Product Environmental Footprint (PEF) is a life cycle-based method for measuring a product's environmental performance from raw material extraction to end-of-life disposal. The European Commission developed PEF to provide a comprehensive view of a product's environmental impact, enabling companies to reduce their overall environmental footprint.
With 77% of consumers now considering sustainability as a key factor in their purchasing decisions (IBM, 2024) and the sustainable products market projected to reach $150 billion by 2026 (McKinsey, 2023), PEF has become an essential tool for businesses to remain competitive and meet regulatory requirements, like the EU's Green Deal and Circular Economy Action Plan.
Using PEF can enhance brand image, attract the growing segment of environmentally conscious consumers - willing to pay up to 59% more for sustainable products (IBM, 2024), and reduce costs through improved efficiency and resource management.
Understand what is a product environmental footprint
A definition of product environmental footprint
The Product Environmental Footprint (PEF) is a multi-criteria measure that assesses a product's environmental impacts throughout its life cycle, including resource extraction, production, distribution, use, and disposal.
The purpose of PEF is to provide a consistent and transparent method for companies to quantify and communicate the environmental performance of their products, facilitating comparisons and informed decision-making.
PEF aligns with corporate responsibility goals, helping businesses to reduce environmental impacts, comply with regulations and respond to stakeholder demands for transparency and accountability.
What is the difference between LCA and PEF?
The predecessor and basis of PEF, the Life Cycle Assessment (LCA), is a similar systematic approach to evaluating the environmental impacts of a product or service throughout its entire life cycle, from raw material extraction to disposal.
The key difference between LCA and PEF is that LCA is a broader methodology that can assess multiple environmental impacts, such as climate change, water use and toxicity. PEF, on the other hand, focuses specifically on product-level impacts and is designed to provide a standardised measure for comparison.
PEF can be seen as a subset of LCA tailored to meet businesses' reporting and communication needs, particularly in the context of regulatory frameworks.
What is the difference between product environmental footprint and corporate environmental footprint?
The difference between the Product Environmental Footprint (PEF) and the corporate environmental footprint is that while PEF focuses on the life cycle environmental impacts of specific products, the corporate environmental footprint encompasses the total environmental impacts of a company’s operations, including all products, services and activities.
While PEF can inform corporate strategies and sustainability initiatives, the corporate environmental footprint provides a holistic view of a company's overall environmental performance, which is crucial for comprehensive sustainability reporting and management.
What is the difference between a product environmental footprint and a product carbon footprint?
While the Product Carbon Footprint (PCF) measures total greenhouse gas emissions associated with a product throughout its life cycle in terms of carbon dioxide equivalents (CO2e), PEF encompasses a broader range of environmental impacts beyond just carbon emissions, including resource depletion, water use and ecosystem quality.
While PEF and PCF use life cycle thinking methodologically, PEF follows specific guidelines set by the European Commission, which has standardised the assessment process and allowed for product comparisons.
How to choose the right methods? PEF comparisons
How to calculate a product environmental footprint?
Calculating a Product Environmental Footprint (PEF) involves using a systematic approach to assess the environmental impacts of a product throughout its life cycle.
Accurate data collection is crucial to ensuring the reliability of PEF results. To calculate a PEF, companies must first gather data on resource use, emissions, and waste generated at each stage of the product's life cycle.
Methodologies for calculating PEF include using life cycle assessment (LCA) principles, which help identify and quantify environmental impacts. Companies may also refer to established standards and guidelines, such as the European Commission's PEF methodology, to ensure consistency and comparability in their calculations.
Steps for calculating a PEF include:
- Define the scope: Determine the boundaries of the assessment, including which life cycle stages (e.g., raw material extraction, production, distribution, use, end-of-life) will be included.
- Collect data: Gather quantitative data on inputs (materials, energy) and outputs (emissions, waste) associated with each life cycle stage. This may involve primary data collection from suppliers and secondary data from life cycle databases.
- Assess data quality: Evaluate the reliability and relevance of the collected data, ensuring it meets the necessary standards for accuracy and completeness.
- Calculate inventory results: Use the collected data to calculate the environmental impacts, typically expressed in carbon dioxide equivalents (CO2e) and other relevant metrics.
