ESG report: how to measure environmental impact

The LCA (Life Cycle Assessment) is a tool to objectively assess and quantify the environmental impact of a product, a service, an activity or a process throughout its entire life cycle, i.e. from raw material acquisition to end-of-life. As emphasised by the ISPRA (Istituto Superiore per la Protezione e la Ricerca Ambientale), the relevance of LCA lies mainly in its holistic approach that considers all phases of a given life cycle as interrelated and interdependent. LCA is regulated by the ISO standards of the 1404 series and consists of four main phases, each of which is regulated by a specific ISO standard.

In 2013, the Commission published the Recommendation 2013/179/EU to promote the use of uniform methods for measuring the life cycle of products and organisations. The recommendation suggests the use of these methods to Member States, companies, private organisations and the financial community and contains two annexes that define and regulate the proposed methods. The first method is the Product Environmental Footprint (PEF) and aims to assess the environmental impact of a product throughout its life cycle. The PEF is based on the LCA methodology and consists of a series of environmental indicators, such as impact on climate change, air quality, quantity of waste produced and impact on water, which allow companies to make an objective assessment of the environmental impact of their products, identify critical points in the life cycle where improvements are needed and transparently communicate the results.

The second method is the OEF (Organisation Environmental Footprint). Like PEF, OEF is an environmental impact assessment tool that is based on the LCA approach. Unlike PEF, OEF provides an assessment of the environmental impact not of a product, but of an organisation. This method was developed to provide companies with a tool to consistently and objectively assess the impact of their activities, a fundamental necessity for the drafting of the corporate sustainability report. OEF can be used by all organisations, public or private, regardless of their size or sector of activity. The main indicators used are climate change, water use, acidification, eutrophication, ozone formation and toxic substances.

Carbon Footprint (CF) and LCA are both tools used to calculate environmental impact, but they are not the same thing. The CF (in Italian, Carbon Footprint), is a specific measure of the impact of greenhouse gas emissions (in English, Greenhouse Gases - GHG) associated with a product, service, activity or process. CF focuses primarily on carbon dioxide (CO2) emissions, but also considers other emissions such as methane (CH4) and nitrous oxide (N2O). In contrast, LCA is a broader methodology that considers many other impact categories, such as land use, water use, ocean acidification, as well as greenhouse gas emissions.

The Greenhouse Gas Protocol is a standardised greenhouse gas emissions (GHG) accounting tool developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). This protocol was created to provide companies with a tool to measure and manage their greenhouse gas emissions effectively. The ISO reference is 14064-1 and defines a framework for planning and managing programmes for monitoring, quantifying, reporting and verifying greenhouse gas emissions, with the aim of providing reliable and transparent information to stakeholders.

Even in the case of the CF it is useful to distinguish and calculate the Carbon Footprint in terms of GHG emissions of products and organisations. Specifically, the Product Carbon Footprint (PCF) is a measure of the GHG emissions associated with the production, distribution and disposal of a specific product. The Organizational Carbon Footprint (OCF), on the other hand, is a measure of the greenhouse gas emissions associated with an organisation's overall operations, including products, services and activities. Examples of such operations are employee transport and energy used in company buildings. The use of these internationally valid methodologies helps businesses identify critical points in their production process and identify opportunities to reduce emissions, with the ultimate goal of reducing environmental impact and improving energy efficiency.

In this context, 3Bee sees itself as a leading Nature Tech company: we are experts in sustainability and support entities and businesses in realising regenerative projects through technology. That is why we have created a new practical guide that can help companies understand how to efficiently and effectively calculate, improve and communicate their environmental impact, including within their report or ESG sustainability report. Want to learn more?