate companies should report a reduction percentage by the base inventory. If a threshold for insignificance was taking the difference between the base inventory and the already established for justified exclusions (see chapter 7) new inventory divided by the base inventory. then the same threshold should be used here. In the case that GHG emissions have actually increased If a change is made that causes the unit of analysis to be since the last inventory, companies should report these redefined, the base inventory cannot be recalculated. In results, adding an explanation for their stakeholders as to this case, companies need to create a new base inventory why the emissions increased and what plans the company and set a new reduction target. has to reduce this value in the future. [112] Product Life Cycle Accounting and Reporting Standard
- 115. CHAPTeR 14 SettingReduction Targets and Tracking Inventory Changes 14.3.2 Using offsets to achieve reduction targets It is important to ensure the offsets used to meet a Companies should strive to achieve their reduction reduction target are based on credible accounting targets entirely from emission sources within the standards. In addition, companies should ensure steps to inventory boundary. If the company is unable to meet avoid double counting of reductions by multiple entities g u i d a n c e the target through those reductions, it can use offsets or in multiple targets. For example, if a company sells that are generated from sources external to its inventory offsets that occur at sources included in its inventory boundary. Any purchased, sold, or banked offsets relevant boundary, these reductions should not be included in to the inventory results are subject to the same reporting tracking performance towards a reduction target that is requirements as defined in chapter 13 and therefore are applicable to the same sources. reported separately from the inventory results. For additional guidance on using offsets that are based Although the inventory results are presented on a unit of on credible accounting methodologies and standards analysis basis, companies that purchase offsets for their see GHG Protocol Guideline for Project Accounting and products should do so for all products sold in a particular to avoid double counting in achieving targets see the time frame (e.g., a year). For example, a company Corporate Standard (chapter 11, pp 81-83). produces a million products a year at 50 kg CO2e per unit of analysis. To meet a zero-carbon reduction target for this product, the company needs to purchase 50,000 endnote tons of offsets each year. In this case, the company would 1 If a change in emission factor represents an actual change in report the inventory results per unit of analysis and the emissions, then the base inventory does not need to be updated. total amount of products that are offset over the selected However, if an emission factor is updated to be more complete or have less uncertainty, this may warrant a base inventory recalculation. time frame. Companies should also disclose information on the credibility of the offset, including: • The type of project • Geographical and organizational origin • How offsets have been quantified • How double counting of offsets has been avoided • Whether the offsets have been certified or recognized by external programs [113]
- 116.
- 117. Appendix A. Guidanceon Product Comparison T he quantification of GHG emissions and removals across a product’s life cycle is complex and the results are highly dependent on methodological choices and assumptions. Valid product comparison requires the use of equivalent methodologies that minimize the methodological variability. In order to compare products on a fair and valid basis, companies need to supplement use of the Product Standard. As stated in chapter 1, this standard is intended to support comparison, and table A.2 illustrates the applicability of performance tracking of one product over time. For this standard for each comparison type. other types of product comparison – including consumer For companies and stakeholders that choose to and business purchasing decisions, product labels, and perform product comparison, the following additional performance claims – additional specifications are needed. specifications are recommended. Claims regarding the overall environmental superiority or equivalence of one product versus a competing product, Performance tracking: referred to in ISO 14044 as comparative assertions, are • The unit of analysis should be identical not supported by the Product Standard. Table A.1 provides • If the parameters and methodologies change, the descriptions and examples of types of product previous inventory shall be adjusted to permit comparison on the same basis Table [A.1] Types of comparisons that can be made using a product GHG inventory Comparison type Description example Performance tracking Comparing the performance of the same Product X emits 8 lbs. of CO2e per unit product over time. of analysis in 2010 compared with a 2005 base inventory of 10 lbs. CO2e per unit of analysis, demonstrating a 20-percent improvement. Consumer and business A consumer or business changes A retailer increases milk purchases from purchasing decisions purchasing habits based on the GHG the milk producer with the lowest GHG performance of one product compared product inventory. with a competing product. Product labels A label printed on a product making a A label on a bag of popcorn states the claim (either quantitative or qualitative) product GHG emissions are 7 grams. about the life cycle performance of the product. Performance claims Advertising the GHG benefits of a A consumer group advertises on product by the company performing their website a list of products they the inventory or a third party. claim emit less GHG emissions than competing products. [115]
- 118. Table [A.2] Theuse of Product Standard for product comparisons Supported by the Product Supported by the Product Standard with additional GHG Standard “as-is” program specifications or product specific guidance Performance tracking Consumer and business purchasing decisions Product labels Performance claims See chapter 14 for more information on performance A.1 Role of product rules tracking and setting reduction targets. Product rules provide additional specifications that enable valid comparisons of two or more products. Product rules Consumer and business purchasing decisions, quantitative may vary in quality. When developing a new product product labeling, and performance claims: rule or evaluating the quality of an existing product rule • The unit of analysis should be identical before use, criteria to consider include whether: • The system boundaries and temporal boundary should be equivalent • The rule is developed by a diverse group of • The same allocation methods should be used for stakeholders with relevant subject matter expertise similar processes • The rule is peer-reviewed by qualified experts • The data types used and the data quality and • There are safeguards in place to prevent conflict uncertainty of data should be reported and assessed to of interest determine if a fair comparison can be made • The rules apply internationally so they can be adopted • The temporal and geographical representativeness of by other programs and policies the inventories should be assessed to determine if a • A policy is in place to determine when product rules fair comparison can be made are updated • Third party assurance should be performed ISO labels and declarations: endnotes • Environmental Labels (Type I) , Self-declared 1 1 International Organization for Standardization, ISO 14024:1999, Environmental Claims (Type II)2, Environmental Product Environmental labels and declarations -- Type I environmental Declarations (Type III)3, and comparative assertions4 labeling -- Principles and procedures. Geneva. 2 International Organization for Standardization, ISO 14021:1999, should meet the accounting and communication Environmental labels and declarations -- Self-declared requirements of the respective standards environmental claims (Type II environmental labeling). Geneva. 3 International Organization for Standardization, ISO 14025:2006, Environmental labels and declarations -- Type III environmental declarations -- Principles and procedures. Geneva. 4 International Organization for Standardization, ISO 14044:2006, Life Cycle Assessment: Requirements and Guidelines. [116] Product Life Cycle Accounting and Reporting Standard
- 119. Appendices Appendix B. Land-Use ChangeImpacts T his appendix provides guidance on identifying when land-use change impacts are attributable to the studied product. If they are attributable, guidance is also included for calculating and allocating those impacts.1 For studied products whose life cycle includes biogenic Box [B.1] Key concepts in land-use impacts materials (materials produced by living organisms or biological processes, not fossilized or from fossil Carbon stock refers to the total amount of carbon sources), attributable processes associated with those stored on a plot of land at any given time in one or materials include emissions and removals associated more of the following carbon pools: biomass (above with agricultural and forestry practices such as growth, and below ground), dead organic matter (dead wood fertilizer application, cultivation, and harvesting. In and litter), and soil organic matter.4 A change in carbon addition to these agricultural and forestry practices, stock can refer to additional carbon storage within land-use change impacts may be attributable to a studied a pool, the removal of CO2 from the atmosphere product’s material acquisition and preprocessing stage. to the carbon stock, or the emission of CO2 to the Land-use change impacts2 include the following: atmosphere from the carbon stock. • Biogenic CO2 emissions and removals due to carbon Land-use change occurs when the demand for a stock change occurring as a results of land conversion specific land use results in a change in carbon stocks within or between land-use categories on that land. A change in carbon stock can occur from • Biogenic and non-biogenic CO2, N2O, and CH4 one land-use category to another (e.g., converting emissions resulting from the preparation of converted forest to cropland) or within a land-use category (e.g., land, such as biomass burning or liming3 converting a natural forest to a managed forest or converting agricultural land from till to no-till). Land- This appendix provides guidance for two situations: when use change does not include changes in crop cover or the specific land that the product or product component crop rotations that occur within the cropland category originates from is known, and when it is not. The or forest harvesting and regeneration into the same concepts of assessment period, amortization period, and general forest type, for which the regenerated forest distribution of impacts are used across both situations. is expected to have comparable carbon stocks to the It is important to note that while this appendix focuses harvested forest. Land-use categories include forest on agricultural and forest products, significant land-use land, cropland, grassland, wetlands, settlements, and change impacts are not limited to biogenic products. other lands such as bare soil, rock, ice, etc.5 Any company with a studied product that uses a large Land-use change impacts are the emissions and amount of land, such as a new settlement, should removals due to land-use change. use this guidance to determine whether the land use changed within the assessment period and whether that had any impact on the area’s carbon stocks. As referenced in chapter 7, companies are required to disclose the method used to calculate land-use change impacts in the inventory report. [117]