- Report findings: Compile the results into a comprehensive report that communicates the PEF to stakeholders, ensuring transparency and clarity in the presentation of data.
When calculating a PEF, companies may encounter challenges such as data availability, variability in emission factors, and the complexity of life cycle stages.
Inconsistencies in data sources and methodologies can lead to discrepancies in results, making it challenging to compare PEFs across products or companies. Companies need to adopt standardised methodologies like those established by the European Commission to address these challenges.
These methodologies offer clear guidelines for data collection and calculation processes. Standardisation enhances the credibility of PEF results and facilitates benchmarking and regulatory compliance, which supports companies in their sustainability goals.
Which companies should calculate PEFs and for which products?
Many types of companies across various sectors should consider calculating the Product Environmental Footprint (PEF) of their products. Companies in the manufacturing, retail and consumer goods industries may particularly benefit from PEF.
Manufacturing companies, especially those producing high-impact products like electronics, textiles and food and beverage, can benefit from understanding their environmental impacts to improve sustainability and reduce costs.
For instance:
- The electronics sector accounts for 4% of global greenhouse gas emissions, projected to reach 14% by 2040 (UNEP, 2023).
- The textile industry accounts for 10% of global carbon emissions and 20% of global wastewater (World Bank, 2023).
- Food and beverage manufacturing generates approximately 30% of global greenhouse gas emissions (FAO, 2023).
Retailers can use PEF to assess the sustainability of their product offerings, meet consumer demand for transparency and comply with regulations.
Recent data shows:
- 73% of retailers have implemented sustainability initiatives in their supply chains (Retail Industry Leaders Association, 2023).
- Sustainable products showed a 7x faster growth rate than conventional products in retail (NYU Stern, 2023).
Consumer goods companies can leverage PEF to differentiate their products in a competitive market, enhance brand reputation and respond to increasing consumer awareness about environmental issues:
- 88% of consumers want brands to help them be more environmentally friendly (Futerra, 2023).
- The sustainable consumer goods market is expected to reach $150 billion by 2026 (McKinsey, 2023).
- 66% of consumers consider sustainability when purchasing (PwC Global Consumer Insights Survey, 2024).
Calculating PEF can improve sustainability reporting, allowing companies to communicate their environmental performance transparently to stakeholders. Companies may also experience enhanced brand reputation among eco-conscious consumers and investors.
Additionally, compliance with regulations is crucial as governments increasingly mandate environmental reporting. PEF helps companies meet these requirements and avoid potential penalties and reputational damage.
Companies can use PEF data to identify particular ‘hotspots’ along their product life cycles. These ‘hotspots’ indicate moments of highest environmental impact. With these insights, companies can make beneficial design improvements that reduce the product’s environmental impact.
By understanding the environmental implications of materials and processes, companies can select more sustainable options, such as lower-impact materials or energy-efficient manufacturing techniques.
PEF data can inform product redesigns to enhance recyclability, reduce waste and improve overall sustainability, aligning with consumer preferences and regulatory expectations. Based on PEF findings, engaging with suppliers can lead to collaborative efforts to reduce emissions and improve sustainability across the supply chain.
Key regulations for product environmental footprint
Several key regulations and standards govern the Product Environmental Footprint (PEF). These include:
- EU PEF Regulation: Provides a framework for measuring and communicating product life cycle environmental performance, aiming to enhance transparency and comparability.
- ISO 14040 and ISO 14044 are international standards that outline the principles and requirements for conducting Life Cycle Assessments (LCA), which are foundational to PEF calculations.
- ISO 14067: Specifies requirements for quantifying the carbon footprint of products, focusing on greenhouse gas emissions.
- GHG Protocol Product Standard: This standard offers guidance for companies to quantify and publicly report greenhouse gas emissions associated with specific products. It complements PEF methodologies and provides a framework for environmental impact evaluation.
- National regulations: Depending on the jurisdiction, typically align with EU directives and/or specific local legislation.
Compliance with PEF regulations is crucial for businesses as it ensures they meet legal requirements and avoid potential penalties. Adhering to these regulations enhances a company's credibility and transparency, fostering consumer trust and loyalty.
