Striking the right balance – Mat Langley, Strategic Advisor at Emitwise explores the trade-offs between ease of use, accuracy, and cost when selecting carbon footprinting tools
When it comes to measuring a company’s carbon footprint, businesses today have access to a wide range of tools and approaches, from Product Carbon Footprints (PCFs) to Life Cycle Assessments (LCAs) and user-friendly web-based platforms like the Product Attributes to Impact Algorithm (PAIA). Each option comes with its own trade-offs.
As a starting point, there are a number of factors businesses should consider when selecting the most appropriate tool or combination of solutions. Firstly, they must understand regulatory, client, and internal reporting needs. These requirements may dictate the level of accuracy required.
Secondly, they must determine whether they need to measure Scope 1 (direct emissions), Scope 2 (indirect emissions from energy use), or Scope 3 (emissions across the value chain). Scope 3 can be particularly challenging to measure due to reliance on supplier engagement and primary data.
Thirdly, businesses must assess the composition of their supply chain. A company working with a few large, mature suppliers may require a different approach from one managing a diverse network of smaller suppliers with varying levels of sustainability maturity.
Finally, they must anticipate how their carbon management strategy may evolve. For instance, as businesses move from measuring Scope 1 and 2 emissions to addressing Scope 3, they will need tools that enable supplier engagement and facilitate decarbonisation efforts.
Once these factors have been considered, businesses must weigh the trade-offs between accuracy, ease of use, and cost. Industry-average and spend-based emissions are those which teams use at the beginning of their journey for calculating carbon emissions. These don’t require engagement from suppliers and instead make use of secondary data which is accessible across a number of databases. However, these only offer a rough estimate of a business’ carbon footprint and companies relying on these approaches may find that their emissions increase as supply chain costs rise, even if their actual environmental impact remains unchanged. To address this, businesses should transition to using primary emissions data by engaging suppliers. This shift not only improves accuracy but also enables meaningful comparisons between suppliers, highlighting differences in sustainability maturity. By engaging with suppliers and supporting those with less advanced practices, companies can build stronger partnerships and drive improvements across their value chains.
By comparison, LCAs are among the most comprehensive and accurate solutions available for carbon footprinting. These tools provide detailed insights into a company’s emissions by considering every stage of a product’s lifecycle. However, the depth of analysis comes with significant trade-offs. LCAs are time-intensive and resource-heavy, often requiring months to complete, and are typically conducted by external consultancies at a high cost. Businesses with the right expertise can perform them internally, but LCAs demand dedicated teams and extensive supplier engagement to gather primary data. In some cases, this requires reaching out to hundreds of suppliers to ensure results reflect the company’s actual footprint. As such, while LCAs are valuable for determining a thorough baseline assessment, they aren’t well suited to continuous tracking, particularly for businesses with constrained budgets or less complex supply chains.
At the other end of the spectrum are tools like PAIA, namely a streamlined LCA methodology used primarily within the technology industry that prioritises ease of use and speed over precision. These platforms typically rely on businesses or suppliers providing general input through online forms. The tool then uses industry averages, modelled data, and assumptions to estimate emissions. PAIA, for example, takes product attributes – such as the screen or battery size of a laptop – and combines them with the best available data to generate insights via an algorithm. This makes it particularly useful for companies in the electronics sector looking to assess how design choices impact on carbon and energy usage. While these solutions are cost-effective and quick, they come with substantial limitations. The estimates they generate often have wide margins of error, making them less suitable for businesses seeking detailed insights for strategic decision-making or compliance purposes. For instance, they may provide a broad carbon intensity figure but fail to deliver the actionable insights needed for effective decarbonisation strategies.
Given LCA’s limitations in ongoing tracking and PAIA’s focus on product design, neither solution is ideal for dynamic supply chain emissions management. Instead, businesses should transition to product carbon footprints (PCFs) and corporate carbon footprints (CCFs). CCFs are updated at least annually while PCFs are refreshed whenever product inputs, supplier changes, or newly received PCFs in the bill of materials (BOM) impact emissions by more than 5%. This shift enables businesses to maintain more accurate, real-time emissions tracking across their value chain.
It’s important to recognise that there’s no one-size-fits-all solution for carbon footprinting. According to Gartner, 55% of companies expect to use two or more tools to manage their Scope 3 emissions. The right approach depends on a company’s specific requirements, which may evolve over time. As organisations place increasing emphasis on Scope 3 emissions, adopting a long-term perspective can be beneficial. One effective strategy is to introduce a pilot programme for measuring Scope 3 emissions, allowing businesses to test methodologies, refine data collection processes, and identify the most suitable tools for their operations.