- 120. B.1 When the specific land is known B.1.1 Determining attributable land-use impacts B.1.2 Calculating land-use change impacts Land-use impacts are attributable to a product if the When information about the specific land is available, following are true: collecting data for land-use change impacts follows the same data collection and quality requirements • The carbon stock change is the direct result of given in chapter 8 of this standard. For example, if the extraction or production of biogenic material to create reporting company owns the land from which a product is a product harvested, primary data are required. Primary data from a • The carbon stock change was caused by human supplier is preferred for land not owned by the reporting intervention with the intent of creating a product company. These types of data are collected directly from • The carbon stock change occurred within the the production site, with actual areas and the mass or assessment period – 20 years or a single harvest period volume of inputs used. from the extraction (e.g., harvesting) of a biogenic product or product component, whichever timeframe Even with primary data from the production site, it is is longer unlikely that primary data is available for the measurement of carbon stock changes and emissions from soils. In some exAMPLeS cases secondary data is available in peer-reviewed journals; 1. A product is made from an annual crop that was otherwise, common sources include: harvested in 2010. The crop is from a plot of land where the last known carbon stock change occurred 50 • Sector-specific activity data/emission factors: These years ago. In this case no land-use change impacts are data are usually provided by associations, cooperatives, attributable to the product. and institutes representing a particular sector. It can include aggregate activity data/emissions from site- 2. A product is made from wood that is extracted from a specific sources. naturally grown forest (extraction and production occur • Country-specific activity data/emission factors: in the same year). If the extraction of above-ground Information that reflects country-specific biomes, biomass causes a change in carbon stock of the land, agricultural practices, climate conditions, soil types, the impacts of the land-use change are attributable to vegetation groups, etc. This can be further broken the product.6 down into regional data. This type of information can 3. A product is made from wood that is grown on a be found in national greenhouse gas inventories and plantation. The wood takes 28 years to grow, and is other official government publications, as well as from harvested in 2010 from a plot of land that was converted country experts. from a natural growth forest in 1982. Because the • Generic activity data/emission factors: These are length of the harvest cycle is longer than 20 years, the default values provided by the IPCC8, FAOSTAT9, etc. company must consider any carbon stock changes that These data refer to broad categories, such as high may have occurred up to 28 years ago (from 2010 to activity clay soils and tropical rainforest, and usually 1982). Therefore, the impacts of the land-use change (i.e., include carbon stock change impacts as well as land- the original clearing of the natural growth forest) are use change practice emissions within the default attributable to the product. emission factor. 4. A product is made from a bi-annual crop that was Figure B.1 is a simplified illustration to show how carbon harvested in 2010. The plot of land used to grow the crop stock information can be used to calculate land-use was converted from forest in 2000 due to a naturally change impacts. In this example, forest land is converted occurring fire.7 Because the carbon stock change was into cropland, creating a 150-ton release of carbon due not caused by human intervention with the intent of to the change in carbon stock. If several carbon stock creating a product, the land-use change impacts are not changes occur within the assessment period, then the attributable to the product. overall impact of all changes must be considered. If [118] Product Life Cycle Accounting and Reporting Standard
- 121. Appendix B. Land-Use Change Impacts Figure[B.1] Simplified illustration of a carbon stock change calculation 200 tons C 50stock tons C total carbon stock change 150 forest stock crop 20 years (or length of harvest) tons C wood is harvested from a forest that is not converted companies to delay inventory reporting in an effort to (forest remaining forest), a carbon stock change can reduce land-use change impacts. It is recognized that be calculated based on the change in forest density. applying any time period to amortize emissions creates To complete the land-use change impact calculation, an arbitrary cut off after which companies are free to companies need to consider what emissions may have grow products on the land without a land-use change occurred as a result of the carbon stock or land-use burden. However, identifying no time period would create change unless these are already included in the default additional uncertainties and inconsistent inventories. emission factors. There are several ways a company may distribute land-use B.1.3 Distribution of land-use change impacts change impacts using the amortization period depending Once land-use change impacts are deemed attributable on the harvested product: and impacts are identified, a company needs to distribute 1. For an annually harvested crop, a company applies those impacts between the studied product and other 1/20th of the impacts to the products produced from co-products that are outputs of the land. This is because, each yearly harvest in most cases, land-use change occurs on land that produces products over many years, and therefore it is 2. For a semi-annual crop or herbaceous plant, a company not appropriate to apply all the land-use change impacts may estimate the production of the land over 20 years to the first products generated within the area. Using the and then apply the impacts to each ton of harvested example from figure B.1 above, a company has calculated biomass a carbon stock change associated with the product (in this 3. For biomass with an extended harvest period (greater example, a crop) of 150 tons. The next question is how than 20 years) or where additional cultivation of the to distribute those emissions to the products that are land is not planned, all of the land-use change impacts harvested from that land. Figure B.2 illustrates three ways are applied to the harvested products from the first land-use change impacts can be distributed over time: harvest period A) single year, B) 20 year constant, or C) 20 year decline. Methods 1 and 2 can be used for both annual and semi- In this standard, land-use change impacts are distributed annual crops depending on the preference of using option B: evenly over an amortization period of the company. either 20 years or the length of one harvest (whichever is longer). This option was chosen as the most consistent B.1.4 Forestry and wood products way to distribute impacts for use in a GHG inventory, Some forest products are grown on managed forest as both option A and option C create an incentive for plantations that are harvested over relatively short time [119]
- 122. Figure [B.2] DistributingGHG impacts over a 20 year time period single year 20 year constant 20 year decline 100 100 100 Option A Option B Option C GHG Distribution (%) C allocation (%) 0.0 0.0 0.0 time time time Source: Zaks, D.P.M., C. C. Barford, N. Ramankutty and J. A. Foley, “Producer and consumer responsibility for greenhouse gas emissions from agricultural production –a perspective from the Brazilian Amazon.”Environmental Research Letters. 4 (2009). frames, while others may be extracted from natural period. Consider an example in which a stock change of forests that take over 100 years to grow. Some forests 150 tons of carbon is calculated with an initial harvest of are removed with the intent of producing annual crops, 100 tons of wood and an annual harvest of 1 ton of crop for while others are removed for the stock of wood that the remaining 19 years of the amortization period. This means can be extracted at the time of removal. Depending that 150 tons of carbon are distributed among 119 tons on the type of product or wood being studied and the of products. The additional impacts of land-use change (e.g., location where that wood is cultivated, vastly different liming applications) may also need to be distributed. This harvesting techniques occur which have a significant scenario is only applicable when the converted land is managed effect on the amount and distribution of land-use change and the production of that land is known. In this context, impacts. Furthermore, co-product allocation (as defined managed refers to land that is continuously maintained for the in chapter 9) may be needed during land-use change if purpose of cultivating and harvesting a product. Distribution the converted land also produces biogenic co-products. is not applicable for forest land that has been harvested and If the studied product is a crop but the land-use change replanted but is not maintained, or for a plot that is replanted event created a co-product of wood, a company needs and managed but with an extensive harvest period (greater to accurately allocate these emissions. The following than 50 years). In both cases the uncertainty associated with scenarios provide some insight into the correct the eventual production of the replanted product makes it distribution and allocation10 of land-use impacts due to most accurate to apply all land-use change impacts to the first forest and wood products. harvest of wood. Scenario A: A forest is harvested for wood Scenario C: A forest is converted to another land category but the land is not converted into another category and the wood is not harvested into a co-product. or the future use of the land is unknown. In this scenario, a company may not allocate any land-use In this scenario, any stock change that is calculated based on change impacts to the wood as it was not used to create the density change of the forest is attributable to the products a co-product. All land-use change impacts (including the created from the harvested wood. No distribution is needed burning of the wood not recovered) must be distributed to because additional growth is not planned, or is unknown. the product produced on the converted land. If a company Scenario B: A forest is harvested for wood then does not have data that justifies the use of scenario B (i.e., converted into another managed land category. proof that the wood was harvested and used for a product) In this scenario, land-use change impacts should be distributed then scenario C is used. to all products produced by the land within the amortization [120] Product Life Cycle Accounting and Reporting Standard