The PEF method is in a transitional period that will end by 2025. During this time, efforts have been made to mainstream PEF, incorporate its methodology into EU policy, and develop Product Environmental Footprint Category Rules (PEFCR) and EF-compliant datasets.
The European Union’s recent anti-greenwashing directives mandate that sustainability claims must be backed by certified methods that account for lifetime environmental impact. Therefore, PEF is becoming more mainstream in Europe and is the preferred method for quantifying environmental impact within the EU Green Claims Directive.
Companies should stay informed about changes in ISO standards and GHG Protocol updates that may affect methodologies for calculating PEF. Increased emphasis on transparency and accountability in environmental reporting is likely, which may require companies to adopt more rigorous data management practices and improve their sustainability strategies.
Focus on France Ecoscore
France’s eco-score measures the environmental impact of clothing and food products, from raw materials to waste disposal. It is measured using life cycle analysis results stored in France’s public database of life cycle-based environmental indicators for agricultural and food products. These calculations are based on PEF.
Best practices to communicate PEF results to your customers
Effectively communicating Product Environmental Footprint (PEF) results is crucial for building trust and credibility with customers and stakeholders. Transparency in reporting environmental impacts fosters consumer confidence and demonstrates a company's commitment to sustainability.
Clear messaging helps stakeholders understand the significance of PEF data, enabling informed decision-making and encouraging sustainable practices among consumers and businesses alike.
Companies that effectively communicate their environmental performance through PEF can differentiate themselves in the market, appealing to environmentally conscious consumers. Non-compliance may result in reputational damage, loss of market access, and reduced competitiveness, significantly as regulatory scrutiny increases globally.
Best practices for B2B communication
Practical strategies for B2B communication of PEF results include:
- Comprehensive sustainability reports that highlight key metrics and progress towards sustainability goals.
- Presentations that engage business customers and focus on how PEF data can inform their purchasing decisions while aligning with their sustainability objectives.
- Collaborative sustainability initiatives undertaken with business partners provide an opportunity to share PEF insights and drive collective efforts to reduce environmental impacts across the supply chain.
Best practices for B2C communication
One of the best options for B2C communication is the use of clear and informative product labels that display PEF results. This makes it easy for consumers to understand the environmental impact of their purchases.
Using marketing materials to highlight products' sustainability benefits, incorporating PEF data to substantiate claims, and leveraging social media campaigns to engage consumers can enable companies to effectively share stories and visuals that illustrate their commitment to sustainability and the significance of PEF.
Practical strategies for B2C communication of PEF results include:
- Clear metrics: Present PEF results in understandable units (e.g., CO2e per product) to facilitate comparisons.
- Visual representations: Use graphs, charts and infographics to make complex data more accessible and engaging for the audience.
- Context for the data: To enhance credibility, provide background information on how PEF was calculated, including methodologies and assumptions.
- Impact stories: Share examples of how PEF data has led to tangible improvements in sustainability practices within the company or among consumers.
Engaging stakeholders
Engaging stakeholders is essential for fostering collaboration and driving collective action towards sustainability goals. Companies should actively involve suppliers in discussions about PEF results, encouraging them to adopt sustainable practices that align with the company's objectives.
Additionally, customer communication should be two-way, inviting feedback and suggestions on sustainability initiatives and PEF reporting. Maintaining open lines of communication with regulatory bodies also ensures compliance and helps companies stay informed about evolving regulations and standards.
Continuous improvement
Companies should regularly review and update their PEF communication strategies to reflect stakeholder feedback and changing market dynamics. Implementing a feedback loop allows companies to assess the effectiveness of their communication efforts and make necessary adjustments.
Staying informed about industry best practices and emerging trends in sustainability communication can enhance a company's ability to engage effectively with stakeholders and maintain transparency.
The Product Environmental Footprint (PEF) is a vital tool for companies aiming to assess and communicate their environmental impacts. Given its prominence within the EU’s current greenwashing regulations and standardisation by the European Commission, PEF is set to become one of Europe's most important environmental impact methodologies.
Understanding and calculating PEF supports regulatory compliance and enhances brand reputation and consumer trust. By adopting best communication practices, companies can effectively convey their sustainability efforts, engage stakeholders, and contribute to a more sustainable future.
For further guidance on your company's PEF method and decarbonisation for your company book a demo with Plan A.