- 123. Appendix B. Land-Use Change Impacts B.2 W hen the specific land use is unknown When a company has limited information on the specific to their product. While these methods may be the most land from which the product or product components accurate, they are often complex, time consuming, and are extracted or harvested, it can be difficult to not freely available. Additionally, they may not provide an determine how to attribute or distribute impacts. accurate representation for some countries. If a company This situation occurs when a company buys crops or has access to these tools they are encouraged to use biomass from a supplier who receives indistinguishable them to determine land-use change impacts as long as shipments from a wide range of land-based sources. the modeled results are justified and transparent. Under such circumstances, primary data are not When a company does not have access to models or available and secondary data are used to calculate stock imaging data, it may use average statistics to estimate changes and determine how much land-use change land-use change impacts. For example, companies may impacts should be distributed to a product. use the agricultural or forestry statistic for the assumed The first step in estimating land-use changes impacts location to determine the change in land occupation is to determine in what location the crops or biomass for the studied product versus the total land change were likely grown. If the crop or biomass is grown only in that location. The following example shows the in certain locations due to climates and soil types, those steps companies can follow to use agricultural data locations should be used. If the crop or biomass is grown to determine whether land-use change has occurred. in many locations, a company may choose the largest The same technique may be used for managed wood producing location or the most likely location (e.g., due products using forestry data. If the crop or biomass that to proximity to the production facility). Companies are is being studied is shown to occupy less land over the encouraged to perform scenario uncertainty if more than 20-year assessment period, the company can assume that one location is plausible. Companies may also take an no land-use change has taken place. If the amount of average of locations if data are available to support that land occupied by the crop or biomass being studied has calculation (e.g., all locations have carbon stock change increased, then land-use change impacts are attributable. data available). Once the location has been determined, In this case the company needs to assume what the companies may use the following data to estimate the original land category was. This should be based on the carbon stock and land-use change impacts: type of land present in the assumed location and when more than one land type is possible the conservative • Land-use imaging and/or agricultural demand- choice should be made. based models • Average data, including: It is important to note that any assumptions made • International statistics about land-use change impacts are only estimations • Country- or region-specific statistical databases and subject to much uncertainty. Because these • Statistical yearbooks estimation techniques cannot identify when the land- use change occurs, companies should always assume Land-use imaging and/or agricultural demand-based 1/20th of the land-use change impact, as shown in models include using remote sensing11 or GIS data to the following examples. Companies may also choose estimate land-use change in a particular location or not to make any assumptions about land-use change market-based models12 to estimate land-use change and only use the worst case scenario (e.g., all land is based on the market trends of a crop or wood product. converted from the most carbon rich land category). For example, if the studied product is a crop assumed to Information on the methods used to determine be produced in New Zealand, and satellite imagery shows land-use change impacts should be included in the that land use for that crop has remained constant in New inventory report for transparency. Zealand for the past 20 years, then the company can assume that no land-use change impacts are attributable [121]
- 124. Box [B.2] Estimatingland-use change impacts without specific data In this example, the following steps were taken to these statistics, where the crops not shown (because they determine whether land-use change impacts are are less than 1 percent individually) contribute 4 percent attributable to palm oil and rice, and, if so, to produce to the total acreage. the land-use impact estimate. The Food and Agriculture 2. Collect historical land-use data Organization’s (FAO) statistical database is used to make for the studied product. the estimations, and both products are assumed to come The second step is to collect historical land-use data for from Malaysia. (See FAO website for more information: the studied products to determine whether their land http://faostat.fao.org/site/567/default.aspx#ancor.) use has increased or decreased over the assessment 1. Determine the most-planted crops period (20 years in this example). Because statistical in the assumed location land-use data are often published a few years behind The first step is to determine the country profile for schedule (e.g., 2008 data published in 2010), companies the most-planted crops. Because many agricultural can use the data as long as the unknown period does not products are harvested in Malaysia, only crops that on exceed three years. If the unknown period does exceed their own contribute more than 1 percent of the countries’ three years, companies should either supplement the harvested area are considered. If the studied crop is not data with more recent statistics or consider another within the top 1 percent of area harvested in the location, method to estimate land-use change impacts. this is an indication that the assumed location is not In figure B.3, the total change in the area harvested appropriate. Companies should assume a location where for rice paddy over the 20-year period remains fairly a large amount, if not the largest amount, of the studied steady (e.g., does not exceed a 1-percent increase). It product is harvested from each year. Table B.1 shows can be assumed that land-use change did not occur in Table [B.1] Area harvested for crops grown in Malaysia in 2008 that contribute more than 1 percent individually to total harvested hectares (ha). Crop Area harvested 2008 [ha] Percent total area harvested Cassava 41000 1% Coconuts 174000 3% Coffee, green 50000 1% Natural rubber 1247000 19% Oil palm fruit 3900000 60% Oilseeds 150000 2% Rice, paddy 667656 10% Total 6478175 100% Source: FAO, FAOSTAT. Available from http://faostat.fao.org/site/567/DesktopDefault.aspx?PageID=567#ancor, 2011. [122] Product Life Cycle Accounting and Reporting Standard
- 125. Appendix B. Land-Use Change Impacts Box[B.2] Estimating land-use change impacts without specific data (continued) Figure [B.3] Area harvested (1000 ha) for rice Figure [B.4] Area harvested (1000 ha) for oil palm paddy production in Malaysia for the fruit production in Malaysia for the period from 1988-2008 period from 1988-2008 710 4500 700 area harvested (1000 ha) area harvested (1000 ha) 4000 690 3500 680 3000 670 2500 660 650 2000 640 1500 630 1000 620 500 610 0 1990 1995 2000 2005 1990 1995 2000 2005 year year Source: FAO, FAOSTAT. Available from http://faostat.fao.org/site/567/ Source: FAO, FAOSTAT. Available from http://faostat.fao.org/site/567/ DesktopDefault.aspx?PageID=567#ancor, 2011. DesktopDefault.aspx?PageID=567#ancor, 2011. Malaysia due to rice production over the assessment 3. Determine what percentage of land-use change is period. Assuming the GHG inventory is being assessed due to converted cropland in 2010 companies should also consider whether Looking at the major crops dynamics in Malaysia over the any recent changes in land use in Malaysia may have past 20 years, table B.2 shows a decrease in harvested caused an increase in rice production over the past area for some crops and an increase in harvested area for two years not shown in the data. If there is no reason palm oil. This indicates that the total growth of harvested to believe this is the case, the company can assume area in the country is driven by increases in palm oil that no land-use change impacts are attributable to production. the studied product rice. As table B.2 suggests, around 27 percent of the overall Taking the same approach for palm oil, it is obvious from land-use growth could potentially come from the figure B.4 that there has been an increase in land used for conversion of other cropland where area is decreasing. palm production over the assessment period. Therefore the company may assume that 72 percent of the palm oil produced in Malaysia comes from At this point a company can either assume that all the land areas converted from a different land category. This is converted from a different land category (e.g., forest, assumption should not be made if the total area of grassland) to palm (see step 4), or they can estimate cropland is decreasing, or if the country has specific what percentage of land is converted within the cropland efforts in place to convert degraded cropland to pasture category and therefore not subject to land-use change. land or another type of land category. In these cases, the decrease in other cropland may be due to those efforts and conversion to the studied product. [123]
- 126. Box [B.2] Estimatingland-use change impacts without specific data (continued) Table [B.2] Top crops and the difference in areas harvested (ha) from 1988 to 2010 in Malaysia Product Area harvested Area harvested Difference [ha] 1988 [ha] 2008 [ha] Coconuts 327,812 174,000 -153,812 Natural rubber 1,660,000 1,247,000 -413,000 Oil palm fruit 1,530,905 3,900,000 2,369,095 Rice, paddy 671,755 667,656 -4,099 Others in sum 566,686 489,519 -77,167 Total growth 2,369,095 Total decrease 648,078 % growth that can be 27.4 covered by crop to crop conversion Source: FAO, FAOSTAT. Available from http://faostat.fao.org/site/567/DesktopDefault.aspx?PageID=567#ancor, 2011. 4. Determine type of land converted should perform a scenario uncertainty analysis to show Malaysia has a tropical climate, and according to statistics the impact of different assumptions. For example, if a the majority of land is forest (66 percent) or cropland crop is being produced in a country with tropical forest (31 percent). Therefore, it should be assumed that 13 land and grassland that could be converted, companies the land-use change occurred from tropical forest to should assume the tropical forest is being converted and cropland to meet the increased demand for palm oil fruit. use grassland conversion for an uncertainty calculation. Companies can use the IPCC default values to determine 5. Distribute land-use change impacts what the carbon stock change associated with this land- Unless the default data collected in step 4 is on an annual use change would be. The company also needs to assume basis, the company needs to distribute the land-use what the land-use change practices would typically be change impacts across the amortization period for the when forest land is converted to cropland in Malaysia – product. Assuming palm oil is harvested on an annual for example, whether the forest biomass is burned during basis, 1/20th of the land-use change impacts are applied conversion and what fertilizers are applied to prepare the to a yearly harvest of palm oil. This value is further land for crop production. normalized to the reference flow basis for inclusion in the In some cases identifying the type of land converted may inventory results. not be as straightforward. In such cases, companies [124] Product Life Cycle Accounting and Reporting Standard
- 127. Appendix B. Land-Use Change Impacts 2 It is recognized that a change in carbon stock can result in either a B.2.1 stimating significance E removal or emission of carbon from or to the atmosphere. However, for land-use change impacts because this standard accounts for the GHG inventory of a product, When specific land data are not available, companies may it is more likely that the use of biomass (and not the planting or also chose to estimate the potential significance of land- re-growth of biomass) will results in GHG emissions than removals. use impacts on their products to determine if a justifiable Growing biomass to create a GHG credit is not attributable to a exclusion is appropriate. For example, a product that uses product following this standard methodology. However in some a bio-based polymer as an input could estimate the impact cases, such as a carbon stock change from till to no-till crop rotation) of land-use change assuming the worst case scenario (e.g., or use of degraded lands, a company may see a net positive land-use all comes from land that was converted from natural forest) change impact (e.g., more removal than emissions). and determine whether this is insignificant, applying the 3 This refers only to biomass burning, liming, and other practices used to prepare converted land. Biomass burning and fertilizer same rules as described in chapter 7. If land-use impacts are application due to agricultural and forestry practices are also deemed significant using this estimation, the company can included in the inventory as attributable processes, separate from either include the worst case values in the report or go back land-use change impacts. and try to estimate the potential impact using statistical 4 IPCC, 2006 IPCC Guidelines for National Greenhouse Gas data. If land-use impacts are insignificant, then this should Inventories, vol.4, Agriculture, Forestry and Other Land Use, be included as a justifiable exclusion in the inventory report. eds. H.S. Eggleston, L. Buendia, K. Miwa, T. Ngara and K. Tanabe (Hayama, Japan: IGES,2006). 5 IPCC, 2006 IPCC Guidelines for National Greenhouse Gas B.3 Soil carbon Inventories, vol.4, Agriculture, Forestry and Other Land Use, When land-use change occurs, some of the carbon stock eds. H.S. Eggleston, L. Buendia, K. Miwa, T. Ngara and K. Tanabe change that results is due to changes in the carbon stock of (Hayama, Japan: IGES,2006). the soil. For example, converting natural land to cultivated 6 The 2006 IPCC guidelines give values for forest land above and land reduces the amount of carbon the soil can store. The below a certain density of biomass. If the removal of biomass does not cause a change in carbon stock value, then land-use change IPCC factors for calculating carbon stock changes due to impacts may be calculated as zero. land-use change include estimates of soil carbon change. 7 It is important to note that nearly all fires in tropical forests are man-made. However, soil carbon loss can continue even after land-use 8 IPCC, 2006 IPCC Guidelines for National GHG Inventories, vol. 4: change as a result of land-use practices such as harvesting Agriculture, Forestry, and Other Land Use. and fertilizer application. On the other hand, switching land- 9 FAO, FAOSTAT. Available from http://faostat.fao.org, 2011. use practices can improve the carbon stock of soil, resulting 10 Distribution is used in reference to land-use change impacts to refer to the apportionment of impacts over the amortization in CO2 removal. Companies may include soil carbon change period. Allocation is defined in chapter 9 as portioning inputs and as a result of land-use practices in their inventory results outputs of a common process to its product and co-products. if they are able to reasonably estimate the emissions or Both can occur when calculating land-use change impacts. removals. Companies should report whether the soil carbon 11 Remote sensing is when current multispectral sensors provide change is included in the inventory results. spectral data for identifying and mapping the crop types allowing for precise monitoring of land-use changes. Current drawbacks of this method are the relatively recent systematic data collection endnotes (no regular multispectral coverage for 20 years ago timeframe), 1 The guidance presented here is based on methodologies and and the costs of images and processing. guidelines given in the 2006 IPCC Guidelines for National GHG 12 Some examples of market-based models for the agriculture Inventories, Volume 4: Agriculture, Forestry, and Other Land and forestry sector include the Food and Agricultural Policy Use. A company is encouraged to look to the most recent Research Institute (FAPRI) and the Forest and Agricultural Sector IPCC guidelines to ensure accurate and up-to-date accounting Optimization Model (FASOM). of land use and land-use change emissions. However, it is 13 World Resources Institute, EarthTrends: Environmental important to note that while the IPCC guidelines have useful and Information. Available from http://earthtrends.wri.org. comprehensive information, their focus is on national inventories Washington DC: World Resources Institute.2007. and therefore some details are not applicable. [125]
- 128. Appendix C. DataManagement Plan A data management plan documents the product inventory process and the internal quality assurance and quality control (QA/QC) procedures in place to enable the preparation of the inventory from its inception through to final reporting. It is a valuable tool to manage data and track progress of a product inventory over time, and can also be useful as an assurance readiness measure since it contains much of the data needed to perform assurance. This appendix provides guidance to help companies The review evaluates whether the inventory complies create and maintain an effective data management plan. with the quality control specifications outlined in the data Companies may already have similar procedures in place management plan. Peer reviews and audits should be for other data collection efforts, such as meeting ISO conducted by someone not involved in the development standards or corporate GHG accounting requirements. of the product inventory to reduce bias. Establishing data Where possible, these processes should be aligned to management plans is helpful in the product inventory reduce data management burdens. assurance process and they should be made available to assurance providers (whether internal or external). At a minimum the data management plans should contain C.1 Overview of the data the following items: management plan The quality control portion of the data management • Description of the studied product, unit of analysis, plan outlines a system of routine technical activities and reference flow to determine and control the quality of the product • Information on the entity(ies) or person(s) responsible inventory data and the data management processes. for measurement and data collection procedures The purpose is to ensure that the product inventory • All information that describes the product’s inventory does not contain incorrect statements by identifying boundary and reducing errors and omissions; providing routine • Criteria used to determine when a product inventory is checks to maximize consistency in the accounting re-evaluated process; and facilitating internal and external inventory • Data collection procedures review and assurance. • Data sources, including activity data, emission factors and other data, and the results of any data quality The quality assurance portion of the data management assessment performed plan involves peer review and audits to assess the quality • Calculation methodologies, including unit conversions of the inventory. Table C.2 includes recommended quality and data aggregation assurance and control procedures. Peer review involves • Length of time the data should be archived reviewing the documentation of the product accounting • Data transmission, storage, and backup procedures methodology and results, but typically does not rigorously • All QA/QC procedures for data collection, input and review the data used or the references. This review aims handling activities, data documentation, and emissions to reduce or eliminate any inherent error or bias in the calculations process used to develop the inventory and assess the effectiveness of the internal quality control procedures. [126] Product Life Cycle Accounting and Reporting Standard
- 129. Appendix C. DataManagement Plan The process of setting up a data management system 5. Review final product inventory and reports. Review should involve establishing standard procedures to procedures should be established that match the address all of the data management activities, including purpose of the inventory and the type of assurance the quality control and quality assurance aspects of performed. Internal reviews should be undertaken developing a product inventory. in preparation for the assurance process by the appropriate department within a company, such as an internal audit or accounting department. C.2 Creating a data management plan 6. Establish formal feedback loops to improve data To develop a data management plan, the following steps collection, handling, and documentation processes. should be undertaken and documented. Feedback loops are needed to improve the quality 1. Establish a product accounting quality person/ of the product inventory over time and to correct any team. This person/team should be responsible for errors or inconsistencies identified in the review process. implementing and maintaining the data management 7. Establish reporting, documentation, and archiving plan, continually improving the quality of product procedures. Establish record-keeping processes for inventories, and coordinating internal data exchanges what and how data should be stored over time, what and any external interactions (such as with relevant information should be reported as part of internal product accounting programs and assurance and external inventory reports, and what should be providers). The person/team may be responsible for all documented to support data collection and calculation product inventories undertaken by a company or for methodologies. The process may also involve aligning an individual product inventory. or developing relevant database systems for record 2. Develop a data management plan. For publicly- keeping. Systems may take time to develop, and it is disclosed product inventories, the plan should cover important to ensure that all relevant information is the components outlined in the section above (also collected prior to the establishment of the system and see table C.1) Documenting this information should then transferred to the system once it is operational. assist with completing repeat product inventories and The data management plan is likely to be an evolving assessing and improving the quality of the current document that is updated as data sources change, product inventory. data handling procedures are refined, calculation Development of the data management plan methodologies improve, product inventory should begin before any data is collected to ensure responsibilities change within a company, or the business all relevant information about the inventory is objectives of the product inventory change. documented as it proceeds. The plan should evolve Table C.1 outlines which components should be included over time as data collection and processes are refined. in a data management plan and can be used as a guide for 3. Perform generic data quality checks based on creating a plan or for pulling together existing documents the data management plan. Generic checks to constitute the plan. should be applied to all aspects of the inventory process, focusing on data quality, data handling, documentation, and calculation procedures. 4. Perform specific data quality checks. Specific checks are more in-depth than generic and should be made for those sources, processes, and/or activities that are major contributors to the product inventory and/ or have high levels of uncertainty (see chapter 10 on assessing uncertainty). [127]
- 130. Table [C.1] Datamanagement plan checklist Component Information Rationale Responsibilities Name and contact details of persons This ensures institutional knowledge responsible for: is maintained and allows relevant • Management of product inventory person(s) to be identified as • Data collection for each process accountable for: • Internal review or audit procedures • Confirming and checking • Assurance procedures information during any internal or external audit procedures • Producing consistent future product inventory Product description • Description of the product and To provide internal auditors, assurance functional unit providers, and those doing future product inventories, with information on the product/functional unit Inventory boundary • Inventory boundary description (e.g., To provide internal auditors, assurance cradle-to-grave or cradle-to-gate) providers, and those doing future • How the boundary was derived product inventories with sufficient • Attributable processes included in the information to understand and inventory replicate boundary decisions • Attributable processes excluded from the inventory (including rationale for exclusion) • Information on how the product use and end-of-life profile was determined Allocation • Allocation methodologies used and To provide internal auditors, assurance where they were used providers, and those doing future product inventories with sufficient information to understand and replicate allocation decisions Data summary • Data collection procedures, including Records all data sources and allows data sources for each process others to locate data sources (for audit or future product inventories). Also provides information on what suppliers have been approached for data • How data quality assessment and Enables data quality to be tracked over uncertainty assessment were time and improved undertaken [128] Product Life Cycle Accounting and Reporting Standard
- 131. Appendix C. DataManagement Plan Table [C.1] Data management plan checklist (continued) Component Information Rationale Data summary • Data sources where better quality Identifies where data sources should (continued) data is preferable and plan for how to be improved over time (e.g., needed improve that data emissions for laptop computer but could only obtain desktop computer information), including those suppliers who were asked to provide data and those that were not • Criteria used to determine when This allows data and information an inventory is to be re-evaluated, sources to be tracked and compared including the relevant information, over time. It may also involve changes to the system to be tracked identifying a system (e.g., document over time, and how these changes tracking and identification system) to should be tracked ensure data and information is easily located and under what conditions this information/data was used or collected • Calculation methodologies used Provides internal auditors, assurance (and references). This includes providers, and those doing future documenting where the calculation product inventories with details on methodology for any data used was how emissions were calculated not available. Inventory results • Calculation methodologies and Noting methodological changes allows calculations changes in methodologies over time for easier baseline recalculation when tracking inventory improvements • GWP values used Allows for consistency over time Performance tracking • When tracking performance, details Prescribes clearly a trigger for of the base inventory adjustment adjusting a base inventory enabling policy tracking of performance over time Data storage • How and where data is stored Allows information to be easily located procedures • Length of time data is to be archived Keeps a record of how long information is stored to prevent looking for information that is no longer kept • Backup procedures Ensures backup procedures are implemented QA/QC procedures • QA/QC procedures used Ensures that adequate processes are (see table C.2 for detailed guidance) in place to check data collection, input and handling, data documentation, and emissions calculations [129]
- 132. Table [C.2] Recommendedquality assurance/quality control procedures Activity Procedure Data collection, input, and handling activities • Transcription errors • Check a sample of input data in each process for transcription errors in data collection • Uncertainty • Check that the calculated uncertainties are complete and calculated correctly estimates Data documentation • Transcription errors • Confirm that bibliographical data in references are properly cited. in references • Ensure that all relevant references are archived and storage of all references used • Storing information • Check that inventory boundary, base inventory (if relevant), GHGs included, on inventory allocation methodology uses, data sources, and any relevant assumptions are methodology, data, documented and archived and data quality • Check that all data quality indicators are described, documented, and archived for each process • Check for consistency in emissions sources and data sources to similar product inventories • Recording parameter • Check that all units are appropriately labeled in calculation sheets and unit information • Check that all units are correctly transferred through all calculations and aggregation of emissions in all processes • Check that conversion factors are correct • Check any temporal or spatial adjustment factors are appropriate and correctly used • Recording calculation • Check that all calculation methodologies are documented methodologies • Check that any changes to calculation methodologies are documented • Database/calculation • Ensure all fields and their units are labeled in database/calculation sheet sheet integrity • Ensure the database/calculation sheet is documented and the structure and operating details of the database/calculations sheets are archived • Review of internal • Check there is sufficient internal documentation to support the estimates and documentation and enable the reproduction of the emissions and data quality assessment, and archiving uncertainty estimations • Check that all data, supporting data and records are archived and stored to facilitate a detailed review • Check that the archive is securely stored [130] Product Life Cycle Accounting and Reporting Standard
- 133. Appendix C. DataManagement Plan Table [C.2] Recommended quality assurance/quality control procedures (continued) Activity Procedure Calculating emissions and checking calculations • Aggregation • Ensure that the aggregation of emissions from all processes is correct of emissions • Emissions trends • Where possible, compare emissions from each process (or total product emissions) to previous estimates. If significant departures, check data inputs, assumptions and calculation methodologies • Where possible, compare material and energy purchases for each process (or in total) against generic industry averages Calculation • Reproduce a sample set of emissions and removals calculations to cross-check the methodologies application of calculation methodologies • Where possible, cross-check calculation methodologies used against more or less complex methodologies to ensure similar results are achieved [131]
- 134. Abbreviations BSI British Standards Institution QA/QC Quality Assurance/Quality Control CH4 Methane R&D Research and Development CO2 Carbon Dioxide SETAC Society of Environmental Toxicology and Chemistry CO2e Carbon Dioxide Equivalent SF6 Sulfur Hexafluoride DEFRA UK Department of Environment Food and Rural Affairs SKU Stock-Keeping Unit EEIO Environmentally Extended Input-Output UNEP United Nations Environment Programme EPD Environmental Product Declaration UNFCCC United Nations Framework Convention on Climate Change FAO Food and Agriculture Organization UNSPSC United Nations Standard Products and GHG Greenhouse Gas Services Code GIS Geographic Information System WBCSD World Business Council for Sustainable GTP Global Temperate Potential Development GWP Global Warming Potential WRI World Resources Institute HFCs Hydrofluorocarbons ILCD International Reference Life Cycle Data IPCC Intergovernmental Panel on Climate Change ISO International Organization for Standardization kg Kilogram LCA Life Cycle Assessment LCI Life Cycle Inventory MW Megawatt NAICS North American Industry Classification System NGO Non-Governmental Organization N2O Nitrous Oxide O&M Operation and Maintenance PAS 2050 Publicly Available Specification 2050 PCR Product Category Rule PET Polyethylene Terephthalate PFCs Perfluorocarbons [132] Product Life Cycle Accounting and Reporting Standard
- 135. Glossary Allocation The partitioning of emissions and removals from a common process between the studied product’s life cycle and the life cycle of the co-product(s).1 Assurance The level of confidence that the inventory results and report are complete, accurate, consistent, transparent, relevant, and without material misstatements. Assurer A competent individual or body who conducts the assurance process, whether internally within the company or externally. Attributable processes Service, material, and energy flows that become the product, make the product, and carry the product through its life cycle. Attributional approach An approach to LCA where GHG emissions and removals are attributed to the unit of analysis of the studied product by linking together attributable processes along its life cycle.2 Audit trail Well organized and transparent historical records documenting how the GHG inventory was compiled. Biogenic Produced by living organisms or biological processes, but not fossilized or from fossil sources.3 Carbon stock The total amount of carbon stored on a plot of land at any given time in one or more of the following carbon pools: biomass (above and below ground), dead organic matter (dead wood and litter), and soil organic matter.4 A change in carbon stock can refer to additional carbon storage within a pool, the removal of CO2 from the atmosphere, or the emission of CO2 to the atmosphere. Common process One process that has multiple valuable products as inputs and/or outputs including the studied product and co-product(s). Comparative assertion An environmental claim regarding the superiority or equivalence of one product versus a competing product that performs the same function.5 Consequential approach An approach to LCA where processes are included in the life cycle boundary to the extent that they are expected to change as a consequence of a change in demand for the unit of analysis.6 Consumer An individual that purchases and uses a product. Co-product A product exiting the common process that has value as an input into another product’s life cycle. [133]
- 136. Cradle-to-gate inventory A partial life cycle of an intermediate product, from material acquisition through to when the product leaves the reporting company’s gate (e.g., immediately following the product’s production). Cradle-to-grave inventory Removals and emissions of a studied product from material acquisition through to end-of-life. Customer An entity that purchases, rents, or uses the products of another entity (i.e., a supplier). Direct emissions data Emissions released from a process (or removals absorbed from the atmosphere) determined through direct monitoring, stoichiometry, mass balances, or similar methods. Downstream GHG emissions or removals associated with processes that occur in the life cycle of a product subsequent to the processes owned or controlled by the reporting company.7 Emissions factor GHG emissions per unit of activity data. End-of-life stage A life cycle stage that begins when the used product is discarded by the consumer and ends when the product is returned to nature (e.g., incinerated) or allocated to another product’s life cycle. Environmentally extended Emission factors developed through the analysis of economic flows and used to estimate input-output (EEIO) GHG emissions for a given industry or product category.8 Extrapolated data Data specific to another process or product that has been adapted or customized to resemble more closely the conditions of the given process in the studied product’s life cycle. Final product Goods and services that are ultimately consumed by the end user rather than used in the production of another good or service. Financial activity data Monetary measures of a process that result in GHG emissions or removals. First party (self or Assurance performed by a person(s) from within the reporting company but independent internal) assurance of the GHG inventory determination process. Function The service provided by the studied product. Functional unit The quantified performance of the studied product.9 Gate-to-gate The emissions and removals attributable to a studied product while it is under the ownership or control of the reporting company. GHG impact The results calculated when GHG emissions and removals are multiplied by the relevant global warming potential (GWP). [134] Product Life Cycle Accounting and Reporting Standard
- 137. Glossary Global warming potential A factor used to calculate the cumulative radiative forcing impact of multiple specific (GWP) GHGs in a comparable way.10 Indirect land-use change When the demand for a specific land use induces a carbon stock change on other lands. Insignificance threshold The threshold below which a process, input, or output can be considered insignificant to the studied product’s life cycle inventory. Intermediate products Goods that are used as inputs to the production of other goods or services. Inventory report The full reporting requirements, plus any optional information, reported publicly in conformance with the Product Standard. Inventory results The GHG impact of the studied product per unit of analysis. Land use categories Forest land, cropland, grassland, wetlands, settlements and other lands.11 Land-use change Occurs when the demand for a specific land use results in a change in carbon stocks on that land, due to either a conversion from one land-use category to another or a conversion within a land-use category. Land-use change impacts Emissions and removals due to land-use change. Level of assurance The degree of confidence stakeholders can have over the information in the inventory report. Life cycle Consecutive and interlinked stages of a product system, from raw material acquisition or generation of natural resources to end-of-life. Life cycle assessment Compilation and evaluation of inputs, outputs and potential environmental impacts of a product system throughout its lifecycle.12 Life cycle stage A useful categorization of the interconnected steps in a product’s life cycle for the purposes of organizing processes, data collection, and inventory results. Material acquisition and A life cycle stage that begins when resources are extracted from nature and ends when pre-processing stage the product components enter the gate of the studied product’s production facility. Material misstatement Individual or aggregate errors, omissions, and misrepresentations that significantly impact the GHG inventory results and could influence a user’s decisions. Non-attributable processes Processes and services, materials and energy flows are not directly connected to the studied product because they do not become the product, make the product, or directly carry the product through its life cycle. [135]
- 138. Primary data Data from specific processes in the studied product’s life cycle. Process activity data Physical measures of a process that result in GHG emissions or removals. Product Any good or service. Product category Group of products that can fulfill equivalent functions.13 Product distribution A life cycle stage that begins when the finished studied product leaves the gate of the and storage stage production facility and ends when the consumer takes possession of the product. Product GHG inventory Compilation and evaluation of the inputs, outputs, and the potential GHG impacts of a product system throughout its life cycle. Product rule A document containing additional specifications needed to enable comparisons or declarations about a product or product category. Production stage A life cycle stage that begins when the product components enter the production site for the studied product and ends when the finished studied product leaves the production gate. Proxy data Data from a similar activity that is used as a stand-in for the given activity. Proxy data can be extrapolated, scaled up, or customized to represent the given activity. Recycling processes Processes that occur as a result of a product or material being reused or recycled as a material input into another product’s life cycle. Reference flow The amount of studied product needed to fulfill the function defined in the unit of analysis.14 Removal The sequestration or absorption of GHG emissions from the atmosphere, which most typically occurs when CO2 is absorbed by biogenic materials during photosynthesis. Reporting company The company performing the product GHG inventory in conformance with the Product Standard. Same inherent properties When a recycled material has maintained its properties (e.g., chemical, physical) such that (recycling) it can be used as a direct replacement of virgin material. Scope 3 inventory A reporting organization’s indirect emissions other than those covered in scope 2. A company’s scope 3 inventory includes the upstream and downstream emissions of the reporting company. Secondary data Process data that are not from specific processes in the studied product’s life cycle. Sector guidance A document or tool that provides guidance for performing a product GHG inventory within a given sector. [136] Product Life Cycle Accounting and Reporting Standard
- 139. Glossary Service life The amount of time needed for a product to fulfill the function defined in the unit of analysis. Studied product The product for which the GHG inventory is performed. Third party (external) Assurance performed by a person(s) from an organization independent of the product assurance GHG inventory determination process. Time period The period of time when attributable processes occur during the studied product’s life cycle, from when materials are extracted from nature until they are returned to nature at the end-of-life (e.g., incinerated) or leave the studied product’s life cycle (e.g., recycled). Qualitative uncertainty A general and imprecise term which refers to the lack of certainty in data and methodology choices, such as the application of non-representative factors or methods, incomplete data on sources and sinks, lack of transparency, etc. Quantitative uncertainty Measurement that characterizes the dispersion of values that could reasonably be attributed to a parameter (adapted from ISO 1995).15 Unit of analysis The basis on which the inventory results are calculated; the unit of analysis is defined as the functional unit for final products and the reference flow for intermediate products. Upstream GHG emissions or removals associated with processes that occur in the life cycle of a product prior to the processes owned or controlled by the reporting company.16 Use stage A life cycle stage that begins when the consumer takes possession of the product and ends when the used product is discarded for transport to a waste treatment location or recycled into another product’s life cycle. Waste An output of a process that has no market value. [137]
- 140. endnotes 1 Adapted from ISO 14044:2006. 2 Adapted from UNEP and SETAC, Global Guidance Principles for Life Cycle Assessment Databases. 2011. 3 Adapted from British Standards Institution et al. PAS 2050:2008: Specification for the assessment of life cycle greenhouse gas emissions of goods and services. 4 IPCC, 2006 IPCC Guidelines for National GHG Inventories, Volume 4: Agriculture, Forestry, and Other Land Use. 5 International Organization of Standardization, ISO 14044:2006, Life Cycle Assessment: Requirements and Guidelines. 6 Adapted from UNEP and SETAC, Global Guidance Principles for Life Cycle Assessment Databases. 2011. 7 Adapted from British Standards Institution et al. PAS 2050:2008: Specification for the assessment of life cycle greenhouse gas emissions of goods and services. 8 Adapted from British Standards Institution et al. PAS 2050:2008: Specification for the assessment of life cycle greenhouse gas emissions of goods and services. 9 Adapted from ISO 14044:2006. 10 Adapted from IPCC, IPCC Fourth Assessment Report, 2007. 11 IPCC, 2006, Guidelines for National GHG Inventories, Volume 4: Agriculture, Forestry, and Other Land Use. 12 International Organization of Standardization, ISO 14044:2006, Life Cycle Assessment: Requirements and Guidelines. 13 International Organization for Standardization, ISO 14025:2006, Environmental labels and declarations-- Type III environmental declarations -- Principles and procedures. 14 Adapted from ISO 14044:2006. 15 International Organization for Standardization, 1995, ISO/IEC Guide 98:1995. Guide to the expression of uncertainty in measurement (GUM). 16 Adapted from British Standards Institution et al. PAS 2050:2008: Specification for the assessment of life cycle greenhouse gas emissions of goods and services. [138] Product Life Cycle Accounting and Reporting Standard
- 141. References Atherton, John. “Declarationby the Metals Industry on International Organization for Standardization. ISO Recycling Principles.” International Journal of Life Cycle 14044:2006, Life Cycle Assessment: Requirements and Assessment, 12 no. 1 (2007):59-60. Guidelines. Geneva. British Standards Institution et al. PAS 2050:2008: International Organization for Standardization. ISO Specification for the assessment of life cycle greenhouse 14049:2000, Environmental management — Life cycle gas emissions of goods and services. assessment — Examples of application of ISO 14041 to goal and scope definition and inventory analysis. Geneva. European Commission - Joint Research Centre - Institute for Environment and Sustainability. “International International Organization for Standardization. ISO Reference Life Cycle Data System (ILCD) Handbook 14064-3: 2006, Greenhouse gases - Part 3: Specification - General guide for Life Cycle Assessment - Detailed with guidance for the validation and verification of guidance.” First edition, March 2010. Luxembourg: greenhouse gas assertions. Geneva. Publications Office of the European Union, 2010. International Organization for Standardization. ISO/IEC FAO. FAOSTAT. Available from http://faostat.fao.org/ Guide 98:1995, Guide to the expression of uncertainty in site/567/default.aspx#ancor, 2011. measurement (GUM). Geneva. Greenhouse Gas Protocol. Corporate Accounting and IPCC. Fourth Assessment Report. 2007. Reporting Standard. 2004. IPCC. Summary for Policymakers. In Climate Change 2007: Huijbregts, Mark A. J. “Application of uncertainty Mitigation. Contribution of Working Group III to the Fourth and variability in LCA. Part I: A General Framework Assessment Report of the Intergovernmental Panel on for the Analysis of Uncertainty and Variability in Life Climate Change, ed. B. Metz, O.R. Davidson, P.R. Bosch, R. Cycle Assessment.”International Journal of Life Cycle Dave, L.A. Meyer. Cambridge, United Kingdom and New Assessment, 3 no. 5 (1998):273 – 280. York, NY, USA: Cambridge University Press, 2007. International Working Group. Life Cycle Inventory Analysis: IPCC. 2006 IPCC Guidelines for National Greenhouse Gas Enhanced Methods and Applications for the Products of Inventories, vol.4, Agriculture, Forestry and Other Land the Forest Industry. Washington DC: American Forest and Use, eds. H.S. Eggleston, L. Buendia, K. Miwa, T. Ngara and Paper Association, 1996. K. Tanabe (Hayama, Japan: IGES,2006). International Organization for Standardization. ISO UNEP and SETAC. Global Guidance Principles for Life 14021:1999, Environmental labels and declarations -- Cycle Assessment Databases. 2011. Self-declared environmental claims (Type II environmental Weidema, B.P. and M.S. Wesnaes. Data quality labeling). Geneva. management for life cycle inventories - an example International Organization for Standardization. ISO of using data quality indicators. Journal of Cleaner 14024:1999, Environmental labels and declarations — Production. 4 no. 3-4 (1996): 167-174. Type I environmental labeling — Principles and World Resources Institute. “EarthTrends: Environmental procedures. Geneva. Information.” Available from http://earthtrends.wri.org. International Organization for Standardization. ISO Washington DC: World Resources Institute.2007. 14025:2006, Environmental labels and declarations — Zaks, D.P.M., C. C. Barford, N. Ramankutty and J. A. Type III environmental declarations — Principles and Foley.”Producer and consumer responsibility for procedures. Geneva. greenhouse gas emissions from agricultural production – a perspective from the Brazilian Amazon.”Environmental Research Letters. 4 (2009). [139]
- 142. Recognitions Advisors Fabio Peyer, AmcorLtd. Matthew Bateson, World Business Council Jannie Bell, Dell Inc. for Sustainable Development Björn Hannappel, Deutsche Post DHL Jennifer Morgan, World Resources Institute Carina Alles, DuPont Janet Ranganathan, World Resources Institute Lisa Grice, ENVIRON International Corporation Ranping Song, World Resources Institute Road Testing Companies 3M Italcementi Group Acer Kunshan Tai Ying Paint AkzoNobel Lenovo Alcoa Levi Strauss & Co. Amcor Ltd. Mitsubishi Chemical Holdings Corporation Anvil Knitwear New Belgium Brewing Baosteel Group Corporation PepsiCo BASF Procter & Gamble Belkin International, Inc. Quanta Shanghai Manufacturing City, Tech-Front Bloomberg LP (Shanghai) Computer Co. Ltd. BT plc Rogers Communications Deutsche Post DHL RSA Insurance Group plc Deutsche Telekom AG Shanghai Zidan Printing Co., Ltd Diversey Shell DuPont Suzano Pulp & Paper Ecolab, Inc. Swire Beverages (Coca-Cola Bottling Partner) Edelweiss TAL Apparel GE Global Research Verso Paper Corp. GNP Company WorldAutoSteel Herman Miller, Inc. Product Standard Technical Working Group Members Patrick Wood, AgRefresh Connie Sasala, Cameron-Cole, LLC Johan Widheden, AkzoNobel Pierre Boileau, Canadian Standards Association Cyrille de Labriolle, API-HK Steve Marsden, Carbon Step Change (Chair) Deirdre Wilson, Applied Sustainability International, LLC Scott Kaufman, Carbon Trust Richard Sheane, Best Foot Forward Thomas Wiedmann, Centre for Sustainability Accounting Ltd. Craig Simmons, Best Foot Forward and Footprinter Laura Verduzco, Chevron Energy Technology Company Marcelo Valadares Galdos, Brazilian Bioethanol Science Richard Mendis, Clear Standards and Technology Laboratory J. Renee Morin, ClearCarbon Gabrielle Ginér, BT plc Steve Davis, The Climate Conservancy (Chair) Glyn Stacey, BT Group plc Tashweka Anderson, Computacenter [140] Product Life Cycle Accounting and Reporting Standard
- 143. Recognitions Product Standard TechnicalWorking Group Members (continued) Jannick H Schmidt, The Danish Centre for Environmental Suzie Greenhalgh, Landcare Research NZ Ltd. (Chair) Assessment, Aalborg University Taylor Wilkinson, LMI (Chair) Atsushi Inaba, Department of Environmental and Energy Paul Smith, LRQA Ltd. Chemistry, Kogakuin University Oliver Ferrari, MarionEco Emelia Holdaway, Ecofys Edgar E Blanco, Massachusetts Institute of Technology Yves Loerincik, Ecointesys - Life Cycle Systems Kiyoshi Matsuda, Mitsubishi Chemical Corporation Catarina Furtado, Ecoprogresso Jeffrey Mittelstadt, National Council Lisa Brady, EMC Corporation for Advanced Manufacturing Kathrin Winkler, EMC Corporation Caroline Gaudreault, NCASI Brenna Zimmer, EMC Corporation Reid Miner, NCASI Vivek Dhariwal, Emergent Ventures India Hans H. Wegner, National Geographic Society Mary Stewart, Emergent Ventures India Anthony D’Agostino, National University of Singapore Liu Qiang, Energy Research Institute, China’s National Alison Watson, New Zealand Ministry Development and Reform Commission of Agriculture and Forestry Lisa Grice, ENVIRON International Corporation Jostein Soreide, Norsk Hydro Dave Covell, ENVIRON UK Ltd Wilson Korol, Nortel Networks Ronjoy Rajkhowa, Ernst & Young Tim Moore, Northwest Carbon Pere Fullana, Escola Superior de Comerc Internacional Karen Oxenbøll, Novozymes A/S Niels Jungbluth, ESU-services Ltd. Christian Hochfeld, Öko Institut Alex Loijos, FoodPrint Dietlinde Quack, Öko Institut Angela Fisher, GE Global Research Philippe Letherisien, Orange William P. Flanagan, GE Global Research Eloise Brauner, PE INTERNATIONAL Jacob Park, Green Mountain College Sabine Deimling, PE INTERNATIONAL Shannon Binns, Green Press Initiative Harald Florin, PE INTERNATIONAL Prasad Modak, Green Purchasing Network of India Hannes Partl, PE INTERNATIONAL Shantanu Roy, Green Purchasing Network of India Julia Pflieger, PE INTERNATIONAL Tom Baumann, Greenhouse Gas Management Institute Michael Spielmann, PE INTERNATIONAL Michael Gillenwater, Greenhouse Gas Liila Woods, PE INTERNATIONAL Management Institute Haixiao Zhang, PE INTERNATIONAL Pablo Päster, Hara Duncan Noble, PE INTERNATIONAL, Inc. & Five Winds Terrie K. Boguski, Harmony Environmental, LLC Strategic Consulting Paul Shabajee, Hewlett-Packard Robert ter Kuile, PepsiCo Olle Blidholm, IKEA Group Stephanie Adda, PricewaterhouseCoopers, LLP Xander van der Spree, IKEA Group Helen Slinger, PricewaterhouseCoopers, LLP Luis G. Huertas, Independent Architect Getachew Assefa, Royal Institute Angeline de Beaufort-Langeveld, of Technology – Stockholm Independent Consultant Jonas Dennler, SAP Scott Stewart, Intel Jim Sullivan, SAP Marlen Bertram, International Aluminium Institute Kevin Ramm, SAP AG Kurt Buxmann, International Aluminium Institute Andreas Vogel, SAP Labs Georgios Sarantakos, International Union Chris Librie, SC Johnson for Conservation of Nature Valerie A Slomczewski, SC Johnson Mankaa Nangah Rose, Italcementi Group Lisa Brough, SGS David V. Spitzley, Kimberly-Clark Corporation (Chair) Jan Minx, Stockholm Environment Institute [141]
- 144. Product Standard TechnicalWorking Group Members (continued) Evan Andrews, Sylvatica Verena Radulovic, United States Environmental Pascal Lesage, Sylvatica/CIRAIG Protection Agency Wilhelm Wang, Transreg, LLC Kathleen Vokes, United States Environmental Henry King, Unilever Protection Agency Sarah Sim, Unilever Sarah Froman, United States Environmental Bhawan Singh, Université de Montréal Protection Agency David Guernsey, United Parcel Service Wayne Wnuck, United Technologies Corporation John Kimball, United States Department of Energy Sangwon Suh, University of California Santa Barbara Vince Camobreco, United States Environmental Craig Liska, Verso Paper Protection Agency Jeffrey Rice, Walmart Stores, Inc. Contributors Stefanie Giese-Bogdan, 3M Patricia Ludewig, Caterpillar Sam Lin, Acer Claude Loréa, CEMBUREAU Fiona van den Brink, AkzoNobel Thomas Wiedmann, Centre for Sustainability Accounting Ltd. Marc Luijten, AkzoNobel Meg Crawford, CERES Sara Tollin, AkzoNobel Jianhua Chen, China National Institute of Standardization Johan Widheden, AkzoNobel Liang Chen, China National Institute of Standardization Paola Kistler, Alcan Mei Liu, China National Institute of Standardization Tony Christopher, Alcoa Corinne Reich-Weiser, Climate Earth Casey Wagner, Alcoa Christopher Gleadle, The CMG Consultancy Fabio Peyer, Amcor Ltd. Christoph Meinrenken, Columbia University Gerald Rebitzer, Amcor Ltd. Tony Siantonas, dcarbon8 Ltd. Caterina A. Conti, Anvil Knitwear Steven Moore, Deloitte Touche Tohmatsu Limited Arturo Cepeda, Artequim Björn Hannappel, Deutsche Post DHL Shuichiro Sugimoto, Asahi Glass Co., Ltd. Klaus Hufschlag, Deutsche Post DHL Hiroo Takahashi, Asahi Glass Co., Ltd. Markus Igel, Deutsche Post DHL Tao Liu, Baosteel Group Corporation Mathis Lapenküpper, Deutsche Post DHL Yinghao Liu, Baosteel Group Corporation Patric Pütz, Deutsche Post DHL Hongzhi Shi, Baosteel Group Corporation Stephan Schlabinski, Deutsche Post DHL Giuliana Angonoa-Doehnert, BASF Hans-Jürgen Gerhardy, Deutsche Telekom AG Nicola Paczkowski, BASF Reiner Lemke, Deutsche Telekom AG Anthony Edwards, Belkin International, Inc. Michael Zalan, Deutsche Telekom AG Gregory LeMay, Beverage Industry Daniel A. Daggett, Diversey Environmental Roundtable Carina Alles, DuPont Hans Blonk, Blonk Milieu Advies Dawn Rittenhouse, DuPont Lee Ballin, Bloomberg LP Susanne Veith, DuPont Gabrielle Ginér, BT plc Bo Weidema, Ecoinvent Glyn Stacey, BT Group plc Matt Molinaro, Ecolab, Inc. Ryan Schuchard, Business for Social Responsibility Ali Rivers, Ecometrica Annalisa Schilla, California Air Resources Board Marc Zanter, Edelweiss Ian Lipton, The Carbon Accounting Company Nigel Carter, En-Venture James Leaton, Carbon Tracker Initiative Lixiao Hu, Energy Systems International [142] Product Life Cycle Accounting and Reporting Standard
- 145. Recognitions Contributors (continued) Ines Sousa,ENXSUITE Josephine Przewodnik, RECARBON Deutschland GmbH. Camile Burel, European Bioindustry Association Brian Au, RESET Carbon Jonathan Newton, Ford Motor Company Hicham Elhalaby, Rogers Communications William Flanagan, GE Global Research Paul Pritchard, RSA Insurance Group plc Angela Fisher, GE Global Research Alyssa Farrell, SAS Paul Helgeson, GNP Company Barbara Nebel, Scion Juergen Ritzek, GreenBusinessConsulting Robin Li, SGS-CSTC Standards Technical Services Co., Ltd. Thaddeus Owen, Herman Miller, Inc. Danny Wong, SGS Hong Kong Limited Yoshiaki Ichikawa, Hitachi, Ltd. Fei Han, Shanghai Zidan Printing Co., Ltd. Hemant Bundele, ibLaunch Energy, Inc. Yadi Shen, Shanghai Zidan Printing Co., Ltd. Tim Higgs, Intel Marieke Groenendaal, Shell Ted Reichelt, Intel Stephen Kinder, Shell Silvana Paniagua Tufinio, Intelligence for Business Xavier Riera-Palou, Shell Chris Bayliss, International Aluminium Institute Zoltán Hajdu, Soltub, Ltd. Rose Nangah Mankaa, Italcementi Group Mariana Carlini, Suzano Pulp & Paper Manuela Ojan, Italcementi Group Samuel Kwong, Swire Beverages Sunil Kumar, ITC (Coca Cola Bottling Partner) Yoshikazu Kato, The Japan Gas Association Thomas Yip, TAL Apparel Wenlin Wang , Kunshan Tai Ying Paint Yutaka Yoshida, TOKYO GAS CO., LTD. John Andrews, Landcare Research NZ Javier Fajardo, USDA/FAS/OSTA Craig McCutcheon, Landcare Research NZ Laurence Hamon, Veolia Environnement Barruch Ben-Zekry, Levi Strauss & Co. Research & Innovation Colleen Kohlsaat, Levi Strauss & Co. Guillaume Arama, Veolia Water Xun Gong, Lenovo David Houdusse, Veolia Water William Guthrie, Lenovo Craig Liskai, Verso Paper Corp. Mads Stensen, Maersk Line Lisbeth Dahllöf, Volvo Technology Kara E.Reeve, Massachusetts Institute of Technology Edie Sonne Hall, Weyerhaeuser Kenji Shima, Mitsubishi Chemical Holdings Corporation George Coates, WorldAutoSteel Leah Fry, National Grid Antonia Gawel, World Business Council for Sustainable David B. Goldstein, Natural Resources Defense Council Development Jenn Orgolini, New Belgium Brewing Bernhard Gruenauer, World Business Council for Claus Frier, Novozymes A/S Sustainable Development Stefan Seum, Öko-Institut, Germany Varun Vats, World Business Council for Sustainable Jeff Stein, Open Data Registry Development Robert TerKuille, PepsiCo Wee Kean Fong, World Resources Institute Eros Artuso, PricewaterhouseCoopers, LLP Taryn Fransen, World Resources Institute Christopher Ho, PricewaterhouseCoopers Lauren Gritzke, World Resources Institute Hong Kong/China Stacy Kotorac, World Resources Institute Annie Weisbrod, Procter & Gamble Eliot Metzger, World Resources Institute Diederik Schowanek, Procter & Gamble Environmental Michelle Perez, World Resources Institute Stewardship Organization Laura Pocknell, World Resources Institute Aimee Ding, Quanta Shanghai Manufacturing City, Tech- Neelam Singh, World Resources Institute Front (Shanghai) Computer Co. Ltd. Clare Broadbent, World Steel Association Larry Li, Quanta Shanghai Manufacturing City, Tech-Front (Shanghai) Computer Co. Ltd. [143]
- 146. In-kind Road TestingSupport The Carbon Trust PRé Consultants China National Institute of Standardization PricewaterhouseCoopers, LLP DNV SGS-CSTC Standards Technical Services Co., Ltd. KPMG SGS Hong Kong Limited PE Consulting Consultants China National Institute of Standardization PricewaterhouseCoopers, LLP Quantis RESET Carbon WRI and WBCSD would like to thank the following organizations for their generous financial support: Alcoa Foundation, BP Foundation, Dell Inc., EMC Corporation, Intel Corporation, Kimberly Clark Corporation, PepsiCo, PricewaterhouseCoopers, LLP, Robertson Foundation, SC Johnson & Son, Inc., Siemens, United States Agency for International Development (USAID), United States Environmental Protection Agency (US EPA), United Technologies Corporation, UPS Foundation, and Walmart Foundation. WBCSD, funded by its member companies, also provided direct financial support. Copyright © World Resources Institute and World Business Council for Sustainable Development, September 2011 ISBN 978-1-56973-773-6 Printed on 70# Chorus Art Silk text and 80# cover Printed in USA (30% post consumer recycled) with soy-based inks. [144] Product Life Cycle Accounting and Reporting Standard Design: Alston Taggart, Studio Red Design Cover: Futerra Sustainability Communications
- 147. World Business Council World Resources Institute (WRI) for Sustainable Development (WBCSD) The World Resources Institute is a global environmental The WBCSD is a CEO-led, global coalition of some think tank that goes beyond research to put ideas into 200 companies advocating for progress on sustainable action. We work with governments, companies, and development. Its mission is to be a catalyst for civil society to build solutions to urgent environmental innovation and sustainable growth in a world where challenges. WRI’s transformative ideas protect the earth resources are increasingly limited. The Council provides and promote development because sustainability is a platform for companies to share experiences essential to meeting human needs and fulfilling human and best practices on sustainable development aspirations in the future. issues and advocate for their implementation, WRI spurs progress by providing practical strategies working with governments, non-governmental and for change and effective tools to implement them. intergovernmental organizations. The membership We measure our success in the form of new policies, has annual revenues of USD 7 trillion, spans more products, and practices that shift the ways governments than 35 countries and represents 20 major industrial work, companies operate, and people act. sectors. The Council also benefits from a network of 60 national and regional business councils and We operate globally because today’s problems know partner organizations, a majority of which are based in no boundaries. We are avid communicators because developing countries. people everywhere are inspired by ideas, empowered by knowledge, and moved to change by greater understanding. We provide innovative paths to a sustainable planet through work that is accurate, fair, and independent. WRI organizes its work around four key goals: • People & Ecosystems: Reverse rapid degradation of ecosystems and assure their capacity to provide humans with needed goods and services. Disclaimer • Governance: Empower people and strengthen The GHG Protocol Product Life Cycle Accounting and institutions to foster environmentally sound and Reporting Standard, is designed to promote best socially equitable decision-making. practice GHG accounting and reporting. It has been • Climate Protection: Protect the global climate system developed through an inclusive multi-stakeholder from further harm due to emissions of greenhouse process involving experts from businesses, non- gases and help humanity and the natural world adapt governmental organizations (NGOs), governments, to unavoidable climate change. and others convened by the World Resources • Markets & Enterprise: Harness markets and Institute (WRI) and the World Business Council for enterprise to expand economic opportunity and Sustainable Development (WBCSD). While WBCSD protect the environment. and WRI encourage use of the Product Standard by all In all its policy research and work with institutions, corporations and organizations, the preparation and WRI tries to build bridges between ideas and action, publication of reports or program specifications based meshing the insights of scientific research, economic and fully or partially on this standard is the full responsibility institutional analyses, and practical experience with the of those producing them. Neither WBCSD and WRI, need for open and participatory decision-making. nor other individuals who contributed to this standard assume responsibility for any consequences or damages resulting directly or indirectly from its use in the preparation of reports, program specifications, or the use of reports based on the Product Standard.
- 148. The Greenhouse GasProtocol provides the foundation for sustainable climate strategies and more efficient, resilient and profitable organizations. GHG Protocol standards are the most widely used accounting tools to measure, manage and report greenhouse gas emissions. www.wri.org www.wbcsd.org www.ghgprotocol.org